UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.___)*
IPC Information Systems, Inc.
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(NAME OF ISSUER)
Common Stock, par value $0.01 per share
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(TITLE OF CLASS OF SECURITIES)
44980K107
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(CUSIP NUMBER)
Daniel Utevsky, Esq., General Counsel and Secretary
IPC Information Systems, Inc.
Wall Street Plaza, 88 Pine Street,
New York, New York 10005 (212) 825-9060
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(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS)
October 3, 1994
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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-l(b)(3) or (4), check the following box /_/.
Check the following box if a fee is being paid with the statement /X/. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-l(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Exhibit Index at Page 8
(Page 1 of 8 Pages)
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<TABLE>
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SCHEDULE 13D
<S> <C> <C>
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CUSIP No. 44980K107 Page 2 of 8 Pages
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1. NAME OF REPORTING PERSON..............................................................Peter J. Kleinknecht
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON..............................................###-##-####
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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*
PF, 00
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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
United States
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NUMBER 7. SOLE VOTING POWER
OF 2,869,348
SHARES -----------------------------------------------------------------------
BENEFICIALLY 8. SHARED VOTING POWER
OWNED 0
BY -----------------------------------------------------------------------
EACH 9. SOLE DISPOSITIVE POWER
REPORTING 2,854,348
PERSON -----------------------------------------------------------------------
WITH 10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,869,348
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* /X/
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.2%
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14. TYPE OF REPORTING PERSON*
IN
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
(Page 2 of 8 Pages)
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ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to the common stock, par value $.01 per share
("Common Stock"), of IPC Information Systems, Inc., a Delaware corporation
having its principal executive offices at 88 Pine Street, Wall Street Plaza, New
York, New York 10005 (the "Issuer").
ITEM 2. IDENTITY AND BACKGROUND
This Schedule 13D is filed by Peter J. Kleinknecht (the "Reporting
Person"), the Vice Chairman, President and Director of IPC Information Systems,
Inc., 88 Pine Street, Wall Street Plaza, New York, New York 10005.
During the last five years the Reporting Person has not been convicted
in a criminal proceeding (excluding traffic violations or similar misdemeanors),
nor has the Reporting Person been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction which resulted in his being
subject to any judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
The Reporting Person is a citizen of the United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
In October 1991, the Reporting Person together with Richard P.
Kleinknecht, his brother, their respective children and other individuals
acquired all of the shares of stock of the Issuer for $14,548,000, consisting of
$10,000,000 cash and a purchase money note of $4,548,000. The Reporting Person's
individual interest was 34.82%. Richard P. Kleinknecht's individual interest was
34.82%. Each of the three children of the Reporting Person, and each of the
three children of Richard P. Kleinknecht, owned 4.07%, for an aggregate
children's interest of 24.42%. Other individuals owned an aggregate of 7.60%.
The purchase money note was guaranteed by the Reporting Person and Richard P.
Kleinknecht and remains outstanding.
The acquisitions of shares of Common Stock during the past sixty days
(a) by the Reporting Person as custodian for his son, Gavin Kleinknecht, as
described in Item 5, were from the funds of the Reporting Person as custodian
and (b) by Keir Kleinknecht, also the Reporting Person's son, as described in
Item 5, were from the personal funds of such individual. The acquisitions of
shares of Common Stock by Sabrina Kleinknecht, the Reporting Person's daughter
the beneficial ownership of shares of Common Stock of whom is disclaimed by the
Reporting Person, were from the personal funds of such individual.
ITEM 4. PURPOSE OF TRANSACTION
The purpose for which the shares are being held by the Reporting Person
is for investment. The Reporting Person will continuously evaluate the business,
prospects and financial condition of the Issuer, the market for the shares and
the conditions in the economy and the industry in which the Issuer is engaged,
all with a view to determining whether to hold, decrease or add to the
investment in the Issuer, through open market, privately negotiated or any other
share transactions.
(Page 3 of 8 Pages)
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The Reporting Person has no plan or proposal as of the date hereof
which would relate to or result in any transaction, change or event specified in
clauses (a) through (j) of Item 4 of the Schedule 13D form.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Upon consummation of the Issuer's initial public offering of 3,250,000
shares of Common Stock on October 3, 1994 and the issuance on that date of
30,000 shares to an officer of the Issuer, there were 10,536,272 shares of
Common Stock outstanding.
The Reporting Person is currently the beneficial owner of 2,869,348
shares of Common Stock, representing 27.23% of the shares of Common Stock
outstanding on October 3, 1994. This includes (a) 298,075 shares held as
custodian for Mark Kleinknecht, Richard P. Kleinknecht's son, (b) 2,000 shares
held by Keir Kleinknecht, Peter J. Kleinknecht's son, (c) 2,000 shares held as
custodian for Gavin Kleinknecht, the Reporting Person's son and (d) 15,000
shares pursuant to an irrevocable proxy given by Jeffrey M. Gill, chief
operating officer of the Issuer. Richard P. Kleinknecht and the Reporting Person
are brothers.
The Reporting Person disclaims beneficial ownership of 300,075 shares
owned by his daughter, Sabrina Kleinknecht, as well as the option which Sabrina
Kleinknecht holds to purchase 3,000 additional shares. These shares, as well as
the option, are excluded from the shares reported above as beneficially owned by
the Reporting Person.
The Reporting Person has the sole power (a) to vote or to direct the
vote with respect to 2,869,348 shares of Common Stock and (b) to dispose or to
direct the disposition with respect to 2,854,348 shares of Common Stock. The
Reporting Person does not share the power to vote or to direct the vote, or to
dispose or to direct the disposition, of any shares of Common Stock.
During the past sixty days, the Reporting Person has become the
beneficial owner of the following additional shares of Common Stock through the
following transactions:
As custodian for his son, Gavin Kleinknecht, the Reporting
Person acquired 1,000 shares at $15.00 per share from the
Issuer's initial public offering on October 3, 1994 and 1000
shares at $15.75 on October 4, 1994 pursuant to an open market
transaction.
Keir Kleinknecht, also the Reporting Person's son, acquired
1,000 shares at $15.00 per share from the Issuer's initial
public offering on October 3, 1994 and 1000 shares at $15.75
on October 4, 1994 pursuant to an open market transaction.
The Reporting Person's daughter, Sabrina Kleinknecht, acquired 2,000
shares at $15.75 on October 4, 1994 pursuant to an open market transaction. The
Reporting Person disclaims beneficial ownership of these 2,000 shares acquired
by his daughter.
(Page 4 of 8 Pages)
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER
The Reporting Person, for himself and as custodian for Mark
Kleinknecht, has agreed with Smith Barney Inc., Kidder, Peabody & Co.
Incorporated and Prudential Securities Incorporated, the managing underwriters
of the Issuer's initial public offering, not to sell, offer to sell, solicit an
offer to buy, contract to sell, grant any option to purchase or otherwise
transfer or dispose of, any shares of Common Stock for a period of 180 days from
September 26, 1994, without the prior written consent of Smith Barney Inc.
Pursuant to a Pledge Agreement dated April 28, 1994 (the "Pledge
Agreement") made by the Reporting Person and Richard P. Kleinknecht jointly and
severally to Citibank N.A. ("Citibank") and National Westminster Bank NJ
("NatWest") (collectively, the "Banks"), shares of Common Stock of the Issuer
owned by the Reporting Person and his brother, Richard P. Kleinknecht, in an
amount equal to 15 % of the outstanding shares of Common Stock, are subject to a
first priority security interest given the Banks to secure certain debt of the
Reporting Person and Richard P. Kleinknecht and certain companies controlled by
them. The Reporting Person has satisfied one-half of this security interest
obligation.
The Reporting Person and Richard P. Kleinknecht together with a company
controlled by them are guarantors (the "Guarantors") of a Credit Agreement
Modification and Extension Agreement dated as of April 28, 1994 (the
"Modification Agreement") by and among Kleinknecht Electric Company, Inc. (a New
York corporation formerly George Kleinknecht, Inc.) ("KEC"), Kleinknecht
Electric Company, Inc. (a New Jersey corporation formerly GK Telecommunications
Inc.) ("GKT" and collectively with KEC, the "Borrowers"), the Guarantors and the
Banks. The Modification Agreement consists of the extension and modification of
various notes previously executed by the Borrowers. These notes consisted of (a)
a note dated May 18, 1993 made by the Borrowers to Citibank in an aggregate
principal amount of $2,848,000 and (b) a note dated May 18, 1993 made by GKT to
NatWest in the original principal amount of $5,902,000. As modified by the
Modification Agreement, the Borrowers are obligated to repay $5,832,467 to the
Banks. The Reporting Person and Richard P. Kleinknecht are also guarantors of a
certain real estate loan from Citibank in the original principal amount of
$4,125,000 which had an unpaid principal balance of $3,900,000 as of April 28,
1994; and borrowers of a certain mortgage loan from NatWest in the original
principal amount of $2,000,000 which had an unpaid principal balance of
$1,458,333.95 as of April 28, 1994 ("NatWest Mortgage Loan"). Amounts due under
the Modification Agreement and the real estate loans are collectively referred
to as the "Obligations".
The NatWest Mortgage Loan is payable in installments at a rate of 2.5%
over NatWest's Prime Rate and is due on April 1, 1999. All of the other
Obligations are payable in installments at a rate of 2.5% over the base rate
announced publicly by Citibank from time to time and are due on January 31,
1995. All of the Obligations are current. The aggregate unpaid principal balance
of the Obligations as of October 12, 1994 was approximately $7,654,000.
Pursuant to an agreement between the Reporting Person and Richard P.
Kleinknecht (the "Principal Stockholders") and the Issuer, the Principal
Stockholders are entitled to certain rights with respect to the registration of
shares of Common Stock held by the Reporting Person under the Securities Act of
1933, as amended (the "Act"). If the Issuer proposes to register any of its
securities under the Act, either for its own account or for the account of other
security holders, the Principal Stockholders are entitled to notice of the
registration and are entitled to include, at the Issuer's expense, such shares
therein, provided, among other conditions, that the underwriters of any offering
have the right to limit the number of such shares included in the registration.
In addition, the Principal Stockholders may require
(Page 5 of 8 Pages)
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the Issuer, beginning six months after September 26, 1994, on not more than four
occasions, to file a registration statement under the Act, at the Issuer's
expense, with respect to their shares of Common Stock, and the Issuer is
required to use its best efforts to effect the registration, subject to certain
conditions and limitations. Further, the Principal Stockholders may require the
Issuer on three occasions, at the Issuer's expense, to register their shares on
Form S-3 when such form becomes available to the Issuer, subject to certain
conditions and limitations.
The Reporting Person holds an irrevocable proxy from Jeffrey M. Gill,
the Issuer's chief operating officer, with respect to one-half of all shares of
Common Stock acquired by Mr. Gill pursuant to the terms of his employment
agreement with the Issuer. This proxy currently applies to one-half of the
30,000 shares acquired by Mr. Gill upon consummation of the Issuer's initial
public offering on October 3, 1994. Under his employment agreement, Mr. Gill
could acquire a maximum of 159,285 additional shares of Common Stock in five
annual installments of 31,857 each on the last day of the Issuer's fiscal years
ending in 1995, 1996, 1997, 1998 and 1999, provided that Mr. Gill is then in the
Issuer's employ. If such shares are acquired by Mr. Gill, the irrevocable proxy
would permit the Reporting Person to vote one-half such shares for the duration
of Mr. Gill's employment under his employment agreement with the Issuer.
ITEM 7. MATERIAL FILED AS EXHIBITS
The following documents are filed as Exhibits to this Schedule 13D:
EXHIBIT DESCRIPTION
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A Lock-up Letter Agreements (2) dated April 26, 1994
with Smith Barney Inc., Kidder, Peabody & Co.
Incorporated and Prudential Securities Incorporated.
B Pledge Agreement dated April 28, 1994 with Citibank,
N.A. and National Westminster Bank NJ and a letter
dated May 4, 1994 from Gubman Sitomar Goldstein &
Edletz P.C. to Leichner Ellman & Krause.
C Jeffrey M. Gill irrevocable proxy dated as of August
29, 1994.
D Registration Rights Agreement dated as of May 9, 1994
between the Issuer and Richard P. Kleinknecht and
Peter J. Kleinknecht.
(Page 6 of 8 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.
Date: October 12, 1994 /s/ Peter J. Kleinknecht
-------------------------------
Peter J. Kleinknecht
(Page 7 of 8 Pages)
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EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE NO.
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A Lock-up Letter Agreements (2) dated April 26, 1994 9
with Smith Barney Inc., Kidder, Peabody & Co.
Incorporated and Prudential Securities Incorporated.
B Pledge Agreement dated April 28, 1994 with Citibank, 12
N.A. and National Westminster Bank NJ and a letter
dated May 4, 1994 from Gubman Sitomar Goldstein &
Edletz P.C. to Leichner Ellman & Krause.
C Jeffrey M. Gill irrevocable proxy dated as of August 29, 35
1994.
D Registration Rights Agreement dated as of May 9, 1994 36
between the Issuer and Richard P. Kleinknecht and Peter
J. Kleinknecht.
(Page 8 of 8 Pages)
