-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D5ssx4E2ve8DnM/5tpOvIZlf1gsDl7Fbzuzmcd0uQRnpb/TtAPB4s4TACG6sXA/j piAObFQTiZ8ARffqUDECcw== 0000898822-98-000356.txt : 19980325 0000898822-98-000356.hdr.sgml : 19980325 ACCESSION NUMBER: 0000898822-98-000356 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19980324 SROS: NONE GROUP MEMBERS: GOLDMAN SACHS GROUP LP GROUP MEMBERS: GOLDMAN, SACHS & CO. GROUP MEMBERS: THE GOLDMAN SACHS GROUP, L.P. GROUP MEMBERS: WATER STREET CORPORATE RECOVERY FUND I, L.P. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INSILCO CORP/DE/ CENTRAL INDEX KEY: 0000863204 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD FURNITURE [2510] IRS NUMBER: 060635844 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-44625 FILM NUMBER: 98572235 BUSINESS ADDRESS: STREET 1: 425 METRO PL N STE 500 STREET 2: STE 500 CITY: DUBLIN STATE: OH ZIP: 43017 BUSINESS PHONE: 6147920468 MAIL ADDRESS: STREET 1: 425 METRO PLACE NORTH STREET 2: FIFTH FLOOR SUITE 500 CITY: DUBLIN STATE: OH ZIP: 43017 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GOLDMAN SACHS GROUP LP CENTRAL INDEX KEY: 0000904571 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133501777 STATE OF INCORPORATION: NY FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 85 BROAD ST CITY: NEW YORK STATE: NY ZIP: 10004 BUSINESS PHONE: 2129021000 MAIL ADDRESS: STREET 1: 85 BROAD STREET CITY: NEW YORK STATE: NY ZIP: 10004 SC 13D/A 1 SCHEDULE 13D - AMENDMENT NO. 9 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (Amendment No. 9) Insilco Corporation ------------------------------------------------------------------------------ (Name of Issuer) Common Stock (Par Value $.001 Per Share) ------------------------------------------------------------------------------ (Title of Class of Securities) 457659704 ------------------------------------------------------------------------------ (CUSIP Number) David J. Greenwald, Esq. Goldman, Sachs & Co. 85 Broad Street New York, NY 10004 (212) 902-1000 ------------------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 24, 1998 ------------------------------------------------------------------------------ (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 - ------------------- CUSIP NO. 457659704 - ------------------- - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Water Street Corporate Recovery Fund I, L.P. - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS OO; WC - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- Number of 7. SOLE VOTING POWER Shares -0- ------------------------------------------------------------------- Beneficially 8. SHARED VOTING POWER Owned By 1,863,878 ------------------------------------------------------------------- Each 9. SOLE DISPOSITIVE POWER Reporting -0- ------------------------------------------------------------------- Person With 10. SHARED DISPOSITIVE POWER 1,863,878 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,863,878 - ------------------------------------------------------------------------------ 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% - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON PN - ------------------------------------------------------------------------------ PAGE 2 OF 10 - ------------------- CUSIP NO. 457659704 - ------------------- - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The Goldman Sachs Group, L.P. - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS WC - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- Number of 7. SOLE VOTING POWER Shares 334 ------------------------------------------------------------------- Beneficially 8. SHARED VOTING POWER Owned By 1,863,878 ------------------------------------------------------------------- Each 9. SOLE DISPOSITIVE POWER Reporting 334 ------------------------------------------------------------------- Person With 10. SHARED DISPOSITIVE POWER 1,863,878 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,864,212 - ------------------------------------------------------------------------------ 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% - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON HC; PN - ------------------------------------------------------------------------------ PAGE 3 OF 10 PAGES - ------------------- CUSIP NO. 457659704 - ------------------- - ------------------------------------------------------------------------------ 1. NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Goldman, Sachs & Co. - ------------------------------------------------------------------------------ 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ------------------------------------------------------------------------------ 3. SEC USE ONLY - ------------------------------------------------------------------------------ 4. SOURCE OF FUNDS WC - ------------------------------------------------------------------------------ 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [X] - ------------------------------------------------------------------------------ 6. CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- Number of 7. SOLE VOTING POWER Shares -0- ------------------------------------------------------------------- Beneficially 8. SHARED VOTING POWER Owned By 1,863,878 ------------------------------------------------------------------- Each 9. SOLE DISPOSITIVE POWER Reporting -0- ------------------------------------------------------------------- Person With 10. SHARED DISPOSITIVE POWER 1,863,878 - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,863,878 - ------------------------------------------------------------------------------ 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% - ------------------------------------------------------------------------------ 14. TYPE OF REPORTING PERSON BD; PN; IA - ------------------------------------------------------------------------------ PAGE 4 OF 10 PAGES 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 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 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 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 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 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 EX-99 2 EXHIBIT 11 - VOTING AGREEMENT 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. 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 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 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 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 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 EX-99 3 EXHIBIT 12 - PRESS RELEASE 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. 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. -2- -----END PRIVACY-ENHANCED MESSAGE-----