As filed with the Securities and Exchange Commission on May 14, 1999
Registration No. 333-63563
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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INSILCO HOLDING CO.
(exact name of registrant as specified in its charter)
Delaware 06-1158291
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
(614) 792-0468
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
Kenneth H. Koch
Vice President and General Counsel
Insilco Holding Co.
425 Metro Place North
Fifth Floor
Dublin, Ohio 43017
(614) 792-0468
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
Richard D. Truesdell, Jr.
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
(212) 450-4000
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Approximate date of commencement of proposed sale to public: From time to
time following the effectiveness of this Registration Statement.
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box: [X]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this form, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission acting pursuant to said
Section 8(a), may determine.
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<PAGE>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED May 14, 1999
PROSPECTUS
Issued May __, 1999
INSILCO HOLDING CO.
COMMON STOCK
WARRANTS TO PURCHASE COMMON STOCK
PAY-IN-KIND PREFERRED STOCK
----------------------
This prospectus relates to (a) the resale of 69,000 warrants to purchase
shares of our common stock, par value $.001 per share, by certain holders
named elsewhere in this prospectus or in an accompanying supplement to this
prospectus, (b) the issuance of up to 22,423 shares of our common stock upon
exercise of such warrants to persons who have purchased warrants under the
immediately preceding clause (a), (c) resales of 63,692 shares of our common
stock held by certain stockholders named elsewhere in this prospectus or in an
accompanying supplement to this prospectus and up to 110,453 shares of our
common stock that have been received or may be received upon exercise of
warrants by persons other than those mentioned in the immediately preceding
clause (b) and (d) resales of 2,923,413 shares (represents 1,400,000 shares
currently outstanding and 1,523,413 shares that may be issued in lieu of cash
dividend payments prior to August 1, 2003) of Pay-in-kind 15% Senior
Exchangeable Preferred Stock due 2010 held by certain funds affiliated with
DLJ Merchant Banking Partners II, L.P. We refer to any of the warrants, shares
of preferred stock and such shares of common stock that are existing or may be
issued upon the exercise of the warrants, collectively as offered securities
elsewhere in this document.
We will not receive any proceeds from the sale of the offered securities
by the selling holders, other than payment of the exercise price of the
warrants. The warrants and the shares of preferred stock were issued and
shares issued upon the exercise of warrants have been or will be issued
pursuant to an exemption from the registration requirements of the Securities
Act of 1933, as amended. The offered securities are being registered pursuant
to registration rights granted in connection with the private placement of the
warrants and the preferred stock and the issuance of the existing shares in
connection with the mergers described elsewhere in this prospectus.
For a more detailed description of the warrants, see "Description of
Warrants" beginning on page 21.
For a more detailed description of our capital stock, see "Description of
Capital Stock" beginning on page 24.
We have agreed to bear certain expenses in connection with the
registration and sale of the offered securities being offered by the
warrantholders and selling stockholders.
Our common stock is traded in the over-the-counter market under the symbol
"INSL." On April 28, 1999, the last sale price for our common stock in the
over-the-counter market was $23.65 per share.
See "Risk Factors" beginning on page 8 hereof for certain information
that should be considered by you.
-----------------------
Neither the Securities and Exchange Commission or any state securities
commission has approved or disapproved of the securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
You should rely only on the information contained in this document or
that we have referred you to. We have not authorized anyone to provide you
with information that is different. We are not making an offer of these
securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any prospectus supplement is
accurate as of any date other than the date on the front of those documents.
<PAGE>
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TABLE OF CONTENTS
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Page
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Summary................................................................... 3
Risk Factors.............................................................. 8
Use of Proceeds........................................................... 14
Management................................................................ 14
Security Ownership of Certain Beneficial Owners and Management............ 15
Warrantholders And Selling Stockholders................................... 17
Description of Warrants................................................... 21
Description of Capital Stock.............................................. 24
Plan of Distribution...................................................... 27
Legal Matters............................................................. 27
Experts................................................................... 27
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with
the U.S. Securities and Exchange Commission (the "SEC"). Our SEC filings are
available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus. We incorporate by reference the
documents listed below (SEC File No. 000-24813).
Our Annual Report on Form 10-K for the year ended December 31, 1998,
a copy of which accompanies this prospectus.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
Insilco Holding Co.
425 Metro Place North
Dublin, Ohio 43017
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SUMMARY
This section summarizes the more detailed information in this prospectus
and you should read all of such information carefully and in its entirety.
Because various entities discussed in this prospectus have similar sounding
names, we refer to ourselves as "Holdings," "we," "us," "the company" or "our
company," and we refer to Insilco Corporation, our wholly-owned subsidiary as
"Insilco." For a discussion of important factors that could cause actual
results to differ materially from the forward-looking statements, see "Risk
Factors."
THE COMPANY
Overview
We produce automotive, telecommunications and electronics components, and
are a leading specialty publisher of student yearbooks.
We report our financial results in three segments:
o the Automotive Components Segment, which manufactures
o transmission components and assemblies and
o heat exchangers (such as radiators and air conditioning
condensers) and heat exchanger tubing;
o the Technologies Segment, which manufactures
o high performance data-grade connectors for the
telecommunications and networking markets,
o cable and wire assemblies primarily for the telecommunications
market, and
o precision metal stampings and power transformers primarily for
the electronics market.
o Specialty Publishing, which produces student yearbooks and other
specialty books.
Our portfolio of businesses serves several market segments, which we
believe tends to minimize the effects of cyclicality and diversify business
risk from any one market. Our broad base of more than 17,000 customers
includes automotive and non-automotive original equipment manufacturers
("OEMs"), telecommunications, networking and electronics companies and school
yearbook departments nationwide.
The Automotive Components Segment:
Our automotive components segment consists of:
o Thermal Components which produces aluminum-and copper-based
heat exchanger tubing for automotive OEMs and Tier 1 suppliers,
and also manufactures radiators, air conditioning condensers
and other heat exchangers for automotive and industrial
applications.
o Steel Parts which is the leading supplier of automatic
transmission clutch plates to Ford and produces other stamped
components for OEMs and Tier 1 suppliers.
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o Thermalex, a joint venture owned equally by us and Mitsubishi
Aluminum Co., Ltd., which is, we believe, the nation's leading
producer of precision extruded multi-port aluminum heat
exchanger tubing used in automotive air-conditioning
condensers.
The Technologies Segment
Our technologies segment generally focuses on niche products which are
designed for specific customer applications and seeks to supply all or a
substantial portion of its customers' requirements. The segment has four
operating units:
o Escod Industries, a supplier of cable and wire assemblies to the
telecommunications market, including Northern Telecom and Siemens
Telecom Network;
o Stewart Connector, a producer of high performance data-grade
connectors for the computer networking and
telecommunications markets;
o Stewart Stamping and EFI are producers of highly customized
precision stamped metal parts, primarily for the electronics
industry; and
o Signal Transformer, a producer of 50-60 Hz power transformers used in
a variety of products.
Specialty Publishing
Taylor Publishing Company is one of the nation's leading publishers of
student yearbooks. We believe that Taylor was the first major yearbook
publisher to make extensive use of digital pre-press technology (permitting
cutting, pasting, and rescaling of text and graphics on a computer) as opposed
to the more widely used pre-press process which involves manual cutting,
pasting and rescaling. We believe that we use digital pre-press technology
more extensively than our competitors, and that this technology offers
yearbook departments superior quality and greater flexibility in altering page
design. The student yearbook business is not very cyclical, has low customer
turnover and many of the sales are pre-paid.
Other
o Romac, which produces stainless steel tubing for marine,
architectural, industrial and automotive applications.
o McKenica, which manufactures high speed welded tube mills and other
machinery and equipment for the heat exchanger market.
Business Strategy
We seek sales growth through internal growth and acquisitions. In
addition, we seek to improve operating margins through cost reduction programs
and an ongoing process of efficiency improvements. Our strategy includes the
following:
Focus on Niche Markets
Develop New Products and Applications
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Increase Value-Added Content
Implement Cost Reduction Programs and Efficiency Improvements
Expand Strategic Acquisitions and Partnerships; Divestitures
For more complete information on our business strategies, you should read
the section called "Business--Business Strategies."
Recent Developments
The Mergers. On August 17, 1998, we formed a wholly owned subsidiary
which was then merged with and into Insilco (which we call the "Reorganization
Merger"). In the merger, each of Insilco existing stockholders had his or her
shares converted into the same number of our shares and the right to receive
$0.01 per share in cash, and we became Insilco's corporate parent. Promptly
following the Reorganization Merger, a second merger took place pursuant to
which Silkworm Acquisition Corporation, an affiliate of DLJ Merchant Banking
Partners II, L.P., merged with and into us (which we call the "Merger," and
together with the Reorganization Merger, the "Mergers") and each share of our
common stock was converted into the right to receive $43.47 in cash and retain
0.03378 of a share of our common stock. Thus, as a result of the Mergers, each
of Insilco's existing stockholders:
-- received $43.48 in cash (consisting of $.01 received in the
Reorganization Merger and $43.47 received in the Merger) and
-- retained 0.03378 of a share of our common stock.
In conjunction with the Mergers, DLJ Merchant Banking Partners II, L.P.
and certain related funds and entities (which we call the "DLJMB Funds")
purchased 1,400,000 shares of our 15% Senior Exchangeable Preferred Stock due
2012 (the "PIK Preferred Stock"), and warrants to purchase 65,603 shares of
our common stock at an exercise price of $0.01 per share.
As a result of those transactions, following the Mergers,
o Insilco stockholders received, in the aggregate, approximately 10.1%
(9.4% on a fully diluted basis) of the outstanding shares of our
common stock;
o the DLJMB Funds held approximately 69.0% (69.8% on a fully diluted
basis) of the outstanding shares of our common stock;
o 399 Venture Partners, Inc., an affiliate of Citibank, N.A. ("CVC"),
purchased shares of Silkworm which in the Merger were converted into
approximately 19.3% (17.8% on a fully diluted basis) of the
outstanding shares of our common stock; and
o Insilco's management purchased approximately 1.7% (1.5% on a fully
diluted basis) of the outstanding shares of our common stock.
Immediately before the Reorganization Merger, each outstanding option to
acquire shares of Insilco's common stock that had been granted to Insilco's
employees and directors, whether or not vested, was canceled and each holder
of an option received a cash payment (collectively, the "Option Cash
Payments") in an amount equal to:
the excess, if any, of $45.00 over the exercise price of the option
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multiplied by
the number of shares subject to the option, less applicable
withholding taxes. Certain option holders elected to use the Option
Cash Payments to purchase our stock or equity units.
The Merger Financing. The cash required to consummate the foregoing
transactions was approximately $204.4 million. This amount was financed with
o approximately $70.2 million from the issuance by Silkworm of units
(which were converted into our units in the Merger), each unit
consisting of $1,000 principal amount of our 14% Senior Discount
Notes due 2008 and one warrant to purchase 0.325 of a share of our
common stock at an exercise price of $0.01 per share,
o approximately $56.1 million from the issuance by Silkworm to the
DLJMB Funds, CVC and certain members of our management of 1,245,138
shares of Silkworm common stock (which was converted into our common
stock in the Merger),
o $35.0 million from the issuance to the DLJMB Funds of 1,400,000
shares of the PIK Preferred Stock by Holdings and the DLJMB Warrants
to purchase 65,603 shares of our common stock at an exercise price
of $0.01 per share, and
o approximately $43.1 million of new borrowings under our then existing
bank credit facility.
Offer to Purchase. Because the Mergers caused a "change in control" of
Insilco, we were required to make an offer to purchase all of our outstanding
$150.0 million 101/4% Senior Subordinated Notes due 2007 at 101% of their
aggregate principal amount, plus accrued interest. We issued 12% Senior
Subordinated Notes due 2007 as units together with warrants to purchase our
common stock and used the proceeds, together with certain borrowings under our
new bank credit facility, to repurchase all of the 101/4% notes.
New Credit Facility. On November 24, 1998, we entered into a new credit
facility with a group of lenders led by DLJ Capital Funding Inc. to replace
our existing credit facility. The new credit facility includes a $125 million
term loan facility and a $175 million revolving credit facility (subject to
adjustment as described below). The term loan facility has a maturity of seven
years. The revolving credit facility will terminate on July 8, 2003. See
"Description of Certain Indebtedness--New Credit Facility."
Insilco Unit Offering. On November 2, 1998, Insilco commenced an offering
of 120,000 units consisting of $120,000,000 in aggregate principal amount of
its 12% Senior Subordinated Notes due 2007 and warrants to purchase 62,400
shares of our common stock, to partly fund the repurchase of $150,000,000 in
aggregate principal amount of its outstanding 10 1/4% notes. This repurchase
is required under the terms of the indenture relating to the 10 1/4% notes
following the consummation of the Mergers. The offering of the 12% notes,
together with the repurchase of the 10 1/4% notes pursuant to an offer to
purchase, and the borrowings under the new credit facility are referred to as
the "Refinancing."
Acquisitions. We recently acquired Eyelets for Industry, Inc. (EFI) and
its wholly owned subsidiary EFI Metal Forming Inc. and are currently in
negotiations with respect to another potential acquisition. Neither the EFI
acquisition, nor the other potential acquisition, if consummated, is material
to our financial position.
Jostens Litigation. On January 14, 1997, Taylor sued one of its principal
competitors in the yearbook business, Jostens, Inc., in the U.S. District
Court for the Eastern District of Texas, alleging violations of the federal
antitrust laws as well as various claims arising under state law. On May 13,
1998, the jury in the case returned a verdict in favor of Taylor, and, on June
12, 1998, the judge rendered his judgment in the amount of $25.2 million plus
interest at an annual rate of 5.434%. On January 14, 1999, in response to a
motion by Jostens, the judge entered an order vacating the jury
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verdict and granting judgment in Jostens' favor. We will seek to overturn the
order and reinstate the jury verdict on appeal. We cannot assure you what the
actual amount is, if any, that Taylor will recover from Jostens.
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Our principal executive offices are located at 425 Metro Place North,
Fifth Floor, Dublin, Ohio 43017, and our telephone number is (614) 792-0468.
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RISK FACTORS
You should carefully consider the specific risk factors set forth below.
Limitations on Access to Cash Flow of Subsidiaries; Holding Company Structure
We are a holding company, and our ability to make dividend payments in
respect of our common stock is dependent upon the receipt of dividends or
other distributions from our direct and indirect subsidiaries. We do not have,
and may not in the future have, any assets other than all of the shares of
common stock of Insilco, our operating subsidiary, which are pledged to secure
the obligations of Insilco under the new credit facility. Insilco and its
subsidiaries are parties to the new credit facility and Insilco is party to
the indentures governing the 10 1/4% notes and the 12% notes, each of which
imposes substantial restrictions on Insilco's ability to pay dividends or make
other distributions to us. Any payment of dividends or other distributions
will be subject to the satisfaction of certain financial conditions set forth
in such indenture and is subject to certain prohibitions contained in the new
credit facility. The ability of Insilco and its subsidiaries to comply with
such conditions or prohibitions may be affected by events that are beyond our
control. If the maturity of the 10 1/4% notes, the 12% notes or the loans
under the new credit facility were to be accelerated, all such outstanding
debt would be required to be paid in full before Insilco or its subsidiaries
would be permitted to distribute any assets or cash to us. There can be no
assurance that our assets would be sufficient to repay all of such outstanding
debt and to meet our obligations under the indenture. In addition, under
Delaware law, a company is permitted to pay dividends or make other
distributions on its capital stock only out of its surplus or, in the event
that it has no surplus, out of its net profits for the year in which a
dividend or distribution is declared or for the immediately preceding fiscal
year. Surplus is defined as the excess of a company's total assets over the
sum of its total liabilities plus the par value of its outstanding capital
stock. In determining Insilco's ability to pay dividends or make other
distributions to us, Delaware law will permit the Board of Directors of
Insilco to revalue its assets and liabilities from time to time to their fair
market values in determining surplus. We cannot predict what the value of
Insilco's or its other subsidiaries' assets or the amount of their liabilities
will be in the future and, accordingly, there can be no assurance that we will
be able to receive dividends from Insilco in order to make any dividend
payments in respect of out common stock.
Substantial Leverage; Liquidity
Leverage
In connection with the Merger and Merger Financing, we incurred
significant indebtedness. As of March 31, 1999, we had: (i) total consolidated
indebtedness of approximately $410.2 million; and (ii) $76.5 million of
additional revolving borrowings available under the new credit facility,
subject to customary conditions. In addition, subject to the restrictions in
the new credit facility and the indenture relating to our 14% discount notes
and Insilco's 10 1/4% and 12% notes, we may incur significant additional
indebtedness, which may be secured, from time to time.
The level of our indebtedness could have important consequences,
including:
o limiting cash flow available for general corporate purposes,
including acquisitions, because a substantial portion of our cash
flow from operations must be dedicated to debt service;
o limiting our ability to obtain additional debt financing in the
future for working capital, capital expenditure or acquisitions;
o limiting our flexibility in reacting to competitive and other
changes in the industry and economic conditions generally; and
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o exposing us to risks inherent in interest rate fluctuations because
certain of our borrowings may be at variable rates of interest,
which could result in higher interest expense in the event of
increases in interest rates.
Conditions that may impact our ability to repay our Debt
Our ability to pay or to refinance our indebtedness will depend upon our
future operating performance, which will be affected by general economic,
financial, competitive, legislative, regulatory, business and other factors
beyond our control.
We anticipate that our operating cash flow, together with money we can
borrow under our new credit facility, will be sufficient to meet anticipated
future operating expenses, capital expenditures and to service debt as it
becomes due. However, if our future operating cash flows are less than
currently anticipated we may be forced, in order to meet our debt service
obligations, to reduce or delay acquisitions or capital expenditures, sell
assets or reduce operating expenses. If we were still unable to meet our debt
service obligations, we could attempt to restructure or refinance our
indebtedness or seek additional equity capital. There can be no assurance that
we will be able to accomplish that on satisfactory terms, if at all.
In addition, subject to the restrictions and limitations contained in our
debt agreements, we may incur significant additional indebtedness to finance
future acquisitions, which could adversely affect our operating cash flows and
our ability to service indebtedness.
Restrictive Covenants
The indenture governing our public debt (and Insilco's public debt)
contain various covenants that limit our ability to engage in certain
transactions. These covenants limit our and certain of our subsidiaries'
ability to:
o borrow and to place liens on assets
o pay dividends or make certain other restricted payments
o enter into certain transactions with affiliates; or
o merge or consolidate with any other person or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially
all of our assets or the assets of Insilco.
In addition, our new credit facility contains other and more restrictive
covenants and prohibits us from prepaying our other indebtedness. Our new
credit facility also requires us to maintain specified financial ratios and
satisfy certain other financial condition tests. Our ability to meet those
financial ratios and tests can be affected by events beyond our control, and
there can be no assurance that we will meet those tests. A breach of any of
these covenants could result in a default under our new credit facility and/or
our 14% notes or Insilco's 12% or 10 1/4% notes. Upon the occurrence of an
event of default under our new credit facility, the lenders could elect to
declare all amounts outstanding under our new credit facility to be
immediately due and payable and terminate all commitments to extend further
credit. If we were unable to repay those amounts, the lenders could proceed
against the collateral granted to them to secure that indebtedness. We have
pledged substantially all of our assets, other than assets of our foreign
subsidiaries, as security under our new credit facility.
Customer Concentration; Absence of Long-Term Contracts
A significant portion of our sales are made to a relatively small group
of major customers. In 1998, sales to Ford represented approximately 9% of our
net sales and sales to a group of our nine next largest customers represented
approximately 22% of net sales.
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Our reliance on these major customers exposes us to
o the risk of changes in the business condition of our major customers
and
o the risk that the loss of a major customer could adversely affect
Insilco's results of operations.
While we have supplied Ford for 40 years, Ford is not contractually bound
to purchase supplies from us in the future. Thus, our relationship with Ford
is subject to termination at any time. If we were to lose Ford as a customer,
our results of operations would be adversely affected.
Cyclical Markets
A substantial portion of our revenues derive from sales to markets that
have been historically, and are likely to continue to be, cyclical. For
example, our Automotive Components Segment, which accounted for approximately
40% of our net sales and 46% of operating income for the year ended December
31, 1998, primarily serves the automobile OEM market and the automobile parts
aftermarket through the manufacture of automotive heat exchangers and related
tubing, and automatic transmission and suspension components. (For the year
ended December 31, 1998, however, approximately 17% and 36% of the Automotive
Components Segment's net sales were attributable to the automotive aftermarket
and non-automotive OEMs, respectively.) The automobile industry has
experienced recessionary or slow growth conditions for substantial periods in
the past and may experience recessionary conditions in the future. Any
substantial weakening of the automobile industry would have an adverse effect
on our results of operations.
Seasonality; Production Disruption
In certain of our businesses in which there is high customer
concentration or high production seasonality, we would be exposed to
potentially significant revenue losses if we (or our customers) were to
experience substantial disruption in production. With the continued emphasis
on reductions in component inventories and "just-in-time" deliveries,
especially in the automotive industry, any disruption in our production or by
our major customers, through work stoppages or otherwise, could have an
immediate and adverse effect on our results of operations.
Additionally, a portion of our revenues and operating income are exposed
to the seasonality of the yearbook production cycle. A majority of the annual
revenues of Taylor are recognized in our second quarter. Any disruption during
the peak production period (April to June) through work stoppages, loss of
production facilities or otherwise, has caused and could in the future cause
lost revenues or delay revenue recognition in the year in which it occurred or
increase expenses and adversely affect future years' contract renewals.
Competition
The businesses in which we are engaged are highly competitive and in some
cases highly fragmented, with many small manufacturers. In some of our
businesses, especially the data grade connector business and the heat
exchanger business, we compete with entities having significantly more
resources. In certain other businesses we compete with entities that have a
greater share of the relevant market and lower costs. As competition
increases, profit margins on some of our significant business lines could
decrease, and in the more fragmented markets consolidation could occur,
resulting in the creation of larger and financially stronger competitors.
We believe that, to remain competitive and maintain or increase
profitability, we must pursue a strategy focusing on growth and product
innovation. However, our competitors can be expected to continue to seek their
own growth, to improve the design and performance of their products, to reduce
costs of existing competitive products and to introduce new products with
competitive price and performance characteristics. Although we believe that,
with respect to most of our businesses, we have certain technological,
manufacturing and other advantages over our competitors, maintaining these
advantages will require continued investment in research and development,
sales and marketing,
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productivity improvements and information systems. We cannot assure you that
we will have sufficient resources to continue to make such investments, that
such investments will be successful or that we will be able to maintain our
existing competitive advantages.
Technology and the Development of New Products
The markets for many of our products, particularly the data grade
connector products, are characterized by technological change, evolving
industry standards, product customization and frequent new product
introductions, which may render existing or proposed products noncompetitive
or obsolete.
Many of our products require significant planning, design, development
and testing at the technological, product and manufacturing process levels.
Moreover, many of our customers use our products and proprietary technologies
as components of other products which they manufacture or assemble, which may
become uncompetitive or obsolete.
Although we work closely with our customers to stay informed with respect
to product development, we cannot assure you that any of the products we are
currently developing or those to be developed in the future, will be completed
in any particular time frame or that our or our customers' products or
proprietary technologies will not become uncompetitive or obsolete.
Acquisition Growth Strategy; Management and Funding of Growth
We have historically pursued an acquisition strategy and recently
completed an acquisition of a precision stamping company that specializes in
"deep drawn" components for the electronics, automotive and consumer markets.
We are currently in negotiations with respect to another potential acquisition
as part of our ongoing strategy to promote growth. See "Summary--Recent
Developments." There are various risks associated with pursuing a growth
strategy of this nature.
o Any future growth will require us to manage our expanding domestic
and international operations, integrate new businesses and adapt our
operational and financial systems to respond to changes in our
business environment, while maintaining a competitive cost
structure.
o The acquisition strategy will continue to place demands on our
management to improve our operational, financial and management
information systems, to develop further the management skills of our
managers and supervisors, and to continue to retain, train, motivate
and effectively manage our employees.
Our failure to manage growth effectively could have a material adverse effect
on us. We also cannot assure you that suitable acquisition candidates will be
available or that acquisitions can be completed on reasonable terms.
Additionally, our ability to maintain and increase our revenue base and
to respond to shifts in customer demand and changes in industry trends will be
partially dependent on our ability to generate sufficient cash flow or obtain
sufficient capital for the purpose of, among other things, financing
acquisitions, satisfying customer contractual requirements and financing
infrastructure growth. We cannot assure you that we will be able to generate
sufficient cash flow or that financing will be available on acceptable terms
(or permitted to be incurred under the terms of our new credit facility, the
indenture and any future indebtedness) to fund our future growth.
Environmental Matters
Our operations are subject to federal, state, local and foreign laws and
regulations relating to the storage, handling, generation, treatment,
emission, release, discharge and disposal of certain substances and wastes. As
a result, we are involved from time to time in administrative or legal
proceedings relating to environmental matters and have incurred in the past
and will continue to incur capital costs and other expenditures relating to
environmental matters.
11
<PAGE>
Certain properties now or previously owned by us are undergoing
remediation. Liability under environmental laws may be imposed on current and
prior owners of property or businesses without regard to fault or to knowledge
about the condition or action causing the liability. As an owner and operator
of those properties, we may be required to incur costs relating to the
remediation, and environmental conditions could lead to claims for personal
injury, property damage or damages to natural resources.
We have also in the past and may in the future be named a potentially
responsible party ("PRP") at off-site third-party disposal sites to which our
businesses have sent waste.
We believe, based on current information, that any costs we may incur
relating to environmental matters will not have a material adverse effect on
our business, financial condition or result of operations. We cannot assure
you, however, that we will not incur significant fines, penalties or other
liabilities associated with noncompliance or clean-up liabilities or that
future events, such as changes in laws or the interpretation thereof, the
development of new facts or the failure of other PRPs to pay their share, will
not cause us to incur additional costs that could have a material adverse
effect on our business, financial condition or results of operations. See
"Business--Environmental Regulation and Proceedings."
Dependence on Key Personnel
Our success depends to a significant extent upon the services of our
senior management and other management in our various businesses. We could be
adversely affected if any of these persons were unwilling or unable to
continue in our employ.
Risks Associated with Foreign Operations; Exchange Rate Fluctuations
Our products are manufactured and assembled at facilities in the United
States, the Dominican Republic, Germany, Ireland, the United Kingdom and
Mexico and sold in many foreign countries. In 1998, approximately 9% of our
net sales and costs of goods sold occurred outside the United States and
Canada. International manufacturing and sales are subject to inherent risks,
including changes in local economic or political conditions, the impositions
of currency exchange restrictions, unexpected changes in regulatory
environments, potentially adverse tax consequences and exchange rate risk. We
cannot assure you that these factors will not have a material adverse impact
on our production capabilities or otherwise adversely affect our business and
operating results.
Control by Principal Shareholders
Approximately 69.0% of the outstanding shares of our common stock is held
by the DLJMB Funds. As a result of their stock ownership, the DLJMB Funds
control us and (subject to any agreement they may have with CVC as described
in "Description of Capital Stock--Other Stockholder Arrangements") have the
power to elect all of our directors, appoint new management and approve any
action requiring the approval of the holders of common stock, including
adopting amendments to the certificate of incorporation and approving
acquisitions or sales of all or substantially all of our assets.
The general partners of each of the DLJMB Funds are affiliates or
employees of Donaldson, Lufkin & Jenrette, Inc. ("DLJ, Inc."). DLJ Capital
Funding, Inc., which is an agent and lender under our new credit facility, and
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJSC") are also
affiliates of DLJ, Inc.
Circumstances may occur in which the interests of such principal
shareholders could be in conflict with your interests. In addition, such
shareholders may have an interest in pursuing transactions that, in their
judgment, enhance the value of their equity investment in Insilco, even though
such transactions may involve risks to the holders of the notes.
12
<PAGE>
Limited Liquidity of Common Stock
Our common stock trades only on the over-the counter market. Although
trade prices are published by the National Association of Securities Dealers,
Inc. periodically in the "pink sheets," quotes for such shares will likely not
be readily available. As a result, purchasers may experience difficulty
selling any of our common stock received upon the exercise of the warrants.
Holdings Capital Structure; Absence of Dividends
We have not paid dividends to date on our common stock and do not
anticipate paying any cash dividends on our common stock in the forseeable
future. We are a holding company that is dependent on distributions from our
subsidiaries to meet our cash requirements. The terms of the indentures
governing our public debt and the new credit facility restrict the ability of
our subsidiaries to make distributions to us and, consequently, also restrict
our ability to pay dividends on our common stock, and the terms of our PIK
Preferred Stock also restrict our ability to pay such dividends. Holders of
the warrants will not have the right to receive any dividends so long as their
warrants are unexercised.
Year 2000
Many existing computer programs utilized globally use only two digits to
identify a year in the date field. These programs, if not corrected, could
fail or create erroneous results after the century date changes on January 1,
2000 or when otherwise dealing with dates later than December 31, 1999. We
have implemented a comprehensive "Year 2000" compliance program and believe
that our internal systems are Year 2000 compliant or will be upgraded or
replaced in connection with previously planned changes to information systems
prior to the need to comply with Year 2000 requirements.
The costs incurred to implement our Year 2000 compliance program have
been immaterial to date and we presently expect to incur less than $1.0
million of costs in total.
However, we are uncertain as to the extent our customers and vendors may
be affected by Year 2000 issues that require commitment of significant
resources and may cause disruptions in the customers' and vendors' businesses
Moreover, Year 2000 issues present a number of risks that are beyond our
reasonable control, such as:
o the failure of utility companies to deliver electricity,
o the failure of telecommunications companies to provide voice and data
services,
o the failure of financial institutions to process transactions and
transfer funds,
o the failure of vendors to deliver materials or perform services
required by the us and
o the collateral effects on us of the effects of Year 2000 issues on
the economy in general or on the our customers in particular.
Although we believe that our Year 2000 compliance program is designed to
appropriately identify and address those Year 2000 issues that are subject to
our reasonable control, there can be no assurance that our efforts in this
regard will be fully effective or that Year 2000 issues will not have a
material adverse effect on our business, financial condition or results of
operations.
13
<PAGE>
USE OF PROCEEDS
All of the offered securities offered hereby are being sold by the
warrantholders and the selling stockholders. We will not receive any of the
proceeds from the sale of the offered securities, other than upon the exercise
of the warrants. We will pay certain expenses relating to the registration and
sale of the offered securities, estimated to be approximately $56,500.
MANAGEMENT
The following table sets forth the name, age and position of each person
who is a director or executive officer of Insilco.
Name Age Position
- ---- --- --------
Robert L. Smialek........ 55 Chairman of the Board,
President and Chief Executive Officer
David A. Kauer........... 43 Vice President and Chief Financial Officer
Kenneth H. Koch.......... 43 Vice President, General Counsel and Secretary
Leslie G. Jacobs......... 48 Vice President, Human Resources and Assistant
Secretary
Michael R. Elia.......... 40 Vice President and Controller
Thompson Dean............ 40 Director
William F. Dawson, Jr.... 34 Director
David Y. Howe............ 34 Director
Randall E. Curran........ 43 Director
Keith Palumbo............ 34 Director
John F. Fort III......... 57 Director
Robert L. Smialek has served as Chairman of the Board, President and Chief
Executive Officer of Insilco since May 1, 1993. From October 1992 to May 1993,
Mr. Smialek served as the President and Chief Operating Officer of the
Temperature and Appliance Controls Group of Siebe plc, a global controls and
engineering firm. From September 1990 to October 1992, Mr. Smialek served as
President and Chief Operating Officer of Ranco, Inc., a subsidiary of Siebe,
Inc. Mr. Smialek is a director of General Cable Corporation and Gleason
Corporation.
David A. Kauer has been Vice President and Chief Financial Officer since
May 1998, Vice President and Treasurer from April 1997 to May 1998 and
Treasurer from September 1993 to April 1997. Previously, Mr. Kauer was the
Controller and Treasurer of Johnson Yokogawa Corporation (a joint venture of
Yokogawa Electric Corporation and Johnson Controls, Inc.) from October 1989 to
September 1993.
Kenneth H. Koch has been Vice President, General Counsel and Secretary
since October 1993. Prior thereto, Mr. Koch was a partner with the law firm of
Porter, Wright, Morris & Arthur.
Leslie G. Jacobs has been Vice President, Human Resources since August
1993 and was Director of Human Resources from January 1990 to August 1993.
Prior thereto, Mr. Jacobs was Director, Compensation and Employee Programs, of
Rockwell International.
Michael R. Elia has been Vice President and Controller since August 1998.
Prior thereto, Mr. Elia was Chief Financial Officer of Jordan
Telecommunication Products and from 1994 to 1997, he was Director of Strategic
Planning for Fieldcrest Cannon, Inc. From 1983 to 1994, Mr. Elia held senior
financial positions with Insilco's Technologies Segment.
14
<PAGE>
Thompson Dean has been the Managing Partner of DLJMB Inc. since November
1996. Prior thereto, Mr. Dean was a Managing Director of DLJMB Inc. (and its
predecessor). Mr. Dean serves as a director of Commvault Inc., Von Hoffman
Corporation, Manufacturers' Services Limited, Phase Metrics, Inc., and Arcade
Holding Corporation.
William F. Dawson, Jr. has been a Principal of DLJMB Inc. since August
1997. From December 1995 to August 1997, he was a Senior Vice President in
DLJ's High Yield Capital Markets Group. Prior thereto, Mr. Dawson was a Vice
President in the Leveraged Finance Group within DLJ's Investment Banking
Group. Mr. Dawson serves as a director of Von Hoffman Corporation and
Thermadyne Holdings Corporation.
David Y. Howe has been a Vice President of Citicorp Venture Capital, Ltd.
since 1993. Mr. Howe serves as a director of Aetna Industries, Inc., American
Italian Pasta Company, IPC Information Systems, Inc, and Pen-Tab Industries,
Inc.
Randall E. Curran has been a director, Chairman of the Board, President
and Chief Executive Officer of Thermadyne LLC since May 1998. Mr. Curran has
also served as a Director of Thermadyne Holdings since February 1994 and was
elected Chairman of the Board and Chief Executive Officer of Thermadyne
Holdings in February 1995, having previously served as President of Thermadyne
Holdings since August 1994 and as Executive Vice President and Chief Operating
Officer of Thermadyne Holdings since February 1994. He also serves as
President of Thermadyne Industries, Inc., a position he has held since 1992.
From 1986 to 1992, Mr. Curran was Chief Financial Officer of Thermadyne
Holdings and/or its predecessors. Prior to 1986, Mr. Curran held various
executive positions with Cooper Industries, Inc.
Keith Palumbo has been a Vice President of DLJMB Inc. since December 1997.
Prior thereto, Mr. Palumbo was an Associate in DLJ's investment banking group.
John F. Fort III served as Chairman of the Board of the Directors of Tyco
International, Inc. from 1982 to December 1992, and as Chief Executive Officer
from 1982 to June 1992. Mr. Fort serves as a director of Tyco
International, Inc., Dover Corporation and Roper Industries.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of our common stock as of April 28, 1999 by (i) any
person or group who beneficially owns more than five percent of our common
stock, (ii) each of our directors and executive officers and (iii) all
directors and officers as a group.
<TABLE>
Shares Percentage of
Beneficially Outstanding
Name and Address of Beneficial Owner: Owned Common Stock
- ------------------------------------- ------------ -------------
<S> <C> <C>
DLJ Merchant Banking Partners II, L.P. and related investors(1)(2).. 1,043,584 70.8%
399 Venture Partners, Inc.(3)....................................... 266,666 19.3
Thompson Dean(4).................................................... -- --
William F. Dawson, Jr.(4)........................................... -- --
Keith Palumbo(4).................................................... -- --
David Y. Howe(5).................................................... -- --
Randall E. Curran................................................... -- --
John F. Fort III.................................................... -- --
Robert L. Smialek................................................... 21,354 1.5%
Kenneth H. Koch..................................................... 300 *
David A. Kauer...................................................... 27 *
Leslie G. Jacobs.................................................... 13 *
Michael R. Elia..................................................... -- --
15
<PAGE>
All directors and officers as a group (9 persons)(5)(6)............. 21,694 1.5%
- -------------------
</TABLE>
* less than 1%.
(1) Includes 65,603 shares of our common stock issued following exercise on
March 12, 1999 of the DLJMB Warrants issued in connection with the PIK
Preferred Stock. Also includes 22,425 shares of our common stock issued
following exercise on March 12, 1999 of warrants, which were issued as
part of our units, each unit consisting of $1,000 principal amount of our
14% Senior Discount Notes due 2008 and one warrant to purchase 0.325 of a
share of our common stock at an exercise price of $0.01 per share,
purchased by DLJ Investment Partners, L.P., DLJ ESC II, L.P. and DLJ
Investment Funding, Inc. See "Summary - Recent Developments - The Merger"
and "- The Merger Financing."
(2) Consists of shares held directly by the following investors related to
DLJMB: DLJ Offshore Partners II, C.V. ("Offshore"), a Netherlands
Antilles limited partnership, DLJ Diversified Partners, L.P.
("Diversified"), a Delaware limited partnership, DLJMB Funding II, Inc.
("Funding"), a Delaware corporation, DLJ Merchant Banking Partners II-A,
L.P. ("DLJMBPIIA"), a Delaware limited partnership, DLJ Diversified
Partners-A L.P. ("Diversified A"), a Delaware limited partnership, DLJ
Millennium Partners, L.P. ("Millennium"), a Delaware limited partnership,
DLJ Millennium Partners-A, L.P. ("Millennium A"), a Delaware limited
partnership, DLJ EAB Partners, L.P. ("EAB"), UK Investment Plan 1997
Partners ("UK Partners"), a Delaware partnership, DLJ First ESC L.P., a
Delaware limited partnership ("DLJ First ESC"), and DLJ ESC II, L.P., a
Delaware limited partnership ("DLJ ESC II"). See "Certain Relationships
and Related Transactions" and "Plan of Distribution." The address of each
of DLJMB, Diversified, Funding, DLJMBPIIA, Diversified A, Millennium,
Millennium A, DLJ First ESC, DLJ ESC II and EAB is 277 Park Avenue, New
York, New York 10172. The address of Offshore is John B. Gorsiraweg 14,
Willemstad, Curacao, Netherlands Antilles. The address of UK Partners is
2121 Avenue of the Stars, Fox Plaza, Suite 3000, Los Angeles, California
90067.
(3) The address of 399 Venture Partners, Inc. is 399 Park Avenue, New York,
New York, 10022-4614.
(4) Messrs. Dean, Dawson and Palumbo are officers of DLJMB Inc., an affiliate
of DLJMB and DLJSC. The business address of Messrs. Dean, Dawson and
Palumbo is DLJMB Inc., 277 Park Avenue, New York, New York 10172. Share
data shown for such individuals excludes shares shown as held by the
DLJMB Funds, as to which such individuals disclaim beneficial ownership.
(5) Mr. Howe is an officer of Citicorp Venture Capital, Ltd., an affiliate of
399 Venture Partners, Inc. The business address of Mr. Howe is 399 Park
Avenue, New York, NY 10022-4614. Share data shown for Mr. Howe excludes
shares shown as held by 399 Venture Partners, Inc., as to which Mr. Howe
disclaims beneficial ownership.
16
<PAGE>
WARRANTHOLDERS AND SELLING STOCKHOLDERS
The following table sets forth certain information, as of the date
hereof, with respect to the number of warrants and shares of common stock and
PIK Preferred Stock owned by each of the warrantholders and the selling
stockholders, and as adjusted to give effect to the sale of all of the offered
securities. The offered securities are being registered to permit public
secondary trading of the offered securities, and the warrantholders and the
selling stockholders may offer the offered securities for resale from time to
time. See "Plan of Distribution."
We have filed with the SEC a registration statement, of which this
prospectus forms a part, with respect to the resale of the offered securities
from time to time, pursuant to Rule 415 under the Securities Act, in the
over-the-counter market, in privately-negotiated transactions, in underwritten
offerings or by a combination of such methods of sale, and have agreed to use
our best efforts to keep such registration statement effective (i) in the case
of the existing 63,692 shares of common stock, until August 17, 1999 (except
as such date may be extended under certain circumstances as set forth in the
Registration Rights Agreement) and (ii) in the case of the warrants and shares
of common stock that may be received upon exercise of warrants, until the
later of (A) the second anniversary of the effective date of the Registration
Statement and (B) the earlier of (i) August 15, 2008, and (ii) the first date
on which all warrants have been exercised by the holders thereof.
The offered securities offered by this prospectus may be offered from
time to time by the persons or entities named below:
<TABLE>
Type and Number of
Warrants Ownership
Owned Prior to Offering Number After Offering (1)(2)
Number of ------------------------- of Shares ---------------------
Shares of of PIK Number
Common Number of Preferred of
Stock Shares Stock Shares
Owned Type and Issuable Owned of
Prior to Number of Upon Prior to Common
Name and Address of Holders Offering Warrants Exercise Offering Stock Percent
- -------------------------------------- ---------- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
DLJ Merchant Banking Partners II, L.P.
277 Park Avenue
New York, NY 10172(3)................ 643,254 -- -- 881,895 643,254 43.02%
DLJ Merchant Banking Partners II-A, L.P.
277 Park Avenue
New York, NY 10172(3)................ 25,618 -- -- 35,121 25,618 1.71%
DLJ Offshore Partners II, C.V.
John B. Gorsiraweg 14
Willemstad, Curacao
Netherlands Antilles (3)............. 31,632 -- -- 43,367 31,632 2.12%
DLJ Diversified Partners, L.P.
277 Park Avenue
New York, NY 10172(3)................ 37,607 -- -- 51,560 37,607 2.52%
DLJ Diversified Partners-A, L.P.
277 Park Avenue
New York, NY 10172(3)................ 13,966 -- -- 19,147 13,966 *
</TABLE>
17
<PAGE>
<TABLE>
Type and Number of
Warrants Ownership
Owned Prior to Offering Number After Offering (1)(2)
Number of ------------------------- of Shares ---------------------
Shares of of PIK Number
Common Number of Preferred of
Stock Shares Stock Shares
Owned Type and Issuable Owned of
Prior to Number of Upon Prior to Common
Name and Address of Holders Offering Warrants Exercise Offering Stock Percent
- -------------------------------------- ---------- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
DLJMB Funding II, Inc.
277 Park Avenue
New York, NY 10172(3)................ 114,206 -- -- 156,577 114,206 7.64%
DLJ Millennium Partners, L.P.
277 Park Avenue
New York, NY 10172(3)................ 10,401 -- -- 14,259 10,401 *
DLJ Millennium Partners-A, L.P.
277 Park Avenue
New York, NY 10172(3)................ 2,028 -- -- 2,781 2,028 *
DLJ EAB Partners, L.P.
277 Park Avenue
New York, NY 10172(3)................ 2,889 -- -- 3,960 2,889 *
UK Investment Plan
1997 Partners
2121 Avenue of the Stars
Fox Plaza
Suite 3000
Los Angeles, CA 90067(3)............. 17,019 -- -- 23,333 17,019 1.13%
DLJ First ESC L.P.
277 Park Avenue
New York, NY 10172(3)................ 1,238 -- -- 1,697 1,238 *
DLJ Investment Partners, L.P.
277 Park Avenue
New York, NY 10172(3)................ 18,121 -- -- -- 18,121 1.21%
DLJ ESC II, L.P.
277 Park Avenue
New York, NY 10172(3)................ 123,023 -- -- 166,303 123,023 8.23%
DLJ Investment Funding, Inc.
277 Park Avenue
New York, NY 10172(3)................ 2,582 -- -- -- 2,582 *
</TABLE>
18
<PAGE>
<TABLE>
Type and Number of
Warrants Ownership
Owned Prior to Offering Number After Offering (1)(2)
Number of ------------------------- of Shares ---------------------
Shares of of PIK Number
Common Number of Preferred of
Stock Shares Stock Shares
Owned Type and Issuable Owned of
Prior to Number of Upon Prior to Common
Name and Address of Holders Offering Warrants Exercise Offering Stock Percent
- -------------------------------------- ---------- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Water Street Corporate
Recovery Fund I, L.P.
85 Broad Street
New York, NY 10004(4)................ 63,692 -- -- -- -- 4.26%
Equitable Life Assurance of the U.S.
Life Non Par
c/o Alliance Capital
Management, L.P.
1345 Avenue of the Americas 6,400
New York, NY 10105(3)................ -- Warrants 2,080 -- -- --
Equitable Life Assurance of the U.S.
ELA High Income
c/o Alliance Capital
Management, L.P.
1345 Avenue of the Americas 8,600
New York, NY 10105(3)................ -- Warrants 2,795 -- -- --
Ares Leveraged Investment Fund,
L.P.
c/o Ares Capital Management
1999 Avenue of the Stars
Suite 1900 20,000
Los Angeles, CA 90067................ -- Warrants 6,500 -- -- --
Caravelle Investment Fund, L.L.C.
c/o Caravelle Advisors
425 Lexington Avenue
22nd Floor
New York, NY 10017................... 13,500
-- Warrants 4,387 -- -- --
Muico & Co.
c/o Putman Management
One Poste Office Square
8th Floor 18,610
Boston, MA 02109..................... -- Warrants 6,048 -- -- --
Bost & Co.
c/o Putman Management
One Poste Office Square
8th Floor 1,540
Boston, MA 02109..................... -- Warrants 500 -- -- --
</TABLE>
19
<PAGE>
<TABLE>
Type and Number of
Warrants Ownership
Owned Prior to Offering Number After Offering (1)(2)
Number of ------------------------- of Shares ---------------------
Shares of of PIK Number
Common Number of Preferred of
Stock Shares Stock Shares
Owned Type and Issuable Owned of
Prior to Number of Upon Prior to Common
Name and Address of Holders Offering Warrants Exercise Offering Stock Percent
- -------------------------------------- ---------- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Blazerhold & Co.
c/o Putman Management
One Poste Office Square
8th Floor 240
Boston, MA 02109..................... -- Warrants 78 -- -- --
Booth & Co. 110 35 -- -- --
c/o Putman Management Warrants
One Poste Office Square
8th Floor
Boston, MA 02109..................... --
- -------------------
</TABLE>
* Less than 1%
(1) Based upon 1,472,487 shares of Common Stock outstanding on March 31, 1999
and 22,423 shares of Common Stock issuable upon exercise of the Warrants.
(2) Assumes the sale of all Existing Shares, shares of PIK Preferred Stockand
Warrants or shares of Common Stock received upon the exercise thereof.
(3) Excludes securities held by other investors related to DLJMB (which may
be deemed to be beneficially owned by the named entity).
(4) Represents shares of Common Stock beneficially owned by Water Street
Corporate Recovery Fund I, L.P. ("Water Street"). Goldman, Sachs & Co.
("Goldman Sachs") is the general partner of Water Street and thus may be
deemed to be the beneficial owner of shares beneficially owned by Water
Street. Goldman Sachs is, directly or indirectly, wholly-owned by The
Goldman Sachs Group, Inc. (successor to The Goldman Sachs Group, L.P. by
merger of The Goldman Sachs Group, L.P. with and into The Goldman Sachs
Group, Inc.) ("GS Group"). The address of Goldman Sachs and GS Group is
85 Broad Street, New York, New York 10004. Each of Goldman Sachs and GS
Group disclaims beneficial ownership of the shares owned by Water Street
to the extent interests in Water Street are owned by persons other than
GS Group and its affiliates. Includes 11 shares of Common Stock owned by
GS Group as of the date of this Prospectus and 720 shares of Common Stock
held by current or former partners or employees of Goldman Sachs as of
the date of this Prospectus.
20
<PAGE>
DESCRIPTION OF WARRANTS
Warrants
The warrants were issued pursuant to a Warrant Agreement between Silkworm
and National City Bank, as Warrant Agent. Upon consummation of the Mergers,
Holdings succeeded to the obligations of Silkworm with respect to the warrants
and the warrants, by their terms, became exercisable for an equal number of
shares of Common Stock. The following summary of the material provisions of
the Warrant Agreement does not purport to be complete and is qualified in its
entirety by reference to the Warrant Agreement, including the definitions
therein of certain terms used below, a copy of which is filed as an exhibit to
the Registration Statement of which this prospectus forms a part.
Each warrant, when exercised, will entitle the holder thereof to receive
0.325 of a fully paid and non-assessable share of common stock (the "Warrant
Shares"), at an exercise price of $0.01 per share. The exercise price and the
number of Warrant Shares are both subject to adjustment in certain cases
referred to below. The warrants are exercisable at any time and, unless
exercised, will automatically expire on August 15, 2008 (the "Expiration
Date").
The warrants may be exercised by surrendering to the Company the warrant
certificate, evidencing the warrants to be exercised, with the accompanying
form of election to purchase properly completed and executed, together with
payment of the exercise price. Payment of the exercise price may be made at
the holder's election (i) in cash in United States dollars by wire transfer or
by certified or official bank check to the order of the Company or (ii)
without a cash payment being required, for such number of Warrant Shares equal
to the product of (A) the number of Warrant Shares for which such warrant is
exercisable as of the date of exercise (if the exercise price were being paid
in cash) and (B) the Cashless Exercise Ratio. The Cashless Exercise Ratio
shall equal a fraction the numerator of which is the Market Value (as defined
in the Warrant Agreement) per share of Common Stock on the date of exercise
minus the exercise price per share as of the date of exercise and the
denominator of which is the Market Value per share on the date of exercise.
Upon surrender of the warrant certificate and payment of the exercise price,
the Company will deliver or cause to be delivered, to or upon the written
order of such holder, stock certificates representing the number of whole
Warrant Shares to which the holder is entitled. If less than all of the
warrants evidenced by a warrant certificate are to be exercised, a new warrant
certificate will be issued for the remaining number of warrants. Holders of
warrants will be able to exercise their warrants for cash so long as the
Registration Statement is then in effect, or the exercise of such warrants is
exempt from the registration requirements of the Securities Act, and such
securities are qualified for sale or exempt from qualification under the
applicable securities laws of the states in which the various holders of
warrants, or other persons to whom it is proposed that Warrant Shares be
issued on exercise of the warrants, reside.
No fractional Warrant Shares will be issued upon exercise of the
warrants. The Company will pay to the holder of a warrant at the time of
exercise an amount in cash equal to the current market value of any such
fractional Warrant Shares less a corresponding fraction of the exercise price.
The holder of the warrants will have no right to vote on matters
submitted to the stockholders of the Company and will have no right to receive
dividends. The holders of the warrants will not be entitled to share in the
assets of the Company in the event of liquidation, dissolution or the winding
up of the Company. In the event a bankruptcy or reorganization is commenced by
or against the Company, a bankruptcy court could determine that unexercised
warrants are executory contracts, and therefore subject to rejection by the
Company with approval of the bankruptcy court, and the holders of the warrants
may, even if sufficient funds are available, receive nothing or a lesser
amount as a result of any such bankruptcy case than they would be entitled to
if they had exercised their warrants prior to the commencement of any such
case.
In the event of a taxable distribution to holders of Common Stock that
results in an adjustment to the number of Warrant Shares or other
consideration for which a warrant may be exercised, the holders of the
warrants may, in certain circumstances, be deemed to have received a
distribution subject to United States federal income tax as a dividend.
21
<PAGE>
Adjustments
The number of Warrant Shares purchasable upon exercise of warrants and
the exercise price will be subject to adjustment, subject to certain
exceptions, in certain events including:
o the payment by the Company in Common Stock of dividends and other
distributions on the Common Stock;
o subdivisions, combinations and reclassification of the Common
Stock;
o the issuance to all holders of Common Stock of certain rights,
options or warrants entitling them to subscribe for Common Stock or
securities convertible into, or exchangeable or exercisable for,
Common Stock at a price which is less than the Fair Value per share
(as defined) of Common Stock;
o certain distributions to all holders of Common Stock of any of the
Company's assets, debt securities, other securities or any rights or
warrants to purchase any such securities (excluding those rights and
warrants referred to in clause (iii) above);
o the issuance of shares of Common Stock for consideration per share
less than the then Fair Value per share of Common Stock (excluding
securities issued in transactions referred to in clauses (i) through
(iv) above and certain other issuances);
o the issuance of securities convertible into or exchangeable for
Common Stock for a conversion or exchange price plus consideration
received upon issuance less than the then Fair Value per share of
Common Stock (excluding securities issued in transactions referred
to in clauses (i) through (iv) above); and
o certain other events that could have the effect of depriving holders
of the warrants of the benefit of all or a portion of the purchase
rights evidenced by the warrants. Adjustments to the exercise price
per share will be calculated to the nearest cent. No adjustment need
be made for any of the foregoing transactions if warrant holders are
to participate in the transaction on a basis and with notice that
the Board of Directors determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock
participate in the transaction.
"Fair Value" per security at any date of determination shall be (1) in
connection with a sale to a party that is not an Affiliate (as defined) of the
Company in an arm's-length transaction (a "Non-Affiliate Sale"), the price per
security at which such security is sold and (2) in connection with any sale to
an Affiliate of the Company, (a) the last price per security at which such
security was sold in a Non-Affiliate Sale within the three-month period
preceding such date of determination or (b) if clause (a) is not applicable,
the fair market value of such security determined in good faith by (x) a
majority of the Board of Directors of the Company, including a majority of the
Disinterested Directors, and approved in a board resolution delivered to the
Warrant Agent or (y) a nationally recognized investment banking, appraisal or
valuation firm, which is not an Affiliate of the Company, in each case, taking
into account, among all other factors deemed relevant by the Board of
Directors of the Company or such investment banking, appraisal or valuation
firm, the trading price and volume of such security on any national securities
exchange or automated quotation system on which such security is traded.
Notwithstanding the foregoing, any sale to DLJSC (or any successor thereto)
pursuant to an underwritten public offering registered under the Securities
Act shall be deemed to be and treated as a Non- Affiliate Sale.
"Disinterested Director" means, in connection with any issuance of
securities that gives rise to a determination of the Fair Value thereof, each
member of the Board of Directors of the Company who is not an officer,
employee, director or other Affiliate of the party to whom the Company is
proposing to issue the securities giving rise to such determination.
22
<PAGE>
No adjustment in the exercise price will be required unless such
adjustment would require an increase or decrease of at least one percent
(1.0%) in the exercise price, provided however, that any adjustment that is
not made will be carried forward and taken into account in any subsequent
adjustment.
In the case of certain consolidations or mergers of the Company, or the
sale of all or substantially all of the assets of the Company to another
corporation, (i) each warrant will thereafter be exercisable for the right to
receive the kind and amount of shares of stock or other securities or property
to which such holder would have been entitled as a result of such
consolidation, merger or sale had the warrants been exercised immediately
prior thereto and (ii) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale
shall have been made will assume the obligations of the Company under the
Warrant Agreement.
Reservation of Shares
The Company will at all times reserve and keep available such number of
shares of Common Stock as will be issuable upon the exercise of all
outstanding warrants. Such shares of Common Stock, when paid for and issued,
will be duly and validly issued, fully paid and non-assessable, free of
preemptive rights and free from all taxes, liens, charges and security
interests with respect to the issuance thereof.
Amendment
From time to time, the Company and the Warrant Agent, without the consent
of the holders of the warrants, may amend or supplement the Warrant Agreement
for certain purposes, including curing defects or inconsistencies or making
any change that does not adversely affect the legal rights of any holder. Any
amendment or supplement to the Warrant Agreement that adversely affects the
legal rights of the holders of the warrants will require the written consent
of the holders of a majority of the then outstanding warrants (excluding
warrants held by the Company or any of its Affiliates). The consent of each
holder of the warrants affected will be required for any amendment pursuant to
which the exercise price would be increased or the number of Warrant Shares
purchasable upon exercise of warrants would be decreased (other than pursuant
to adjustments provided in the Warrant Agreement).
Delivery and Form
The warrants will be in the form of registered, certificated warrants.
23
<PAGE>
DESCRIPTION OF CAPITAL STOCK
General
The following is a summary of certain of the rights and privileges
pertaining to the shares of our capital stock, including shares of our common
stock issuable upon exercise of the warrants. Our authorized capital stock
consists of 15,000,000 shares of common stock, par value $0.001 per share, of
which 1,385,169 shares are outstanding (excluding 172,853 shares reserved for
issuance for outstanding warrants, including the warrants offered by this
prospectus) and 3,000,000 shares of preferred stock, par value $0.001 per
share, of which 1,400,000 shares are outstanding. See "--PIK Preferred Stock."
Common Stock
Voting Rights. The holders of shares are entitled to one vote per share
on all matters submitted for action by the stockholders. There is no provision
for cumulative voting with respect to the election of directors. Accordingly,
the holders of more than 50% of the shares can, if they choose to do so, elect
the entire Board of Directors and determine most matters on which stockholders
are entitled to vote.
Dividend Rights. Subject to the preferential rights of holders of
outstanding shares of preferred stock, holders of shares are entitled to share
equally in all dividends declared on shares of common stock, whether payable
in cash, property or securities of our company.
Liquidation Rights; Other Rights. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of our company, the holders
of Shares are entitled to share equally in the assets available for
distribution after payment of liabilities, subject to the rights of the
holders of outstanding shares of preferred stock. Holders of shares have no
conversion, redemption or preemptive rights.
Transfer Agent and Registrar
The transfer agent and registrar for the our common stock is National
City Bank, Cleveland, Ohio.
PIK Preferred Stock
Our Board of Directors has authorized the designation of 3,000,000 shares
of 15% Senior Exchangeable Preferred Stock Due 2010 ("PIK Preferred Stock"),
par value $0.001 per share. Each share of PIK Preferred Stock accretes
cumulative, quarterly dividends at a compound rate of 15% per annum. Prior to
August 1, 2003, dividends on the PIK Preferred Stock are payable in additional
shares of PIK Preferred Stock. After August 1, 2003, dividends are payable in
cash. Shares of PIK Preferred Stock have a liquidation preference equal to the
sum of $25 plus, subject to certain conditions, accreted dividends. Shares of
PIK Preferred Stock are non-voting, except as otherwise provided by law or by
agreement. The PIK Preferred Stock is subject to redemption at the option of
Holdings at any time, at 115.00% of liquidation preference prior to August 1,
2003, at 107.50% of liquidation preference from August 1, 2003 to July 31,
2004, at 105.00% of liquidation preference from August 1, 2004 to July 31,
2005, at 102.50% of liquidation preference from August 1, 2005 to July 31,
2006, and at 100.00% of liquidation preference thereafter. On August 1, 2010,
the PIK Preferred Stock will be subject to mandatory redemption by Holdings.
Upon the occurrence of a Change of Control, each holder of PIK Preferred Stock
will have the right to require Holdings to repurchase all or any part of such
holder's PIK Preferred Stock at an offer price in cash equal to 101% of the
liquidation preference thereof. Holdings may at any time but subject to
certain conditions exchange all outstanding shares of PIK Preferred Stock for
15% Subordinated Exchange Debentures due 2010 (the "Exchange Debentures"). The
Exchange Debentures will rank senior to all other subordinated debt (but
junior to our 14% Senior Discount Notes due 2008 and our guarantee of
Insilco's obligations under its credit facility), preferred stock and common
equity of Holdings.
24
<PAGE>
Warrants
In addition to the warrants offered hereby, we issued warrants to
purchase 62,400 shares of our common stock at a purchase price of $0.001 per
share as part of units with Insilco's 12% Senior Subordinated Notes due 2007
issued November 2, 1998. In connection with the offering of the 12% units, we
granted to the holders thereof certain registration rights related thereto.
Other Stockholder Arrangements
In connection with the DLJMB equity investment, we and the DLJMB Funds
entered into an Investors' Agreement (the "Investors' Agreement") granting the
DLJMB Funds the right to demand registration of any of our common stock and
warrants acquired in the DLJMB equity investment or thereafter issued by us in
respect of such our common stock or warrants by way of conversion, exchange,
stock dividend, split or combination, recapitalization, merger, consolidation,
other reorganization or otherwise (the "Investors' Registrable Securities").
Under the Investors' Agreement, DLJMB (on behalf of the DLJMB Funds) is
entitled to require that we register some or all of the Investors' Registrable
Securities for a period of up to 180 days (or such lesser period as is
necessary to complete such offering) (an "Investors' Demand Registration").
The DLJMB Funds are in the aggregate limited to four such Investors' Demand
Registrations. In addition, pursuant to the terms of the Investors' Agreement,
if we proposes to file a registration statement under the Securities Act with
respect to any offering of (or including) our common stock or warrants (other
than certain registrations relating to our common stock or warrants issued in
certain business combinations or pursuant to certain employee benefit plans),
then we will provide, subject to certain limitations, the DLJMB Funds an
opportunity to register their Investors' Registrable Securities of the same
type as are proposed to be registered on the same terms and conditions (an
"Investors' Piggyback Registration").
In connection with any Investors' Demand Registration or Investors'
Piggyback Registration, we will be responsible for all expenses incurred in
connection with such registration other than underwriting fees, discounts or
commissions that may be payable in connection with the sale of Investors'
Registrable Securities. In addition, we will indemnify the DLJMB Funds and the
underwriters and each of their employees and affiliates against certain
liabilities, including liabilities under the Securities Act, or will
contribute to payments such indemnitee may be required to make in respect
thereof.
CVC is also a party to the Investors' Agreement. Under the Investor's
Agreement, CVC has the right to participate pro rata in any sale by the DLJMB
Funds of their our common stock above a threshold amount, and the DLJMB Funds
have the right to require CVC to participate pro rata in certain sales by the
DLJMB Funds of their our common stock. The Investors' Agreement also grants
CVC the right to participate in any demand registration made by the DLJMB
Funds, on a pro rata basis, and certain pre-emptive and other rights.
We have agreed to take such actions as may be necessary to permit the
DLJMB Funds to resell their shares of PIK Preferred Stock pursuant to Rule
144A under the Securities Act, including, without limitation, preparing an
offering memorandum and entering into customary purchase agreements and
registration rights agreements.
The foregoing summarizes certain provisions of the Investors' Agreement,
but is not complete and is subject to, and qualified by reference to, the rest
of the Investors' Agreement, a copy of which has been filed as an exhibit to
the registration statement of which this prospectus forms a part.
Holdings and Water Street entered into a registration rights agreement
granting Water Street, among other things, the right to demand registration of
the our common stock retained by Water Street in the Merger or thereafter
issued by Holdings in respect of such our common stock by way of conversion,
exchange, stock dividend, split or combination, recapitalization, merger,
consolidation, other reorganization or otherwise (the "Registrable
Securities").
25
<PAGE>
Under the registration rights agreement, Water Street is entitled to
require that we register some or all of the Registrable Securities for a
period of up to 180 days (or such lesser period as is necessary to complete
such offering) (a "Demand Registration"). Water Street is limited to one such
Demand Registration, which it may exercise at any time from the date
commencing six months after the Mergers and continuing through the first
anniversary thereof. In addition, pursuant to the terms of the registration
rights agreement, for the period commencing six months after the Mergers and
continuing through the first anniversary of the Mergers, if we propose to file
a registration statement under the Securities Act with respect to any offering
of (or including) our common stock (other than certain registrations relating
to our common stock issued in certain business combinations or pursuant to
certain employee benefit plans), then we will provide Water Street an
opportunity to register its Registrable Securities on the same terms and
conditions (a "Piggyback Registration"). To the extent any affiliates of Water
Street may hold or acquire our common stock, such affiliates will be permitted
to participate in any registration contemplated by the registration rights
agreement on the same terms as Water Street.
In connection with any Demand Registration or Piggyback Registration, we
will be responsible for all expenses incurred in connection with such
registration, except that Water Street (or such other participating holders,
if any) will pay any underwriting discounts or commissions that may be payable
in connection with the sale of its Registrable Securities. In addition, we
will indemnify Water Street and the underwriters and each of their employees
and affiliates against certain liabilities, including liabilities under the
Securities Act, or will contribute to payments Water Street may be required to
make in respect thereof. The registration rights agreement terminates, except
with respect to rights to indemnification, upon the earliest to occur of the
sale of all of the Registrable Securities, the first anniversary of the
Mergers and the mutual consent of the parties.
The foregoing summarizes the material provisions of the registration
rights agreement, but is not complete and is subject to, and qualified in its
entirety by reference to, the rest of the registration rights agreement, a
copy of which has been filed as an exhibit to the registration statement of
which this prospectus forms a part.
Section 203 of Delaware General Corporation Law
Holdings is a Delaware corporation subject to Section 203 of the DGCL. In
general, Section 203 prevents an "interested stockholder" (defined generally,
as a person owning 15% or more of a corporation's outstanding voting stock)
from engaging in a "business combination" (as defined) with a Delaware
corporation for three years following the date such person became an
interested stockholder, subject to certain exceptions, such as transactions
effected with the approval of the Board of Directors or of the holders of at
least two-thirds of the outstanding shares of voting stock not owned by the
interested stockholder.
26
<PAGE>
PLAN OF DISTRIBUTION
We will receive no proceeds from this offering, other than in connection
with the exercise of warrants. The offered securities offered hereby may be
sold by the warrantholders and the selling stockholders from time to time in
transactions in the over-the-counter market, in negotiated transactions, in
underwritten offerings, or a combination of such methods of sale, at fixed
prices which may be changed, at market prices prevailing at the time of sale,
at prices related to prevailing market prices or at negotiated prices. The
warrantholders and selling stockholders may effect such transactions by
selling the offered securities to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions
or commissions from the warrantholders and the selling stockholders and/or the
purchasers of the offered securities for whom such broker-dealers may act as
agents or to whom they sell as principals, or both (which compensation as to a
particular broker-dealer might be in excess of customary commissions).
In order to comply with the securities laws of certain states, if
applicable, the offered securities will be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in certain
states the warrants and the our common stock may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is
complied with.
The warrantholders and the selling stockholders and any broker-dealers or
agents that participate with the warrantholders and the selling stockholders
in the distribution of the offered securities may be deemed to be
"underwriters" within the meaning of the Securities Act, and any commissions
received by them and any profit on the resale of the offered securities
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.
Each warrantholder and selling stockholder will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of shares of the our
common stock by the warrantholders and the selling stockholders.
LEGAL MATTERS
Certain legal matters with respect to the validity of the offered
securities offered hereby are being passed upon for us by Davis Polk &
Wardwell, New York, New York.
EXPERTS
The financial statements of Holdings as of December 31, 1998 and 1997,
and for each of the years in the three-year period ended December 31, 1998
have been incorporated by reference herein and in the registration statement
in reliance upon the report of KPMG LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
27
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses, other than underwriting discounts
and commissions, payable by the Company in connection with the sale of the
Offered Securities being registered. All of the amounts shown are estimates,
except for the registration fee.
Registration fee................................... $ 26,298
Legal fees and expenses............................ $ 25,000
Accounting fees and expenses....................... $ 5,000
Other.............................................. $ 202
--------
Total......................................... $ 56,500
=========
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 145 of the Delaware General Corporation Law permits a corporation
to indemnify any of its directors or officers who was or is a party, or is
threatened to be made a party to any third party proceeding by reason of the
fact that such person is or was a director or officer of the corporation,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reason to believe that such person's conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, the corporation is permitted to indemnify directors and officers
against expenses (including attorneys' fees) actually and reasonably incurred
by them in connection with the defense or settlement of an action or suit if
they acted in good faith and in a manner the person reasonably believed to be
in or not opposed to the best interests of the corporation and except that no
indemnification shall be made if such person shall have been adjudged liable
to the corporation, unless and only to the extent that the court in which the
action or suit was brought shall determine upon application that the defendant
directors or officers are fairly and reasonably entitled to indemnity for such
expenses despite such adjudication of liability. Article Seventeen of the
Company's Certificate of Incorporation provides for full indemnification of
its officers, directors, employees and agents to the extent permitted by
Delaware law.
The Company provides insurance from commercial carriers against certain
liabilities incurred by the directors and officers of the Company.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibits.
Exhibit
Number
- -------
2.1 Agreement and Plan of Merger, dated as of March 24, 1998, among
Insilco, INR Holding Co., and Silkworm Acquisition Corporation
(incorporated by reference to Exhibit 10(n) to the Registration
Statement on Form S-4 (File No. 333-51145) of Insilco).
2.2 Amendment No. 1 to the Agreement and Plan of Merger, dated June 8,
1998, among Insilco, INR Holding Co. and Silkworm Acquisition
Corporation (incorporated by reference Exhibit 10(r) to the
Registration Statement on Form S-4 (File No. 333-51145) of Insilco).
II-1
<PAGE>
Exhibit
Number
- -------
4.1 Warrant Agreement dated as of August 17, 1998 between Silkworm
Acquisition Corporation and National City Bank, as Warrant Agent
(incorporated by reference to Exhibit 4.1 to the Registration
Statement on Form S-1 (File No. 333-65039) of the Company).
4.2 Assumption Agreement dated as of August 17, 1998 between Insilco
Holding Co. and National City Bank, as Warrant Agent (incorporated by
reference to Exhibit 4.2 to the Registration Statement on Form S-1
(File No. 333-65039) of the Company).
4.3 Certificate of Designation with respect to Pay-in-kind 15% Senior
Exchangeable Preferred Stock due 2010 (incorporated by reference to
Exhibit 4.4 to the Registration Statement on Form S-1 (File No.
333-65039) of the Company).
4.4 Investors' Agreement, dated as of August 17, 1998, among Insilco
Holding Co. and the investors named therein (incorporated by reference
to Exhibit 4.5 to the Registration Statement on Form S-1 (File No.
333-65039) of the Company).
4.5 Indenture, dated as of August 17, 1998 between Silkworm Acquisition
Corporation and the Trustee (incorporated by reference to Exhibit 4.6
to the Registration Statement on Form S-1 (File No. 333- 65039) of the
Company).
4.6 First Supplemental Indenture, dated as of August 17, 1998 between
Insilco Holding Co. and the Trustee (incorporated by reference to
Exhibit 4.7 to the Registration Statement on Form S-1 (File No.
333-65039) of the Company).
4.7** Registration Rights Agreement dated as of August 17, 1998 between Water
Street Corporate Recovery Fund I, L.P. and the Company.
5.1** Opinion of Davis Polk & Wardwell with respect to the Offered Securities
being registered.
10.1 Insilco Holding Co. Direct Investment Program (incorporated by
reference to Exhibit 4(c) to the Registration Statement on Form S-8
(File No. 333-61809)).
10.2 Insilco Holding Co. Stock Option Plan (incorporated by reference to
Exhibit 4(d) to the Registration Statement on Form S-8 (File No.
333-61809)).
10.3 Insilco Holding Co. and Insilco Corporation Equity Unit Plan
(incorporated by reference to Exhibit 4(c) to the Registration
Statement on Form S-8 (File No. 333-61811)).
13.1 Annual Report on Form 10-K/A for the period ended December 31, 1998
filed with the Securities and Exchange Commission on April 30, 1999
(SEC File Number 000-24813).
23.1** Consent of Davis Polk & Wardwell (contained in their opinion filed as
Exhibit 5.1).
23.2* Consent of KPMG LLP.
24.1* Power of Attorney (Included in Part II of this Registration Statement
under the caption "Signatures").
- -------------------
* Filed herewith
** Previously filed
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration
II-2
<PAGE>
Statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and
any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) under the Securities Act of
1933 if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price
set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the provisions described in Item 15, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has
duly caused this post-effective amendment to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Dublin, State of Ohio,
on the 14th day of May, 1999.
INSILCO HOLDING CO.
By: /s/ ROBERT L. SMIALEK
-----------------------------------
Chairman and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Robert L. Smialek, David A. Kauer and Kenneth
H. Koch, or each of them, as his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, in any and all capacities, to sign the
Registration Statement filed herewith and any and all amendments to said
Registration Statement (including post-effective amendments and related
registration statements (or amendments thereto) filed pursuant to Rule 462
promulgated under the Securities Act of 1933), and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming that all said attorneys-in-fact and agents, or
their substitute or substitutes may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
Signature Title Date
- ------------------------------------ ----------------------------------------- ------------
<S> <C> <C>
* Chairman and Chief Executive Officer May 14, 1999
- ------------------------------------ Principal Executive Officer)
Robert L. Smialek
* Vice President and Chief Financial Officer May 14, 1999
- ------------------------------------ (Principal Financial Officer)
David A. Kauer
* Vice President and Comprtoller May 14, 1999
- ------------------------------------ (Principal Accounting Officer)
Michael R. Elia
* May 14, 1999
- ------------------------------------ Director
William F. Dawson
* May 14, 1999
- ------------------------------------ Director
Thompson Dean
* May 14, 1999
- ------------------------------------ Director
David Y. Howe
II-4
<PAGE>
Signature Title Date
- ------------------------------------ ----------------------------------------- ------------
- ----------------------------------- Director
Randall E. Curran
- ------------------------------------ Director
Keith Palumbo
- ------------------------------------ Director
John F. Fort III
</TABLE>
* By: /s/ David A. Kauer
----------------------------------
David A. Kauer, Attorney-in-fact,
pursuant to powers of attorney
previously filed as part of this
registration statement
II-5
Exhibit 23.2
Consent of Independent Auditors'
The Board of Directors
Insilco Holding Co.:
We consent to the use of our report incorporated herein by reference and to the
reference to our Firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
Columbus, Ohio
May 12, 1999
