Edgar Filing: INTERNATIONAL SPECIALTY PRODUCTS INC /NEW/

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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AMENDMENT NO. 3 TO
SCHEDULE 13E-3

RULE 13E-3 TRANSACTION STATEMENT
UNDER SECTION 13(E) OF THE SECURITIES EXCHANGE ACT OF 1934

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INTERNATIONAL SPECIALTY PRODUCTS INC.
(NAME OF THE ISSUER)
INTERNATIONAL SPECIALTY PRODUCTS INC.
SAMUEL J. HEYMAN
INTERNATIONAL SPECIALTY PRODUCTS HOLDINGS INC.
(NAME OF PERSONS FILING STATEMENT)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
460337108

(CUSIP Number of Class of Securities)

-----------------------

RICHARD A. WEINBERG, ESQ.
C/O ISP MANAGEMENT COMPANY, INC.
1361 ALPS ROAD
WAYNE, NEW JERSEY 07470
TELEPHONE (973) 628-4000

(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO RECEIVE
NOTICE AND COMMUNICATIONS ON BEHALF OF PERSONS FILING STATEMENT)

This statement is filed in connection with (check the appropriate box):

a. [X] The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C or Rule
13e-3(c) under the Securities Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act
of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.

Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies: [X]

Check the following box if the filing is a final amendment reporting
the results of the transaction: [ ]

CALCULATION OF FILING FEE

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Transaction Valuation* Amount of Filing Fee**
---------------------- ----------------------
$134,360,564 $26,873
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* The transaction valuation was based upon the sum of (i) the product of
12,810,336 shares of Common Stock, par value $0.01 per share, of
International Specialty Products Inc., a Delaware corporation, at a price
of $10.30 per share in cash and (ii) a cash-out of 1,700,156 shares of
Common Stock covered by outstanding options at a cost of $2,414,103.

** The amount of the filing fee, calculated in accordance with Rule 0-11(b) of
the Securities Exchange Act of 1934, equals 1/50th of 1% of the transaction
valuation.

[X] Check the box if any part of the fee is offset as provided by Rule 0-11(a)
(2) of the Securities Exchange Act of 1934 and identify the filing with
which the offsetting fee was previously paid. Identify the previous filing
by registration statement number, or the Form or Schedule and the date of
its filing.

Amount Previously Paid: $26,873 Filing Party: International Specialty Products
Inc. Form or Registration No.: Schedule l4A Date Filed: November 27, 2002

INTRODUCTION

This Amendment No. 3 to the Rule 13e-3 Transaction Statement on
Schedule 13E-3 (the "Schedule 13E-3") is being filed by (i) International
Specialty Products Inc., a Delaware corporation ("ISP"), the issuer of the
equity securities that are the subject of the Rule 13e-3 transaction, (ii)
Samuel J. Heyman, a natural person and beneficial owner of approximately 81% of
ISP's common stock ("Mr. Heyman") and (iii) International Specialty Products
Holdings Inc., a Delaware Corporation ("ISPH"), in connection with the merger of
ISPH with and into ISP (the "Merger"), with ISP as the surviving corporation. As
a result of the proposed Merger, (i) ISP will cease to be a publicly held
company and will become a private corporation, all the stock of which will be
beneficially owned by Mr. Heyman and (ii) each issued and outstanding share of
ISP common stock will be converted into the right to receive $10.30 in cash,
except shares beneficially owned by Mr. Heyman or by any holder who properly
demands appraisal rights under the General Corporation Law of the State of
Delaware will be cancelled. Notwithstanding this arrangement, shares owned by a
qualified charitable organization, will be entitled to receive $10.30 in cash.

Concurrently with the filing of this Schedule l3E-3, ISP is filing
Amendment No. 3 to a preliminary proxy statement (the "Proxy Statement")
pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), pursuant to which the ISP board of directors is soliciting
proxies from stockholders of ISP in connection with the Merger. The information
in the Proxy Statement, including all annexes and exhibits thereto, is expressly
incorporated by reference herein in its entirety and responses to each item
herein are qualified in their entirety by the information contained in the Proxy
Statement and the annexes and exhibits thereto. Capitalized terms used but not
defined herein shall have the meanings ascribed to such terms in the Proxy
Statement.

ITEM 1. SUMMARY TERM SHEET

Regulation M-A

The information set forth in the Proxy Statement under
the caption "Summary Term Item 1001 Sheet" is
incorporated herein by reference.

ITEM 2. SUBJECT COMPANY INFORMATION

Regulation M-A
Item 1002

(a) NAME AND ADDRESS. The information set forth in the
Proxy Statement under the caption "Summary Term Sheet
- Information About ISP, Mr. Heyman and ISPH" is
incorporated herein by reference.

(b) SECURITIES. The information set forth in the Proxy
Statement under the captions "Summary Term Sheet - The
Special Meeting" and "The Special Meeting-Record Date"
is incorporated herein by reference.

(c) TRADING MARKET AND PRICE. The information set forth in
the Proxy Statement under the caption "Summary Term
Sheet - Trading Market and Price; Dividends" is
incorporated herein by reference.

(d) DIVIDENDS. The information set forth in the Proxy
Statement under the caption "Summary Term Sheet -
Trading Marking and Price; Dividends" is incorporated
herein by reference.

(e)-(f) PRIOR PUBLIC OFFERINGS; PRIOR STOCK PURCHASES. The
information set forth in the Proxy Statement under the
caption "Other Matters - Transactions in Capital Stock
by Certain Persons" is incorporated herein by
reference.

ITEM 3. IDENTITY AND BACKGROUND OF THE FILING PERSON

Regulation M-A
Item 1003

(a)-(c) NAME AND ADDRESS; BUSINESS AND BACKGROUND OF ENTITIES;
BUSINESS AND BACKGROUND OF NATURAL PERSONS. The
information set forth in the Proxy Statement under the
captions "Summary Term Sheet -Information About ISP,
Mr. Heyman and ISPH" and "Special Factors - Background
of the Merger" is incorporated herein by reference.
During the last five years, none of the filing persons
has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or has
been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction
resulting in a judgment, decree or final order
enjoining further violations of, or prohibiting or
mandating activities subject to, federal or state
securities laws, or a finding of any violations of
such laws.

DIRECTORS AND EXECUTIVE OFFICERS OF ISP. The table
below sets forth for each of the directors and
executive officers of ISP their respective present
principal occupation or employment, the name and
principal business of the corporation or other
organization in which such occupation or employment is
conducted and the five-year employment history of each
such director and executive officer. Each person
identified below is a United States citizen, unless
otherwise noted. Unless indicated otherwise, each
person's principal address is c/o ISP, 1361 Alps Road,
Wayne, New Jersey 07470.

PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND MATERIAL
POSITIONS HELD DURING THE PAST
NAME FIVE YEARS
-------------------------- ----------------------------------------------

Samuel J. Heyman Mr. Heyman has been a director and Chairman of
the Board of ISP since its formation and
Chairman of the Board and director of one of
its subsidiaries since December 2001. He was
Chief Executive Officer of ISP and some of its
subsidiaries from their formation to June 1999.
Mr. Heyman also has been a director of G-I
Holdings Inc. for more than five years and was
President and Chief Executive Officer of G-I
Holdings and some of its subsidiaries for more
than five years until September 2000. In
January 2001, G-I Holdings filed a voluntary
petition for reorganization under Chapter 11 of
the U.S. Bankruptcy Code due to its
asbestos-related claims. Mr. Heyman was a
director and Chairman of the Board of Building
Materials Corporation of America ("BMCA") from
its formation to September 2000 and served as
Chief Executive Officer of BMCA and some of its
subsidiaries from June 1999 to September 2000
and from June 1996 to January 1999. He is also
the Chief Executive Officer, Manager and
General Partner of a number of closely held
real estate development companies and
partnerships whose investments include
commercial real estate and a

portfolio of publicly traded securities. Mr.
Heyman has served as a director of Hercules
Incorporated, a global manufacturer and
marketer of specialty chemicals, since May
2001.

Sunil Kumar Mr. Kumar has been a director, President and
Chief Executive Officer of ISP since June 1999
and a director, President and Chief Executive
Officer of some of its subsidiaries since June
2001 and June 1999, respectively. Mr. Kumar was
a director, President and Chief Executive
Officer of BMCA and some of its subsidiaries
from May 1995, July 1996 and January 1999,
respectively, to June 1999. He also was Chief
Operating Officer of BMCA and some of its
subsidiaries from March 1996 to January 1999.
He also was a director and Vice-Chairman of the
Board of G-I Holdings from January 1999 to June
1999. In January 2001, G-I Holdings filed a
voluntary petition for reorganization under
Chapter 11 of the U.S. Bankruptcy Code due to
its asbestos-related claims. Mr. Kumar has
served as a director of Hercules Incorporated,
a global manufacturer and marketer of specialty
chemicals, since May 2001.

Robert Englander Mr. Englander has been a director of ISP since
April 2001. He has been the Chairman of the
Board and Chief Executive Officer of Belvoir
Publications, a publisher of magazines, books
and newsletters, since February 1973. Belvoir
Publications has a business address of 970 Park
Avenue, Penthouse North, New York, New York
10028.

Sanford Kaplan Mr. Kaplan has been a director of ISP since
November 1992. He has been a private investor
and consultant since 1977 with a business
address of 10128 Empyrean Way, #303, Los
Angeles, California 90067.

Burt Manning Mr. Manning has been a director of ISP since
November 1992. He has been President of
Brookbound, Inc., a strategic consulting
company since December 1997. He was Chairman of
J. Walter Thompson Company, a multinational
advertising company, from July 1987 to December
1997 and has served as Chairman Emeritus of
such company since January 1998. Mr. Manning
has been a director of Friendly Ice Cream
Corporation since November 1997 with a business
address of 655 Park Avenue, Apartment 8E, New
York, New York 10021.

Alan M. Meckler Mr. Meckler has been a director of ISP since
April 2001. He has been the Chairman and Chief
Executive Officer of Jupitermedia Group, Inc.,
a provider of global real-time news and
information resources for the internet
industry, since December 1998. He was Chairman
and Chief Executive Officer of Mecklermedia
Corp., a provider of internet information, from
June 1971 to November 1998. Jupitermedia Group
has a business address of 23 Old Kings Highway
South, Darien, Connecticut 06820.

Richard A. Weinberg Mr. Weinberg has been the Executive Vice
President, General Counsel and Secretary of ISP
and its subsidiaries since May 1998 and was
Senior Vice President, General Counsel and
Secretary of ISP and its subsidiaries from May
1996 to May 1998. He has also been serving as a
director of various ISP subsidiaries since
February 2002, December 2001 and May 1996. Mr.
Weinberg has been President, Chief Executive
Officer, General Counsel and Secretary of G-I
Holdings since September 2000 and was Executive
Vice President, General Counsel and Secretary
of G-I Holdings from May 1998 to September
2000. He also was Senior Vice President,
General Counsel and Secretary of these
corporations from May 1996 to May 1998. Mr.
Weinberg has served as a director of G-I
Holdings since May 1996. In January 2001, G-I
Holdings filed a voluntary petition for
reorganization under Chapter 11 of the U.S.
Bankruptcy Code due to its asbestos-related
claims. Mr. Weinberg also has been Executive
Vice President, General Counsel and Secretary
of BMCA and its subsidiaries since May 1998,
and was Senior Vice President, General Counsel
and Secretary of BMCA and its subsidiaries from
May 1996 to May 1998.

Susan B. Yoss Ms. Yoss has been the Executive Vice
President-- Finance and Treasurer of ISP and
most of its subsidiaries since September 2000.
She was Senior Vice President and Treasurer of
ISP and most of its subsidiaries from July 1999
to September 2000 and was Vice President and
Treasurer of ISP and most of its subsidiaries
from February 1998 to June 1999. She also has
been Senior Vice President of BMCA and its
subsidiaries since August 2001, was Senior Vice
President and Treasurer of the same companies
from July 1999 to August 2001 and was Vice
President and Treasurer of the same companies
from February 1998 to July 1999. Ms. Yoss also
has served as Senior Vice President, Chief

Financial Officer and Treasurer of G-I Holdings
since July 1999. In January 2001, G-I Holdings
filed a voluntary petition for organization
under Chapter 11 of the U.S. Bankruptcy Code
due to its asbestos-related claims. She was
Assistant Treasurer of Joseph E. Seagram &
Sons, Inc., a global beverage and entertainment
company for more than five years until February
1998.

Roger J. Cope Mr. Cope has been Senior Vice President--Sales
and Commercial Director--Europe of ISP and most
of its subsidiaries since July 1999 and was a
director of one of its subsidiaries from June
2001 until September 2002. He was Senior Vice
President, Pharmaceutical, Agricultural and
Beverage Group of ISP and some of its
subsidiaries from July 1998 to July 1999 and
Vice President, Asia-Pacific Region of the same
corporations from March 1997 to July 1998. Mr.
Cope is a citizen of the United Kingdom.

Neal E. Murphy Mr. Murphy has been Senior Vice President and
Chief Financial Officer of ISP and its
subsidiaries since February 2002 and a director
of one of its subsidiaries since February 2002.
Prior to joining ISP, he was President of PQ
Europe, a global developer and producer of
silica-based specialty chemicals, inorganic
chemicals and performance particles from August
1999 to September 2001 and Vice President and
Chief Financial Officer of PQ Corporation, the
parent of PQ Europe, from May 1995 until July
1999.

Stephen R. Olsen Mr. Olsen has been Senior Vice President--Marketing
and Corporate Development of ISP and some of
its subsidiaries since June 2002. He was Senior
Vice President--Corporate Development and
Strategy of ISP and some of its subsidiaries,
from September 2000 until June 2002 and was a
director of some of its subsidiaries from June
2001 until September 2002. He was President and
Chief Operating Officer of LL Building Products
Inc., one of BMCA's subsidiaries, from June
1999 to September 2000. He was Vice President,
Corporate Development and Vice President and
General Manager, Accessories and Specialty
Products, of BMCA from May 1997 to October
1998.

Steven E. Post Mr. Post has been Senior Vice President--Operations
for Specialty Chemicals of ISP since June 2001
and was a director of one of its subsidiaries
from June 2001 until September 2002. He has
been President of ISP Alginates Inc. since
October 1999. He was employed as President of
Monsanto Company's Kelco Alginates division
from January 1999 to October 1999. He served as
Vice President and General Manager, Alginates
of Monsanto Company from December 1997 to
January 1999.

Lawrence Grenner Mr. Grenner has been Senior Vice President--R&D,
Latin America of ISP since May 2002. He was
previously Senior Vice President--Marketing and
Product Development of ISP and some of its
subsidiaries from June 2000 until May 2002. He
was Vice President and Business Unit Director,
Skin Care of ISP and some of its subsidiaries
from January 1999 to June 2000 and Vice
President, Marketing-Personal Care of ISP and
some of its subsidiaries from January 1997 to
January 1999.

To the knowledge of ISP, during the last five years, none of the foregoing
directors or executive officers has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
resulting in a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws,
or a finding of any violations of such laws.

DIRECTORS AND EXECUTIVE OFFICERS OF ISPH. Mr. Heyman is the sole beneficial owner
of ISPH common stock. The table below sets forth for each of the executive
officers of ISPH their respective present principal occupation or employment,
their principal address, the name and principal business of the corporation or
other organization in which such occupation or employment is conducted and the
five-year employment history of each such executive officer.

PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND MATERIAL
POSITIONS HELD DURING THE PAST
NAME FIVE YEARS
-------------------------- -----------------------------------------------

Samuel J. Heyman Mr. Heyman is a director of ISPH. Please also
see "Directors and Officers of ISP."

Sunil Kumar Mr. Kumar is President, Chief Executive Officer
and a director of ISPH. Please also see
"Directors and Officers of ISP."

PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND MATERIAL
POSITIONS HELD DURING THE PAST
NAME FIVE YEARS
-------------------------- --------------------------------------------------

Richard A. Weinberg Mr. Weinberg is an Executive Vice President,
General Counsel and Secretary of ISPH. Please
also see "Directors and Officers of ISP."

Susan B. Yoss Ms. Yoss is the Executive Vice President--Finance
and Treasurer of ISPH. Please also see
"Directors and Officers of ISP."

To the knowledge of ISPH, during the last five years, none of the foregoing
directors or executive officers has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or has been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
resulting in a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws,
or a finding of any violations of such laws.

ITEM 4. TERMS OF THE TRANSACTION

Regulation M-A
Item 1004

(a) (1) TENDER OFFERS. Not applicable.

(a) (2) (i) TRANSACTION DESCRIPTION. The information set forth in
the Proxy Statement under the caption "Summary Term
Sheet" is incorporated herein by reference.

(a) (2) (ii) CONSIDERATION. The information set forth in the Proxy
Statement under the captions "Summary Term Sheet -
What You Will Be Entitled to Receive in The Merger,"
"Summary Term Sheet - Our Position as to the Fairness
of the Merger," "Special Factors - Recommendation of
the Special Committee," "Special Factors -
Recommendations of our Board of Directors," "Special
Factors - Special Committee's Position as to Fairness
of the Merger," "Special Factors - Mr. Heyman and
ISPH's Positions as to the Fairness of the Merger" and
"The Merger - Payment of Merger Consideration and
Surrender of Stock Certificates" is incorporated
herein by reference.

(a) (2) (iii) REASONS FOR TRANSACTION. The information set forth in
the Proxy Statement under the captions "Summary Term
Sheet - Recommendation of Special Committee and our
Board of Directors," "Summary Term Sheet - Our
Position as to the Fairness of the Merger," "Summary
Term Sheet - Mr. Heyman and ISPH's Position as to the
Fairness of the Merger," "Special Factors -
Recommendation of the Special Committee," "Special
Factors - Recommendations of our Board of Directors,"
"Special Factors - Special Committee's Position as to
Fairness of the Merger," "Special Factors - Mr. Heyman
and ISPH's Positions as to the Fairness of the Merger"
and "Special Factors - Reasons for the Merger; Purpose
and Structure of the Merger" is incorporated herein by
reference.

(a) (2) (iv) VOTE REQUIRED FOR APPROVAL. The information set forth
in the Proxy Statement under the captions "Summary
Term Sheet - The Special Meeting," "Summary Term Sheet
- The Merger Agreement," "The Special Meeting - Voting
Rights; Vote Required for Approval" and "The Merger -
Merger Agreement" is incorporated herein by reference.

(a) (2) (v) DIFFERENCES IN THE RIGHTS OF SECURITY HOLDERS. The
information set forth in the Proxy Statement under the
captions "Summary Term Sheet - What You Will Be
Entitled to Receive in the Merger," "Special Factors -
Effects of the Merger; Plans or Proposals After the
Merger" and "The Merger - Payment of Merger
Consideration and Surrender of Stock Certificates" is
incorporated herein by reference.

(a) (2) (vi) ACCOUNTING TREATMENT. The information set forth in
Proxy Statements under the caption "The Merger -
Accounting Treatment" is incorporated herein by
reference.

(a) (2) (vii) INCOME TAX CONSEQUENCES. The information set forth in
the Proxy Statement under the captions "Summary Term
Sheet - Material U.S. Federal Income Tax Consequences"
and "Special Factors - Material U.S. Federal Income
Tax Consequences of the Merger to our Stockholders" is
incorporated herein by reference.

(c) DIFFERENT TERMS. The information set forth in the
Proxy Statement under the captions "Summary Term Sheet
- What You Will Be Entitled to Receive in the Merger"
and "The Merger - Payment of Merger Consideration and
Surrender of Stock Certificates" is incorporated
herein by reference.

(d) APPRAISAL RIGHTS. The information set forth in the
Proxy Statement under the captions "Summary Term Sheet
- Appraisal Rights " and "The Merger - Appraisal
Rights" is incorporated herein by reference.

(e) PROVISIONS FOR UNAFFILIATED SECURITY HOLDERS. None.

(f) ELIGIBILITY FOR LISTING OR TRADING. Not applicable.

ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND
AGREEMENTS

Regulation M-A
Item 1005

(a) (1) TRANSACTIONS WITH ISP. The information set forth in
the Proxy Statement under the captions "Special
Factors - Specified Relationships between ISP and Mr.
Heyman" and "Other Matters - Transactions in Capital
Stock by Certain Persons" is incorporated herein by
reference.

(a) (2) TRANSACTIONS WITH OFFICERS, DIRECTORS AND AFFILIATES
OF ISP. The information set forth in the Proxy
Statement under the captions "Summary Term Sheet -
Interests of Directors and Executive Officers in the
Merger," and "Special Factors - Interests of Directors
and Executive Officers in the Merger," "Other Matters
- Transactions in Capital Stock by Certain Persons"
and "Other Matters - Certain Transactions" is
incorporated herein by reference.

(b) - (c) SIGNIFICANT CORPORATE EVENTS; NEGOTIATIONS OR
CONTRACTS. The information set forth in the Proxy
Statement under the captions "Special Factors -
Background of the Merger," "Special Factors -
Interests of Directors and Executive Officers in the
Merger" and "Other Matters - Certain Transactions" is
incorporated herein by reference.

(e) AGREEMENTS INVOLVING THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Proxy Statement under
the captions "Summary Term Sheet - Interests of
Directors and Executive Officers in the Merger,"
"Special Factors - Background of the Merger," "Special
Factors - Interests of Directors and Executive
Officers in the Merger," "The Special Meeting - Voting
Rights; Vote Required for Approval" and "Other Matters
- Certain Transactions" is incorporated herein by
reference. The information set forth in Exhibits
(d)(1) and (d)(2) is incorporated herein by reference.

ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS

Regulation M-A
Item 1006

(b) USE OF SECURITIES ACQUIRED. The information set forth
in the Proxy Statement under the captions "Special
Factors - Reasons for the Merger; Purpose and
Structure of the Merger" and "Special Factors -
Effects of the Merger; Plans or Proposals After the
Merger" is incorporated herein by reference.

(c) (1 -(8) PLANS. The information set forth in the Proxy
Statement under the captions "Summary Term Sheet - The
Merger," "Summary Term Sheet - Interests of Directors
and Executive Officers in the Merger," "Summary Term
Sheet - The Merger Agreement," "Special Factors -
Background of the Merger," "Special Factors - Effects
of the Merger; Plans or Proposals After the Merger,"
"Special Factors - Interests of Directors and
Executive Officers in the Merger" and "Other Matters -
Certain Transactions" is incorporated herein by
reference.

ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS

Regulation M-A
Item 1013 (a) PURPOSES. The information set forth in the Proxy
Statement under the captions "Special Factors -
Recommendations of the Special Committee," "Special
Factors - Recommendations of our Board of Directors,"
"Special Factors - Background of the Merger" and
"Special Factors - Reasons for the Merger; Purpose and
Structure of the Merger" is incorporated herein by
reference.

(b) ALTERNATIVES. The information set forth in the Proxy
Statement under the captions "Special Factors -
Background of the Merger," "Special Factors -
Recommendations of the Special Committee," "Special
Factors - Recommendations of our Board of Directors"
and "Special Factors - Reasons for the Merger; Purpose
and Structure of the Merger" is incorporated herein by
reference.

(c) REASONS. The information set forth in the Proxy
Statement under the captions "Summary Term Sheet -
Opinion of Lehman Brothers Inc.," "Summary Term Sheet
- Our Position as to the Fairness of the Merger,"
"Summary Term Sheet - Mr. Heyman and ISPH's Position
as to the Fairness of the Merger," "Special Factors -
Background of the Merger," "Special Factors - Special
Committee's Position as to Fairness of the Merger,"
"Special Factors - Mr. Heyman and ISPH's Positions as
to the Fairness of the Merger," "Special Factors -
Opinion of Lehman Brothers" and "Special Factors -
Reasons for the Merger; Purpose and Structure of the
Merger" is incorporated herein by reference.

(d) EFFECTS. The information set forth in the Proxy
Statement under the captions "Summary Term Sheet -
What You Will Be Entitled to Receive in the Merger,"
"Summary Term Sheet - Opinion of Lehman Brothers
Inc.," "Summary Term Sheet - Interests of Directors
and Executive Officers in the Merger," "Summary Term
Sheet - Material U.S. Federal Income Tax
Consequences," "Summary Term Sheet - Appraisal
Rights," "Special Factors - Background of the Merger,"
"Special Factors - Opinion of Lehman Brothers,"
"Special Factors - Reasons for the Merger; Purpose and
Structure of the Merger," "Special Factors - Effects
of the Merger; Plans or Proposals After the Merger,"
"Special Factors - Material U.S. Federal Income Tax
Consequences of the Merger to our Stockholders,"
"Special Factors - Litigation," "The Merger - Payment
of Merger Consideration and Surrender of Stock
Certificates," "The Merger - Appraisal Rights" and
"The Merger - The Merger Agreement" is incorporated
herein by reference.

ITEM 8. FAIRNESS OF THE TRANSACTION

Regulation M-A
Item 1014

(a) - (b) FAIRNESS; FACTORS CONSIDERED IN DETERMINING FAIRNESS.
The information set forth in the Proxy Statement under
the captions "Summary Term Sheet - Recommendations of
the Special Committee and our Board of Directors,"
"Summary Term Sheet - Opinion of Lehman Brothers
Inc.," "Summary Term Sheet - Our Position as to the
Fairness of the Merger," "Summary Term Sheet - Mr.
Heyman and ISPH's Position as to the Fairness of the
Merger," "Special Factors - Background of the Merger,"
"Special Factors - Recommendations of the Special
Committee," "Special Factors - Recommendations of our
Board of Directors," "Special Factors - Special
Committee's Position as to Fairness of the Merger,"
"Special Factors - Mr. Heyman and ISPH's Positions as
to the Fairness of the Merger," "Special Factors -
Opinion of Lehman Brothers," "Special Factors - ISP's
Forecasts" and "Special Factors - Reasons for the
Merger; Purpose and Structure of the Merger" is
incorporated herein by reference.

(c) APPROVAL OF SECURITY HOLDERS. The information set
forth in the Proxy Statement under the captions
"Summary Term Sheet - The Special Meeting," "Summary
Term Sheet - The Merger Agreement," "Special Factors -
Mr. Heyman and ISPH's Positions as to the Fairness of
the Merger," "The Special Meeting - Voting Rights;
Vote Required for Approval" and "The Merger - The
Merger Agreement" is incorporated herein by reference.

(d) UNAFFILIATED REPRESENTATIVE. The information set forth
in the Proxy Statement under the captions "Summary
Term Sheet - Recommendations of the Special Committee
and our Board of Directors," "Summary Term Sheet - Our
Position as to the Fairness of the Merger," "Summary
Term Sheet - Mr. Heyman and ISPH's Position as to the
Fairness of the Merger," "Special Factors - Background
of the Merger," "Special Factors - Recommendation of
the Special Committee," "Special Factors -
Recommendations of our Board of Directors," "Special
Factors - Special Committee's Position as to Fairness
of the Merger," "Special Factors - Mr. Heyman and
ISPH's Positions as to Fairness of the Merger" and
"Special Factors - Reasons for the Merger; Purpose and
Structure of the Merger" is incorporated herein by
reference.

(e) APPROVAL OF DIRECTORS. The information set forth in
the Proxy Statement under the captions "Summary Term
Sheet - Recommendations of the Special Committee and
our Board of Directors," "Summary Term Sheet - Our
Position as to the Fairness of the Merger," "Summary
Term Sheet - Mr. Heyman and ISPH's Position as to the
Fairness of the Merger," "Special Factors - Background
of the Merger," "Special Factors - Recommendations of
the Special Committee," "Special Factors -
Recommendations of our Board of Directors" and
"Special Factors - Mr. Heyman and ISPH's Positions as
to the Fairness of Merger" is incorporated herein by
reference.

(f) OTHER OFFERS. Not applicable.

ITEM 9. REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS

Regulation M-A
Item 1015

(a) - (c) REPORT, OPINION OR APPRAISAL; PREPARER AND SUMMARY OF
THE REPORT, OPINION OR APPRAISAL; AVAILABILITY OF
DOCUMENTS. The information set forth in the Proxy
Statement under the captions "Summary Term Sheet -
Opinion of Lehman Brothers Inc.," "Summary Term Sheet
- Our Position as to the Fairness of the Merger,"
"Special Factors - Background of the Merger," "Special
Factors - Opinion of Lehman Brothers," "Special
Factors -Special Committee's Position as to Fairness
of the Merger," "Special Factors - Mr. Heyman and
ISPH's Positions as to the Fairness of the Merger,"
"Special Factors - ISP's Forecasts" and "Special
Factors - Mr. Heyman and ISPH's Positions as to the
Fairness of the Merger," is incorporated herein by
reference. The full text of the written opinion of
Lehman Brothers Inc., dated November 8, 2002, is
attached to the Proxy Statement as Annex B thereto and
is incorporated herein by reference. The written
materials presented by Lehman Brothers Inc. to the ISP
Special Committee on November 6, 2002 are set forth as
Exhibits (c)(2) through (c)(6) hereto and are
incorporated herein by reference.

ITEM 10. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION

Regulation M-A
Item 1007

(a) - (d) SOURCE OF FUNDS; CONDITIONS; EXPENSES; BORROWED FUNDS.
The information set forth in the Proxy Statement under
the captions "The Merger - Fees and Expenses of the
Merger" and "The Merger - Financing of the Merger" is
incorporated herein by reference.

ITEM 11. INTEREST IN SECURITIES OF THE SUBJECT COMPANY

Regulation M-A
Item 1008

(a) SECURITIES OWNERSHIP. The information set forth in the
Proxy Statement under the captions "Summary Term Sheet
- Interests of Directors and Executive Officers in the
Merger," "Special Factors - Background of the Merger,"
"Special Factors - Interests of Directors and
Executive Officers in the Merger," "The Special
Meeting - Voting Rights; Vote Required for Approval"
and "Other Matters - Security Ownership of Specified
Beneficial Owners and Management" is incorporated
herein by reference.

(b) (1) -(5) SECURITIES TRANSACTIONS. The information set forth in
the Proxy Statement under the caption "Other Matters -
Transactions in Capital Stock by Certain Persons" is
incorporated herein by reference.

ITEM 12. THE SOLICITATION OR RECOMMENDATIONS

Regulation M-A
Item 1012

(d) INTENT TO TENDER OR VOTE IN A GOING-PRIVATE
TRANSACTION. The information set forth in the Proxy
Statement under the captions "Summary Term Sheet -
Interests of Directors and Executive Officers in the
Merger," "Special Factors - Interests of Directors and
Executive Officers in the Merger" "Special Factors -
Specified Relationships Between ISP and Mr. Heyman"
and "The Special Meeting - Voting Rights; Vote
Required for Approval" is incorporated herein by
reference.

(e) RECOMMENDATIONS OF OTHERS. The information set forth
in the Proxy Statement under the captions "Summary
Term Sheet - Recommendations of the Special Committee
and our Board of Directors," "Summary Term Sheet - Our
Position as to the Fairness of the Merger," "Summary
Term Sheet - Mr. Heyman and ISPH's Position as to the
Fairness of the Merger," "Special Factors - Background
of the Merger," "Special Factors - Recommendation of
the Special Committee," "Special Factors -
Recommendations of our Board of Directors," "Special
Factors - Mr. Heyman and ISPH's Positions as to the
Fairness of the Merger" and "Special Factors - Reasons
for the Merger; Purpose and Structure of the Merger"
is incorporated herein by reference.

ITEM 13. FINANCIAL STATEMENTS

Regulation M-A
Item 1010

(a) FINANCIAL INFORMATION. The information set forth in
the Proxy Statement under the caption "Summary Term
Sheet - Selected Consolidated Financial Data of ISP"
is incorporated herein by reference.

(b) PRO FORMA INFORMATION. None.

ITEM 14. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR
USED

Regulation M-A
Item 1009

(a) - (b) SOLICITATIONS OR RECOMMENDATIONS; EMPLOYEES AND
CORPORATE ASSETS. The information set forth in the
Proxy Statement under the captions "Summary Term Sheet
- Our Position as to the Fairness of the Merger,"
"Summary Term Sheet - Opinion of

Lehman Brothers Inc.," "Special Factors - Background
of the Merger," "Special Factors - Opinion of Lehman
Brothers," "Special Factors - Special Committee's
Position as to Fairness of the Merger," "Special
Factors - Mr. Heyman and ISPH's Positions as to the
Fairness of the Merger," "The Special Meeting -
Solicitation of Proxies," "The Merger - Fees and
Expenses of the Merger" and "The Merger - Financing of
the Merger" is incorporated herein by reference.

ITEM 15. ADDITIONAL INFORMATION

Regulation M-A
Item 1011

(b) OTHER MATERIAL INFORMATION. The information set forth
in the Proxy Statement, including all annexes and
exhibits thereto, is incorporated herein by reference.

ITEM 16. EXHIBITS

Regulation M-A
Item 1016

(a) Amendment No. 3 to the Preliminary Proxy Statement
filed with the Securities and Exchange Commission on
November 27, 2002 (incorporated herein by reference to
Amendment No. 3 to the Preliminary Proxy Statement).

(b) None.

(c) (1) Opinion of Lehman Brothers Inc. attached as Annex B to
Amendment No. 3 to the Preliminary Proxy Statement
(incorporated herein by reference to Amendment No. 3
to the Preliminary Proxy Statement).

(c) (2) Materials presented by Lehman Brothers Inc. to the ISP
Special Committee on September 18, 2002 (previously
filed).

(c) (3) Materials presented by Lehman Brothers Inc. to the ISP
Special Committee on September 27, 2002 (previously
filed).

(c) (6) Materials presented by Lehman Brothers Inc. to the
Board of Directors of ISP on November 8, 2002
(previously filed).

(d) (1) Agreement and Plan of Merger, dated as of November 8,
2002 by and among ISP and ISPH attached as Annex A to
Amendment No. 3 to the Preliminary Proxy Statement
(incorporated herein by reference to Amendment No. 3
to the Preliminary Proxy Statement).

(d) (2) Stockholder Voting Agreement, dated November 8, 2002,
between ISP and Samuel J. Heyman attached as Annex C
to Amendment No. 3 to the Preliminary Proxy Statement
(incorporated herein by reference to Amendment No. 3
to the Preliminary Proxy Statement).

(e) None.

(f) Section 262 of the General Corporation Law of the
State of Delaware attached as Annex D to Amendment No.
3 to the Preliminary Proxy Statement (incorporated
herein by reference to Amendment No. 3 to the
Preliminary Proxy Statement).

(g) None.

SIGNATURE

After due inquiry and to the best of their knowledge and belief, the
undersigned certify that the information set forth in this statement is true,
complete and correct.

Dated: January 31, 2003

INTERNATIONAL SPECIALTY PRODUCTS INC.

By: /s/ SUNIL KUMAR
------------------------------------
Name: Sunil Kumar
Title: President and Chief Executive Officer

SAMUEL J. HEYMAN

/s/ SAMUEL J. HEYMAN
------------------------------------

INTERNATIONAL SPECIALTY PRODUCTS
HOLDINGS INC.

By: /s/ SUNIL KUMAR
------------------------------------
Name: Sunil Kumar
Title: President and Chief Executive Officer

EXHIBIT INDEX

EXHIBIT NO. DESCRIPTION

(a) Amendment No. 3 to the Preliminary Proxy Statement
filed with the Securities and Exchange Commission on
November 27, 2002 (incorporated herein by reference
to Amendment No. 3 to the Preliminary Proxy
Statement).

(b) None.

(c) (1) Opinion of Lehman Brothers Inc. attached as Annex B
to Amendment No. 3 to the Preliminary Proxy
Statement (incorporated herein by reference to
Amendment No. 3 to the Preliminary Proxy Statement).

(c) (2) Materials presented by Lehman Brothers Inc. to the
ISP Special Committee on September 18, 2002
(previously filed).

(c) (3) Materials presented by Lehman Brothers Inc. to the
ISP Special Committee on September 27, 2002
(previously filed).

(c) (6) Materials presented by Lehman Brothers Inc. to the
Board of Directors of ISP on November 8, 2002
(previously filed).

(d) (1) Agreement and Plan of Merger, dated as of November
8, 2002 by and among ISP and ISPH attached as Annex
A to Amendment No. 3 to the Preliminary Proxy
Statement (incorporated herein by reference to
Amendment No. 3 to the Preliminary Proxy Statement).

(d) (2) Stockholder Voting Agreement, dated November 8,
2002, between ISP and Samuel J. Heyman attached as
Annex C to Amendment No. 3 to the Preliminary Proxy
Statement (incorporated herein by reference to
Amendment No. 3 to the Preliminary Proxy Statement).

(e) None.

(f) Section 262 of the General Corporation Law of the
State of Delaware attached as Annex D to Amendment
No. 3 to the Preliminary Proxy Statement
(incorporated herein by reference to Amendment No. 3
to the Preliminary Proxy Statement).

(g) None.