Schedule 14A Information
(Rule 14A-101)
Information Required in Proxy Statement
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X] Soliciting Material Pursuant to Rule 14a-12
International Specialty Products Inc.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it is determined):
N/A
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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November 13, 2002
Dear ISP Employees:
International Specialty Products Inc. ("ISP') announced Friday,
November 8, 2002 that it has signed a merger agreement with International
Specialty Products Holdings Inc. ("ISPH"), a corporation formed by ISP's
chairman and majority stockholder, Samuel J. Heyman. ISP's Board of Directors,
upon the unanimous recommendation of a Special Committee comprised of
directors who are not affiliated with Mr. Heyman and are not officers of ISP,
has determined that the terms and conditions of the merger are fair to ISP's
public stockholders and has approved and declared advisable the adoption of
the merger agreement.
Many of you have approached us with questions regarding how this
transaction may affect ISP's employees. Accordingly, we have compiled a list
of commonly asked questions and answers regarding the transaction.
We hope you find this information useful. We will do our best to
continue to answer your questions as they arise and to provide you with
periodic updates concerning the progress of this important transaction.
Questions and Answers Regarding Going-Private Transaction
Q: BASICALLY, WHAT IS THIS TRANSACTION?
A: In a nutshell, ISP and ISPH have entered into a merger agreement in which
the two will merge in a "going private transaction." As a result of the
merger, the approximately 12.6 million shares of ISP common stock beneficially
owned by ISP stockholders other than Mr. Heyman will be converted into the
right to receive $10.30, per share, in cash. Following the merger, ISP will no
longer have publicly traded common stock.
Q. WHY ARE WE GOING PRIVATE AT THIS TIME?
A: Going private brings certain benefits associated with being a private
company. As a private company, without the constraints of the public market,
and in particular the market's emphasis on quarterly earnings, ISP's
management will have greater flexibility to effectively manage ISP's assets
and to make decisions that may negatively impact quarterly earnings but that
may increase the value of ISP's assets or earnings over the long term. In
addition, going private will also allow ISP to eliminate certain costs and
functions associated with being a public company, including certain legal and
accounting costs, the costs of maintaining a transfer agent and the costs of
investor relations activities. The elimination of the foregoing requirements
will also eliminate the time devoted by employees and members of ISP's
management to those activities, thereby providing more freedom to focus on
ISP's business and operations. In addition, ISP was unable to realize many of
the benefits normally associated with being a public company. For example, the
lack of liquidity of the Company's common stock impaired its use as a tool for
equity-based compensation and acquisitions.
Q: WHAT IMPACT WILL THIS TRANSACTION HAVE ON THE OPERATIONS OF THE COMPANY?
A: This transaction will have no impact on the ability of the Company to fund
its expansion and capital programs. It will be unnecessary for the Company to
borrow money to fund the merger consideration, and the Company has more than
sufficient cash resources to fund that obligation, as well as to continue to
fund new product development, capital expenditures and acquisition
opportunities.
Q: WHAT HAPPENS NOW AND HOW LONG WILL IT BE BEFORE WE KNOW IF THE TRANSACTION
WILL CLOSE?
A: The merger has been approved by our Board of Directors based on the
recommendation of a Special Committee comprised of directors who are not
officers of ISP. In order to finalize the process, both parties must satisfy
certain conditions to closing, including obtaining approval of the merger by
holders of a majority of ISP's outstanding common stock and holders of a
majority of the votes cast by holders of shares not beneficially owned by Mr.
Heyman or the directors or officers of ISP.
While there can be no assurance as to when or whether the necessary
stockholder approvals will be
obtained or when or whether the other conditions to completion of the merger
will be satisfied, we are currently targeting the first quarter of 2003 for the
closing of this transaction.
Q: WHAT WILL HAPPEN TO MY STOCK OPTIONS AS A RESULT OF THE MERGER?
A: As a result of the merger, pursuant to the terms of ISP's option plans, any
options to purchase shares of ISP common stock outstanding at the time of the
merger will be cancelled, whether or not the options are exercisable or
vested. In consideration for the cancellation of your options, following the
merger, you will receive a cash payment with respect to each option equal to
the excess, if any, of $10.30 over the exercise price (to the extent the
exercise price is below $10.30) of the option multiplied by the number of
shares subject to the option on the date of the merger. You will not have to
exercise your options in order to obtain this consideration.
For example, if at the time of the closing of the merger you held an option to
purchase 100 shares of ISP common stock with an exercise price of $5.00 per
share, you would receive a cash payment following the merger equal to $530.00,
less applicable withholding taxes or other charges.
However, if you have any options that will expire prior to the closing of the
merger, you will not receive any cash payment in respect of those expired
options. You will need to exercise those options prior to their expiration.
Q: WHAT WILL HAPPEN TO THE BALANCE IN MY ISP STOCK FUND UNDER THE CAPITAL
ACCUMULATION PLAN?
A: As a result of the merger, in consideration for the cancellation of your
interest in the ISP Stock Fund, you will receive an amount credited to your
individual account under the Capital Accumulation Plan equal to the unit value
based on a share price of $10.30. Information regarding your investment
options for these funds will be forthcoming. After the merger, the ISP Stock
Fund will be eliminated as an investment alternative under the plan.
Q: WHEN WILL YOU HAVE MORE INFORMATION TO SHARE?
A: We are in the process of putting together a proxy statement to be used at a
special meeting of stockholders for voting on the merger. This proxy statement
will contain more information about the merger. In the meantime, although we
will do our best to answer any questions you may have as they arise, we
believe it is important for all of us at ISP to not allow the merger
transaction to distract us from our most important task of focusing on ISP's
business.
Additional Information
In connection with the proposed merger, ISP will file a proxy statement
with the SEC. Investors and security holders are advised to read the proxy
statement when it becomes available, because it will contain important
information. Investors and security holders may obtain a free copy of the
proxy statement (when available) and other documents filed by ISP with the SEC
at the SEC's web site at http://www.sec.gov. Free copies of the proxy
statement, once available, and the company's other filings with the SEC may
also be obtained from ISP by directing a request to ISP Shareholder Relations
Department, 1361 Alps Road, Wayne, New Jersey 07470, Telephone:
1-800-526-5315. ISP, its directors and certain executive officers may be
deemed under the rules of the SEC to be "participants in the solicitation" of
proxies from the security holders of ISP in favor of the transaction.
Information about the directors and executive officers of ISP and their
ownership of ISP common stock is set forth in the proxy statement, dated April
12, 2002, for ISP's 2002 annual meeting of stockholders, as filed with the SEC
on Schedule 14A. Investors and security holders of ISP may obtain additional
information regarding the interests of the "participants in the solicitation"
by reading the proxy statement relating to the transaction when it becomes
available.
This document contains forward looking statements, including, without
limitation, statements relating to ISP's plans, strategies, objectives,
expectations, goals and intentions, which are made in a manner consistent with
the safe harbor provisions of the U.S. Private Securities Litigation Reform
Act of 1995. These forward looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results, performance
or achievements of ISP to be materially different from any future results,
performance or achievements expressed or implied by such forward looking
statements. These factors include: general economic, capital market and
business conditions; risks arising from litigation or similar proceedings; and
the risks and uncertainties inherent in the satisfaction of the closing
conditions to the merger and the consummation of the merger, as well as those
factors discussed in the filings of ISP and its subsidiaries with the
Securities and Exchange Commission, which are incorporated in this press
release by reference. ISP undertakes no obligation, and expressly disclaims
any obligation, to publicly update or revise any forward looking statement,
whether as a result of new information, future events or otherwise.