UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 9)
Insilco Corporation
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(Name of Issuer)
Common Stock (Par Value $.001 Per Share)
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(Title of Class of Securities)
457659704
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(CUSIP Number)
David J. Greenwald, Esq.
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
(212) 902-1000
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
March 24, 1998
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: [ ].
PAGE 1 OF 10
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CUSIP NO. 457659704
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Water Street Corporate Recovery Fund I, L.P.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
OO; WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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Number of 7. SOLE VOTING POWER
Shares -0-
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Beneficially 8. SHARED VOTING POWER
Owned By 1,863,878
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Each 9. SOLE DISPOSITIVE POWER
Reporting -0-
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Person With 10. SHARED DISPOSITIVE POWER
1,863,878
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,863,878
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
45.5%
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14. TYPE OF REPORTING PERSON
PN
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PAGE 2 OF 10
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CUSIP NO. 457659704
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Goldman Sachs Group, L.P.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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Number of 7. SOLE VOTING POWER
Shares 334
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Beneficially 8. SHARED VOTING POWER
Owned By 1,863,878
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Each 9. SOLE DISPOSITIVE POWER
Reporting 334
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Person With 10. SHARED DISPOSITIVE POWER
1,863,878
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,864,212
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
45.5%
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14. TYPE OF REPORTING PERSON
HC; PN
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PAGE 3 OF 10 PAGES
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CUSIP NO. 457659704
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Goldman, Sachs & Co.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
WC
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(D) OR 2(E)
[X]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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Number of 7. SOLE VOTING POWER
Shares -0-
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Beneficially 8. SHARED VOTING POWER
Owned By 1,863,878
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Each 9. SOLE DISPOSITIVE POWER
Reporting -0-
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Person With 10. SHARED DISPOSITIVE POWER
1,863,878
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,863,878
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
- ------------------------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
45.5%
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14. TYPE OF REPORTING PERSON
BD; PN; IA
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PAGE 4 OF 10 PAGES
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AMENDMENT NO. 9 TO
SCHEDULE 13D
RELATING TO THE COMMON STOCK OF
INSILCO CORPORATION
Water Street Corporate Recovery Fund I, L.P. ("Water Street"),
Goldman, Sachs & Co. ("Goldman Sachs") and The Goldman Sachs Group, L.P. ("GS
Group" and, collectively with Water Street and Goldman Sachs, the "Reporting
Persons")* hereby file this Amendment No. 9 (this "Amendment No. 9") to the
Statement on Schedule 13D filed with respect to the Common Stock, par value
$.001 per share (the "Common Stock"), of Insilco Corporation, a Delaware
corporation (the "Company"), as most recently amended by Amendment No. 8 thereto
dated November 13, 1997 (as amended, the "Schedule 13D"). Unless otherwise
indicated, all capitalized terms not otherwise defined herein shall have the
same meanings as those set forth in the Schedule 13D.
This Amendment No. 9 is being filed to report the entering into by
Water Street of a Voting Agreement (as defined herein) in connection with the
Agreement and Plan of Merger (the "Merger Agreement"), dated as of March 24,
1998, among the Company, INR Holding Company, a wholly-owned subsidiary of the
Company ("Existing Sub"), and Silkworm Acquisition Corporation ("Merger Sub"),
which provides that, among other things, upon the terms and subject to the
conditions thereof, (i) a newly formed, wholly-owned subsidiary of Existing Sub
will be merged with and into the Company, with the Company surviving as a wholly
owned subsidiary of Existing Sub (the "Reorganization Merger") and (ii)
immediately following the Reorganization Merger, Merger Sub will be merged with
and into Existing Sub, with Existing Sub continuing as the surviving corporation
(the "Merger"). Existing Sub will change its name to Insilco Holding
Corporation ("Holdings").
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended and supplemented as follows:
As described more fully in Item 6 of this Amendment No. 9, on March
24, 1998, Water Street entered into a Voting Agreement (the "Voting Agreement")
with the Company and Merger Sub, a newly formed corporation which is an
affiliate of DLJ Merchant Banking Partners II, L.P. and affiliated funds
(together with any subsidiaries and affiliates, "DLJMB"). The Voting Agreement
was entered into by Water Street, the Company and Merger Sub in connection with
the Merger Agreement and the transactions contemplated thereby (including,
without limitation, the Reorganization Merger and the Merger). Pursuant to the
Voting Agreement, if the Merger Agreement is terminated under certain
circumstances and the Voting Agreement remains in effect, and there is a tender
or exchange offer outstanding by any person to purchase Common Stock into which
Water Street chooses to tender, then Merger Sub will have the option (the
"Option") to purchase all (but not less than all) of the Water Street Securities
(as defined herein) at a price of $44.50 per share.
* Neither the present filing nor anything contained herein shall be construed as
an admission that Water Street, Goldman Sachs or GS Group constitute a "person"
for any purpose other than Section 13(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or that Water Street, Goldman Sachs and GS
Group constitute a "group" for any purpose.
PAGE 5 OF 10 PAGES
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The summary of the Voting Agreement contained in this Amendment No.
9 does not purport to be complete and is subject to, and qualified in its
entirety by reference to, the text of the Voting Agreement, which is filed as
Exhibit 11 hereto and incorporated herein by reference.
In a joint press release issued by the Company and Donaldson, Lufkin
& Jenrette, Inc. ("DLJ") on March 24, 1998 (the "Press Release"), the parties
stated that, upon consummation of the transactions contemplated by the Merger
Agreement, approximately 90% of the Common Stock will become owned by DLJMB and
that, under the terms of the Merger Agreement, the Company's stockholders will
receive total consideration of $44.50 per share, consisting of $42.98 in cash
and 0.03419 shares of retained stock of the surviving corporation. The parties'
obligations to consummate the Merger Agreement are subject to various conditions
as set forth therein. A copy of the Press Release is filed as Exhibit 12 hereto
and incorporated herein by reference, and the foregoing is qualified in its
entirety by reference thereto.
In addition, consummation of the Merger Agreement, the
Reorganization Merger and the Merger, and the transactions contemplated thereby,
will result in: (1) the retirement, for cash consideration, of all
of the Company's outstanding options at a price equal to the difference between
$44.50 per share and the exercise price per share of the related options; (2)
the replacement of the existing board of directors of the Company (other than
the chief executive officer) with the directors of Merger Sub; and (3) the
incurrence of additional indebtedness.
On April 1, 1998, 16,000 options to purchase Common Stock issued
pursuant to the Company's 1993 Nonemployee Director Stock Incentive Plan (the
"Director Plan") and beneficially owned by Water Street will vest. The vesting
of such options represent the vesting of the last 20% of the 80,000 options
beneficially owned by Water Street and granted pursuant to the Director Plan
(collectively, the "Water Street Options"). Water Street Options to purchase
40,000 shares of Common Stock are exerciseable at a price of $17 per share
and Water Street Options to purchase 40,000 shares of Common Stock are
exerciseable at a price of $30 per share. Pursuant to the terms of the Director
Plan, such options will terminate on April 2, 1998. It is currently expected
that all of the Water Street Options will be exercised prior to their scheduled
termination.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5(a) is hereby amended and restated as follows:
(a) As of the date hereof, Water Street beneficially owns an
aggregate of 1,863,878 shares of Common Stock, including the 80,000 shares of
Common Stock issuable upon exercise of the Water Street Options. Based upon the
foregoing, Water Street beneficially owns approximately 45.5% of the Common
Stock reported by the Company to be outstanding as of March 24, 1998 (as
represented by the Company in the Merger Agreement).
As of the date hereof, GS Group owns an aggregate of 334 shares of
Common Stock and, in addition, each of GS Group and Goldman Sachs may be deemed
to be the beneficial owner of the 1,863,878 shares of Common Stock, including
the 80,000 shares of Common Stock issuable upon the exercise of the Water Street
Options, representing in the aggregate approximately 45.5% of the outstanding
Common Stock. Each of GS Group and Goldman Sachs disclaims beneficial ownership
of the shares of Common Stock held by Water Street to the extent the partnership
interests in Water Street are held by persons other than GS Group, Goldman Sachs
or their affiliates. To the knowledge of the Reporting Persons, each of the
persons listed on Schedule I owns 167 shares of Common Stock. Each of the
Reporting Persons disclaims beneficial ownership with respect to such shares.
PAGE 6 OF 10 PAGES
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Item 5(c) is hereby amended and supplemented as follows:
(c) In connection with the Voting Agreement, and as further
described in Item 4 hereof, Water Street has granted Merger Sub the Option,
which is exercisable upon the terms and conditions contained in the Voting
Agreement. The summary of the Voting Agreement contained in this Amendment No. 9
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, the text of the Voting Agreement, which is filed as Exhibit 11
hereto and incorporated herein by reference.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Item 6 is amended and supplemented as follows:
As discussed in Item 4, on March 24, 1998, Water Street entered into
the Voting Agreement. Pursuant to the Voting Agreement, Water Street has agreed
during the Agreement Period (as defined below), upon the terms and subject to
the conditions contained therein, (i) to vote an aggregate of 1,783,878 shares
of the Company's outstanding Common Stock (the "Water Street Securities") to
approve and adopt the Merger Agreement and the Merger and any actions directly
and reasonably related thereto at any meeting or meetings of the stockholders of
the Company (including any adjournments thereof) at which the Merger Agreement,
or such other actions, are submitted for the consideration and vote of the
Company's stockholders, so long as such meeting is held and completed (including
any adjournments thereof) during the Agreement Period, except as otherwise
permitted in the Voting Agreement, and (ii) subject to certain exceptions
contained in the Voting Agreement, in connection therewith, not to, directly or
indirectly, (I) take any action to solicit, initiate, encourage or facilitate
any Acquisition Proposal (as defined in the Merger Agreement) or (II) engage in
negotiations or discussions with, or furnish or disclose any non-public
information relating to the Company or any Subsidiary (as defined in the Merger
Agreement) or afford access to the properties, books or records of the Company
or any Subsidiary to, or otherwise assist, facilitate or encourage, any Third
Party (as defined in the Merger Agreement), other than Merger Sub, its
affiliates and their respective directors, officers, employees, agents or
representatives, that Water Street believes may be considering making, or has
made, an Acquisition Proposal. In addition, if at any time (i) there is a tender
or exchange offer commenced by any person to purchase Common Stock and (ii) the
Company or Merger Sub, as the case may be, has terminated the Merger Agreement
under the circumstances in which the Agreement Period would otherwise continue
for 90 days thereafter, then Water Street will have the right, subject to Merger
Sub's right to exercise its Option, to validly tender any or all of its Water
Street Securities into the tender or exchange offer three business days prior to
any scheduled expiration of such offer without breaching the provisions of the
Voting Agreement and the Agreement Period will be deemed to terminate upon the
consummation of such offer. The Voting Agreement also terminates upon purchase
of the Water Street Securities pursuant to the Option.
As defined in the Voting Agreement, the "Agreement Period" is the
period beginning on the date of the Voting Agreement and ending on the earliest
of (i) the effective time of the Merger, (ii) the date that is 90 days after the
termination of the Merger Agreement by the Company or Merger Sub based on
certain termination provisions in the Merger Agreement specified in the Voting
Agreement, and (iii) the date of termination of the Merger Agreement for any
other reason.
During the Agreement Period, Water Street has also agreed that:
(A) it will not vote any of the Water Street Securities in favor of the
approval of any other merger, consolidation, sale of assets, reorganization,
recapitalization, liquidation or winding up of the Company or any other
extraordinary transaction involving the Company or any matters related to or in
connection
PAGE 7 OF 10 PAGES
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therewith, or any corporate action relating to or the consummation of which
would either frustrate the purposes of, or prevent or delay the consummation of,
the transactions contemplated by the Merger Agreement; (B) it will not sell,
transfer, assign, encumber or otherwise dispose of any Water Street Securities,
other than as permitted pursuant to the terms of the Voting Agreement; and (C)
it will not exercise any rights to demand appraisal of Common Stock with respect
to the Merger. In connection with the Voting Agreement, and as further described
in Item 4 hereof, Water Street has granted Merger Sub the Option, which is
exercisable upon the terms and conditions contained in the Voting Agreement.
The summary of the Voting Agreement contained in this Amendment No.
9 does not purport to be complete and is subject to, and qualified in its
entirety by reference to, the text of the Voting Agreement, which is filed as
Exhibit 11 hereto and incorporated herein by reference.
Goldman Sachs is acting as a financial advisor to the Company in
connection with the Merger. Pursuant to such engagement, the Company has agreed
to pay Goldman Sachs a fee of $2 million for advice in connection with the
Merger. The Company has also agreed to reimburse Goldman Sachs for certain of
its out-of-pocket expenses and to indemnify Goldman Sachs against certain
liabilities, including certain liabilities under the federal securities laws, in
connection with the Merger.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 is hereby amended and supplemented by adding thereto the
following:
(11) Voting Agreement, dated as of March 24, 1998, among the
Company, Merger Sub and Water Street.
(12) Joint Press Release of the Company and DLJ, dated March 24,
1998.
PAGE 8 OF 10 PAGES
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
WATER STREET CORPORATE RECOVERY FUND
I, L.P.
By: Goldman, Sachs & Co., its General
Partner
By: /s/ Richard A. Friedman
___________________________
Name: Richard A. Friedman
Title: Managing Director
GOLDMAN, SACHS & CO.
By: /s/ Richard A. Friedman
______________________________
Name: Richard A. Friedman
Title: Managing Director
THE GOLDMAN SACHS GROUP, L.P.
By: The Goldman Sachs Corporation,
its general partner
By: /s/ Richard A. Friedman
___________________________
Name: Richard A. Friedman
Title: Executive Vice President
Dated: March 24, 1998
PAGE 9 OF 10 PAGES
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INDEX TO EXHIBITS
Exhibit No. Exhibit Page
(11) Voting Agreement, dated as of March 24, 1998, among the
Company, Merger Sub and Water Street.
(12) Joint Press Release of the Company and DLJ,
dated March 24, 1998.
PAGE 10 OF 10 PAGES
EXHIBIT 11
VOTING AGREEMENT
In consideration of Silkworm Acquisition Corporation, a Delaware
corporation ("HOLDCO"), Insilco Corporation, a Delaware corporation (the
"COMPANY"), and INR Holding Co., a Delaware corporation and existing wholly
owned subsidiary of the Company ("EXISTING SUB"), entering into on the date
hereof an Agreement and Plan of Merger (the "MERGER AGREEMENT") which provides,
among other things, that upon the terms and subject to the conditions thereof,
(i) pursuant to the Reorganization Merger (as defined in the Merger Agreement),
the Company will become a wholly-owned subsidiary of Existing Sub and the shares
of common stock in the Company (the "COMPANY COMMON STOCK") will be exchanged
for shares of common stock of Existing Sub, having the same rights, powers,
privileges and preferences as the Company Common Stock and (ii) immediately
following the Reorganization Merger, Holdco will be merged with and into
Existing Sub (the "MERGER") with Existing Sub continuing as the surviving
corporation, and pursuant thereto each outstanding share of the Company Common
Stock will be converted into the right to receive the Merger Consideration (as
defined in the Merger Agreement) in accordance with the terms of the Merger
Agreement, the undersigned holder (the "STOCKHOLDER") of shares of the Company
Common Stock agrees with Holdco as follows:
1. During the period (the "AGREEMENT PERIOD") beginning on the date
hereof and ending on the earliest of (i) the Effective Time (as defined in the
Merger Agreement), (ii) the date that is 90 days after the termination of the
Merger Agreement in accordance with Section 9.01(e), 9.01(f) or 9.01(g) thereof
and payment in full of all amounts (if any) payable to Holdco pursuant to
Section 5.04 of the Merger Agreement and (iii) the date of termination of the
Merger Agreement for any other reason, the Stockholder hereby agrees to vote
1,783,878 shares of Company Common Stock (the "STOCKHOLDER SECURITIES") to
approve and adopt the Merger Agreement and the Merger (provided that the
Stockholder shall not be required to vote in favor of the Merger Agreement or
the Merger if the Merger Agreement has, without the written consent of the
Stockholder, been amended in any manner that is material and adverse to the
Stockholder) and any actions directly and reasonably related thereto at any
meeting or meetings of the stockholders of the Company, and at any adjournment
thereof, at which such Merger Agreement, or such other actions, are submitted
for the consideration and vote of the stockholders of the Company so long as
such meeting is held and completed (including any adjournment thereof) prior to
the termination of the Agreement Period. Notwithstanding anything to the
contrary provided in this Voting Agreement, if at any time (i) there is a tender
or exchange offer (an "OFFER") commenced by any person to purchase Company
Common Stock and (ii) the Merger Agreement has been terminated pursuant to
Section 9.01(e), 9.01(f) or 9.01(g) thereof, then the Stockholder shall have the
right to validly tender any or all of its Stockholder Securities into the Offer
three business days (the "TENDER DAY") prior to any scheduled expiration of such
Offer. Any such tender or sale pursuant thereto shall not be a breach of the
provisions of this Voting Agreement and the Agreement Period shall be deemed to
end upon consummation of such Offer. In addition, nothing in this Voting
Agreement shall preclude the Stockholder from making, during the Agreement
Period, any election with respect to the form of consideration in respect of an
Acquisition Proposal.
<PAGE>
At or prior to 10:00 A.M. (New York City Time) on the Tender Day,
Stockholder will deliver to Holdco written notice if it elects to tender into
such Offer. If Stockholder elects to tender into the Offer, Holdco will have the
nonassignable option to purchase all (but not less than all) of the Stockholder
Securities at a price of $44.50 per share in cash by delivery to Stockholder of
a written notice making such election no later than 10:00 A.M. (New York City
Time) on the business day immediately following the Tender Day. In the event
Holdco exercises such option, Stockholder will withdraw any Stockholder
Securities that were tendered in the Offer, and the settlement for the purchase
thereof by Holdco pursuant to this paragraph will take place by 12:00 Noon (New
York City Time) on the second business day immediately following the Tender Day.
This Voting Agreement shall terminate immediately following such purchase, or
upon Holdco's failure to consummate such purchase by such designated time.
2. During the Agreement Period, the Stockholder hereby agrees that it
will not vote any of the Stockholder Securities in favor of the approval of any
other merger, consolidation, sale of assets, reorganization, recapitalization,
liquidation or winding up of the Company or any other extraordinary transaction
involving the Company or any matters related to or in connection therewith, or
any corporate action relating to or the consummation of which would either
frustrate the purposes of, or prevent or delay the consummation of, the
transactions contemplated by the Merger Agreement.
3. During the Agreement Period, the Stockholder will not, directly or
indirectly, (i) take any action to solicit, initiate, encourage or facilitate
any Acquisition Proposal or (ii) engage in negotiations or discussions with, or
furnish or disclose any nonpublic information relating to the Company or any
Subsidiary or afford access to the properties, books or records of the Company
or any Subsidiary to, or otherwise assist, facilitate or encourage, any Third
Party (other than Holdco, its affiliates and their respective directors,
officers, employees, agents or representatives) that the Stockholder believes
may be considering making, or has made, an Acquisition Proposal. The Stockholder
will promptly notify Holdco after receipt of any Acquisition Proposal or any
indication from any Third Party that it is considering making an Acquisition
Proposal and will keep Holdco fully informed of the status and details of any
such Acquisition Proposal, indication or request. Anything herein to the
contrary notwithstanding, this Voting Agreement shall not limit actions taken,
or require actions to be taken, (i) by any party related to the Stockholder who
is, or one or more of whose affiliates, directors, partners, officers or
employees is, a director or officer of the Company that are required or
restricted by such director's fiduciary duties or such officer's employment
duties, or permitted by the Merger Agreement, and that, in each case, are
undertaken solely in such person's capacity as a director or officer of the
Company and, in the case of an officer of the Company, as directed by the Board
of Directors of the Company or (ii) by an affiliate of the Stockholder, in such
affiliate's capacity as investment banker, investment broker or financial
advisor to the Company, to the extent such affiliate performs such actions at
the request of the Board of Directors of the Company in connection with the
exercise by the Board of Directors of its fiduciary obligations under applicable
law consistent with the Company's rights and obligations under the Merger
Agreement.
2
<PAGE>
4. The Stockholder agrees not to exercise any rights (including, without
limitation, under Section 262 of the General Corporation Law of the State of
Delaware) to demand appraisal of any shares of Company Common Stock owned by the
Stockholder with respect to the Merger.
5. The Stockholder hereby represents and warrants to Holdco that as of
the date hereof:
(a) the Stockholder (i) owns beneficially all of the Stockholder
Securities, (ii) has the full and unrestricted legal power, authority and right
to enter into, execute and deliver this Voting Agreement without the consent or
approval of any other person and (iii) is not party to any voting agreement, and
has not granted any person any proxy (revocable or irrevocable), with respect to
the Stockholder Securities (other than this Voting Agreement);
(b) this Voting Agreement is the valid and binding agreement of the
Stockholder; and
(c) other than as disclosed pursuant to the Merger Agreement, no
investment banker, broker or finder is entitled to a commission or fee from the
Company in respect of this Voting Agreement based upon any arrangement or
agreement made by or on behalf of the Stockholder.
6. If any provision of this Voting Agreement shall be invalid or
unenforceable under applicable law, such provision shall be ineffective to the
extent of such invalidity or unenforceability only, without in any way affecting
the remaining provisions of this Voting Agreement.
7. This Voting Agreement may be executed in two or more counterparts
each of which shall be an original with the same effect as if the signatures
hereto and thereto were upon the same instrument.
8. The parties hereto agree that if for any reason any party hereto
shall have failed to perform its obligations under this Voting Agreement, then
the party seeking to enforce this Voting Agreement against such non-performing
party shall be entitled to specific performance and injunctive and other
equitable relief, and the parties hereto further agree to waive any requirement
for the securing or posting of any bond in connection with the obtaining of any
such injunctive or other equitable relief. This provision is without prejudice
to any other rights or remedies, whether at law or in equity, that any party
hereto may have against any other party hereto for any failure to perform its
obligations under this Voting Agreement.
9. This Voting Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
10. The Stockholder will, upon reasonable request, execute and deliver
any additional documents deemed by Holdco to be necessary or desirable to
complete and effectuate the covenants contained herein.
11. This Voting Agreement shall terminate upon the termination of the
Agreement Period.
3
<PAGE>
12. The Stockholder agrees that it will not sell, transfer, assign,
encumber or otherwise dispose of any of the Stockholder Securities (whether to
an affiliate or otherwise) until the expiration of the Agreement Period, other
than pursuant to the Reorganization Merger or pursuant to the terms of this
Voting Agreement.
13. Holdco and the Company understand and agree that this Voting
Agreement pertains only to the Stockholder and not to any of its affiliates, if
any, or advisers.
14. (a) Holdco and the Company severally and not jointly represent and
warrant to the Stockholder that (i) there is no agreement, understanding or
commitment, written or oral, to pay any consideration directly or indirectly in
connection with the Merger or otherwise to or for the benefit of any holder of
Company Common Stock or options thereon other than as set forth in the Merger
Agreement (except, in the case of directors, employees, agents, customers,
suppliers or contractors of the Company who are also holders, such consideration
as is payable by the Company in the ordinary course of business and except for
amounts payable to officers, directors or employees in connection with or
pursuant to any options, or option, stock purchase, stock ownership or other
employee benefit plans), (ii) this Voting Agreement is the valid and binding
agreement of Holdco and the Company, as the case may be, and (iii) Holdco and
the Company, as the case may be, have not entered into any voting agreements
with any other existing shareholders of the Company prior to or concurrently
with this Voting Agreement.
(b) If Holdco or the Company enters into any agreement with any other
stockholder having a purpose or effect substantially similar to that of this
Voting Agreement on financial or other terms (with respect to such other
stockholder) more favorable than the terms of this Voting Agreement, the
Stockholder will have the right to elect any of the benefits thereof, as they
may be amended or waived from time to time.
15. All notices, requests and other communications to any party
hereunder shall be in writing (including telecopy or similar writing) and shall
be given:
if to Holdco, to:
Thompson Dean
c/o DLJ Merchant Banking II, Inc.
277 Park Avenue
New York, New York 10172
Telecopy: 212-892-7552
if to the Company, to:
Insilco Corporation
425 Metro Place North
5th Floor
Dublin, Ohio 43017
Attention: General Counsel
Telecopy: 614-791-3195
4
<PAGE>
if to the Stockholder, to:
Water Street Corporate Recovery Fund I, L.P.
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Attention: David J. Greenwald, Esq.
Telecopy: 212-357-5505
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto.
16. Capitalized terms not defined herein shall have the meaning ascribed
to them in the Merger Agreement. For purposes of this Voting Agreement,
following consummation of the Reorganization Merger, "COMPANY" means Existing
Sub and "COMPANY COMMON STOCK" means the shares of common stock of Existing Sub
resulting from the Reorganization Merger.
5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Voting Agreement
as of this 24th day of March, 1998.
SILKWORM ACQUISITION
CORPORATION
By: /s/ William F. Dawson, Jr.
____________________________
Name: William F. Dawson, Jr.
Title: Vice President
INSILCO CORPORATION
By: /s/ Robert L. Smialek
____________________________
Name: Robert L. Smialek
Title: Chief Executive Officer
WATER STREET CORPORATE
RECOVERY FUND I, L.P.
By: Goldman, Sachs & Co.,
its General Partner
By: /s/ Terence M. O'Toole
____________________________
Name: Terence M. O'Toole
Title: Managing Director
EXHIBIT 12
Contact:
Leslie G. Thompson
Donaldson, Lufkin & Jenrette
(212) 892-3555
David A. Kauer
Insilco Corporation
(614) 792-0468
For Immediate Release
INSILCO CORPORATION AND DLJ MERCHANT BANKING PARTNERS II ANNOUNCE DEFINITIVE
MERGER AGREEMENT
AGREEMENT PROVIDES FOR A RECAPITALIZATION OF INSILCO
New York, NY, March 24, 1998 - Insilco Corporation (NASDAQ: INSL) and Donaldson,
Lufkin & Jenrette, Inc. (NYSE: DLJ), announced today that Insilco and an
affiliate of DLJ Merchant Banking Partners II (and affiliated funds) have signed
a definitive merger agreement. Upon consummation of certain transactions
contemplated by the agreement, approximately 90 percent of the common stock of
Insilco will become owned by DLJ Merchant Banking Partners II and affiliated
funds and entities.
Under the terms of the agreement, the stockholders of Insilco will receive
consideration of $44.50 per share, consisting of $42.98 in cash and 0.03419
shares of retained stock of the surviving corporation. In aggregate,
stockholders will receive approximately $172.6 million in cash and retain
137,328 shares in the surviving entity. The retained shares will represent
approximately 10 percent of the common stock outstanding post-recapitalization.
The transaction, which is estimated to have a value of approximately $437
million including existing indebtedness to be assumed and/or refinanced, is
subject to terms and conditions customary in transactions of this type,
including approval by Insilco shareholders and expiration of applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and will
be treated as a recapitalization for accounting purposes. Affiliates of
Donaldson, Lufkin & Jenrette Securities Corporation, which acted as financial
advisor to DLJ Merchant Banking Partners II, have committed to provide all debt
financing required for the transaction. Lazard Frieres & Co. LLC and Goldman,
Sachs & Co. acted as financial advisors to Insilco in the transaction.
DLJ Merchant Banking Partners II also announced that it has entered into a
voting agreement in support of the recapitalization with respect to 1,783,878
shares, or approximately 44 percent of the voting stock of Insilco, with Water
Street Corporate Recovery Fund I, L.P., an affiliate of Goldman, Sachs & Co.,
which is Insilco's largest shareholder.
A proxy statement/prospectus with respect to the transaction is expected to be
mailed to shareholders of Insilco in June.
<PAGE>
Robert L. Smialek, Chairman and CEO of Insilco, stated, "This agreement with DLJ
Merchant Banking reflects Insilco's continued commitment to enhancing
shareholder value. Our relationship with DLJ Merchant Banking offers Insilco a
strong financial resource and experienced business partner to support our
aggressive expansion and acquisition plans."
Thompson Dean, Managing Partner of DLJ Merchant Banking Partners II, said, "We
are excited to invest in a company with such attractive growth prospects in each
of its business segments. We look forward to providing management with the
capital to aggressively grow these businesses through both internal investment
and acquisitions."
DLJ Merchant Banking Partners II, a $3 billion fund dedicated to private equity
and equity-related investments, seeks significant capital appreciation through
domestic and international investments in common or preferred stock and debt or
other securities in leveraged acquisitions and corporate joint ventures. Since
its formation in November 1996, DLJ Merchant Banking Partners II has consummated
(or contracted to consummate) 17 transactions valued at over $6 billion, the
largest of which include Ameriserve, DecisionOne, Duane Reade, Thermadyne and
Von Hoffman Press.
Donaldson, Lufkin & Jenrette is a leading integrated investment and merchant
bank serving institutional, corporate, government and individual clients. DLJ's
businesses include securities underwriting; sales and trading; merchant banking;
financial advisory services; investment research; venture capital; correspondent
brokerage services; online, interactive brokerage services; and asset
management. Founded in 1959 and headquartered in New York City, DLJ employs
approximately 7,000 people worldwide and maintains offices in 14 cities in the
United States and 10 cities in Europe, Latin America and Asia. The company's
common stock trades on the New York Stock Exchange under the ticker symbol DLJ.
For more information on Donaldson, Lufkin & Jenrette, refer to the company's
world wide web site at http://www.dlj.com.
Insilco Corporation, based in suburban Columbus Ohio, is a diversified
manufacturer of industrial components and a supplier of specialty publications.
The Company's industrial business units serve the automotive, electronics,
telecommunications and other industrial markets, and its publishing business
serves the school yearbook market.
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