SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A - AMENDMENT N0. 1
[ X ] Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the fiscal year ended December 31, 1994 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ___________________ to ___________________
Commission file number 1-1915
DeSoto, Inc.
(Exact name of registrant as specified in its charter)
Delaware 36-1899490
(State of incorporation) (I.R.S. Employer Identification No.)
16750 South Vincennes Road, South Holland, Illinois 60473
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 708/331-8800
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, par value $1 per share New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
The registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months and (2) has been subject to such filing requirements for the past 90
days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulations S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
At February 15, 1995, the aggregate market value of the voting stock held by
nonaffiliates of the registrant was approximately $20,040,000.
At February 15, 1995, the registrant had 4,671,707 shares of common stock
outstanding.
Documents Incorporated by Reference
Portions of the following documents of the registrant are incorporated herein
by reference:
Document Part of Form 10-K
PART III
Item 10. Directors and Executive Officers of the Registrant
BOARD OF DIRECTORS
Set forth below is certain information, as of February 15, 1995, about each
director of the Company. Unless otherwise provided, each nominee or director
has served in the capacity indicated (or in comparable administrative or
executive positions with the same corporation) for the past five years.
Terms Expiring at the 1995 Annual Meeting (Class I)
ANDERS U. SCHROEDER Director since 1990
Vice Chairman of the Company from 1991 to present;
Chief Executive Officer of Asgard Ltd. (real estate
investments and corporate investments) since 1990; Age: 44
Vice Chairman of Jacob Holm & Sons A-S (a holding
and management company engaged in manufacturing and
investing in real estate entities) from 1986 to
1990; Executive Vice President of Sutton Holding
Corp.(a corporation formed for the purpose of
acquiring the Company) since 1989; partner in law
firm of O Bondo Svane from 1982 to 1992 and
associated with the law firm of Sullivan & Worcester
from 1986 to 1990.
Director: Sutton Holding Corp.
_______________
DAVID M. TOBEY Director since 1990
Managing Director of Parkway M&A Capital
Corporation (a company engaged in investments)
since 1988. Age: 56
Director: Sutton Holding Corp.; and Competitive Technologies, Inc.
_______________
Terms Expiring at the 1996 Annual Meeting (Class II)
ANNE E. EISELE Director since 1994
Senior Vice President, Chief Financial Officer
and Secretary of the Company since November 1992;
served the Company in various executive or Age: 39
administrative positions since March 1984.
_______________
JOHN R. PHILLIPS Director since 1994
President and Chief Executive Officer of the Company
since December 1993; Vice President of A. E. Staley
Manufacturing Co. (a manufacturer of food ingredients) Age: 50
from 1991 to 1993; Senior Vice President of Bunge
Corporation (a manufacturer of food ingredients)
from 1980 to 1991.
_______________
PAUL E. PRICE Director since 1988
Retired Senior Vice President of The Quaker Oats
Company(manufacturer of grocery products and pet
foods) Age: 60
Director: Xytronyx, Inc.; and Eljer Industries, Inc.
_______________
Terms Expiring at the 1997 Annual Meeting (Class III)
DANIEL T. CARROLL Director since 1991
Chairman of the Board and President of the Carroll
Group, Inc. (a management consulting firm). Age: 68
Director: Aon Corporation; Comshare, Inc.;
Diebold, Inc.; Wolverine World Wide, Inc.;
Michigan National Corp.; A. M. Castle & Co.;
American Woodmark Corporation; UDC Homes, Inc.;
Oshkosh Truck Corp.; and Woodhead Industries, Inc.
_______________
WILLIAM P. LYONS Director since 1991
Chairman of JVL Corp., (a manufacturer of generic
and over-the-counter pharmaceutical products) since
1992; President and Chief Executive Office of Age: 53
William P. Lyons and Co., Inc.(an investment firm)
since 1975; Chairman and Chief Executive Officer of
Duro Test Corp. (a manufacturer of specialty lighting
products) from 1988 to 1991.
Director: Holmes Protection Group, Inc.; Lydall, Inc.; and
Video Lottery Technologies, Inc.
_______________
WILLIAM SPIER Director since 1990
Chairman of the Company from 1991 to present; Chief
Executive Officer of the Company from 1991 to January
1994. President and Chairman of Sutton Holding Age: 60
Corp. (a corporation formed for the purpose of
acquiring the Company) from 1989 to present, and a
private investor from 1982 to present.
Director: Geotek Industries; Holmes Protection Group, Inc.; and
Video Lottery Technologies, Inc.
_______________
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors and executive officers, and
persons who own more than ten percent of a registered class of the
Company's equity securities, to file by specific dates with the
Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company on Forms 3, 4 and 5.
Officers, directors and greater than ten-percent stockholders are
required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file. The Company is required to report in
this proxy statement any failure to file by the relevant due date any
of these reports based solely on the Company's review of copies of
such reports furnished to it and written representations received by
the Company that the filing of a Form 5 was not required. Based upon
this review, the Company is not aware of any person, except as
indicated below, who at any time during 1994, was a director, officer
or a beneficial owner of more than ten percent of any class of equity
securities of the Company registered pursuant to the Exchange Act
that failed to file on a timely basis reports required by Section
16(a) of the Exchange Act during 1993. John R. Phillips, President
and Chief Executive Officer of the Company was required to file a
Form 3 within ten days of becoming an officer of the Company
reporting the grant of 15,000 shares to Mr. Phillips by the Company.
This form was filed late. Mr. Phillips also filed Form 4 reporting
the purchase of 4,000 shares in April 1994 after the due date for
filing such Form.
Item 11. Executive Compensation
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth certain information for the years
ended December 31, 1992, 1993, and 1994 concerning the compensation
of each of the executive officers of the Company who served as
executive officers as of December 31, 1994. The table also sets
forth the compensation paid to one other executive officer who left
the Company during 1994 and who otherwise would have been included in
the table.
Summary Compensation Table
<TABLE>
Annual Compensation (a) Long Term Compensation Awards
Other Stock
Name and Annual Stock Grants Options All Other
Principal Position Year Salary Compensation (Value) (Shares) (Shares) Compensation
<S> <C> <C> <C> <C> <C> <C> <C>
William Spier (b) 1994 $ - $ - $ - - 10,000 $ -
Chairman of the Board 1993 123,750 - - - 10,000 -
1992 165,000 - - - - -
John R. Phillips (c) 1994 275,301 - 174,375 30,000 70,000 2,235
President and 1993 - - - - - -
Chief Executive Officer
N. Ron Bowen (d) 1994 100,000 - - - 20,000 1,490
Executive Vice President
Anne E. Eisele (e) 1994 130,000 - - - - 1,937
Senior Vice President and 1993 115,000 - - - - -
Chief Financial Officer 1992 95,837 - - - 20,000 -
James L. Jackson (f) 1994 55,000 - - - - 185,000
Senior Vice President and 1993 165,000 - - - - -
Chief Operating Officer 1992 110,840 - - - 30,000 -
</TABLE>
(a) Includes participants' before tax deposits to the DeSoto Stock
Ownership Plus Plan.
(b) Mr. Spier also served as Chief Executive Officer in 1992 and 1993.
(c) Mr. Phillips first became an employee of the Company as of December
13, 1993. Mr. Phillips' contract provided for the grant on January
3, 1994 of an award of 30,000 shares of restricted stock pursuant to
the DeSoto, Inc. 1992 Stock Plan (the "1992 Plan") of which 15,000
vested on grant and the remaining 15,000 shares vested on December
13, 1994. The value of Mr. Phillips' 30,000 shares as presented in
the table is based upon the stock price on the dates the shares
vested. The value Mr. Phillips' 30,000 shares of stock at December
31, 1994 was $97,500. The Company is precluded from paying dividends
on any class of its stock. The amount under "All Other Compensation"
represents contributions by the Company to Mr. Phillips' account in
the DeSoto Stock Ownership Plus Plan.
(d) Mr. Bowen first became an employee of the Company as of May 2, 1994.
The amount under "All Other Compensation" represents contributions by
the Company to Mr. Bowen's account in the DeSoto Stock Ownership Plus
Plan. Mr. Bowen has been granted 10,000 shares of common stock under
the 1992 Stock Plan to be awarded in 5,000 share installments on each
May 2 from 1995 through 1996.
(e) During 1992 Ms. Eisele was Chief Accounting Officer and Secretary.
As of November 12, 1992, Ms. Eisele became Vice President - Finance,
Chief Financial Officer and Secretary; Ms. Eisele was named Senior
Vice President in October 1993. The amount under "All Other
Compensation" represents contributions by the Company to Ms. Eisele's
account in the DeSoto Stock Ownership Plus Plan. Ms. Eisele has been
granted 10,000 shares of common stock under the 1992 Stock Plan to be
awarded in 2,500 share installments on each May 2 from 1995 through
1998.
(f) During 1992, Mr. Jackson was Executive Vice President of the Company
and, as of November 12, 1992, was part of the Office of the
President. Mr. Jackson became President and Chief Operating Officer
in April, 1993. Effective January, 1994 Mr. Jackson was Senior Vice
President and Chief Operating Officer. As of April 27, 1994, Mr.
Jackson became a consultant to the Company. The amount under all
other compensation represents salary continuation and the use of a
Company car accrued as of December 31, 1994 for payment in 1995 to
Mr. Jackson. The amount under "All Other Compensation" includes
$150,000 of consulting fees and expenses paid to Mr. Jackson in 1994
and $35,000 of consulting fees accrued as of December 31, 1994 for
payment in 1995 to Mr. Jackson. See "Employment Contracts".
Shown below is information with respect to stock options granted
during the year ended December 31, 1994 under the Company's 1993 Stock
Plan, which provides, among other things, for the grant of options to
purchase shares of Common Stock.
Option Grants, Exercises and Year-End Values - 1993 Option Grants
<TABLE>
Percentage Potential Realized
of Total Value at Assumed Rates
Options Options of Stock Price
Granted Granted Exercise Appreciation for Option
(in Common to Employees Price Expiration Term ($)(b)
Shares)(a) in 1994 Per Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
William Spier (c) 10,000 8.7% $6 7/8 April 20, 2004 $ 43,237 $109,580
John R. Phillips (d) 70,000 60.9 7 March 31, 2004 308,160 780,990
N. Ron Bowen (e) 20,000 17.4 6 5/8 May 2, 2004 83,329 211,200
Anne E. Eisele - - - - - -
James L. Jackson - - - - - -
</TABLE>
(a) Stock appreciation rights may not be granted under the Company's 1992
Stock Plan.
(b) Under the rules and regulations of the SEC, the potential realizable
value of a grant is the product of (i) the difference between (x) the
product of the per share market price at the time of grant and the
sum of 1 plus the adjusted stock price appreciation rate (the assumed
rate of appreciation compounded annually over the term of the option)
and (y) the per share exercise price of the option and (ii) the
number of securities underlying the grant at year-end. Assumed
annual rates of stock price appreciation of 5% and 10% are specified
by the SEC and are not intended to forecast possible future
appreciation, if any, of the price of the shares of Common Stock of
the Company. (For example, if the price of shares of Common Stock
remained at the exercise price of the options, (i.e. a 0%
appreciation rate), the potential realized value of the grant would
be $0.) The actual performance of such shares may be significantly
different from the rates specified by the SEC.
(c) The grant was made as of April 20, 1994 with an exercise price equal
to the market price at that time. The options were immediately
exercisable.
(d) The grant was made as of March 31, 1994 with an exercise price equal
to the market price at that time. 14,000 shares became exercisable
on December 13, 1994. 14,000 shares become exercisable on each
December 13 from 1995 through 1998.
(e) The grant was made as of May 2, 1994 with an exercise price equal to
the market price at that time. 10,000 shares become exercisable on
each May 2 in 1995 and 1996.
The following table provides certain information with respect to the
number and value of unexercised options outstanding as of December 31,
1994.
Aggregated 1994 Option Exercises and December 31, 1994 Option Values
<TABLE>
Number of Unexercised Value of Unexercised
Shares Options (in Common Shares) In-the-Money Options at
Acquired Value at December 31, 1994 December 31, 1994 (a)
Exercised Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C>
William Spier - - 20,000 / 0 $ - / $ -
John R. Phillips - - 14,000 / 56,000 - / -
N. Ron Bowen - - 0 / 20,000 - / -
Anne E. Eisele - - 13,333 / 6,667 - / -
James L. Jackson - - 30,000 / 0 - / -
</TABLE>
(a) Calculated by determining the difference between the fair market
value of the Common Stock underlying the options on December 31, 1994
(3 1/4, the closing price on the New York Stock Exchange - Composite
Transactions) and the exercise price of the options on that date.
DEFINED BENEFIT PLAN
The following table presents the estimated annual benefits payable
upon retirement at age 65, after selected periods of continuous service,
under the DeSoto Employees' Retirement Plan (the "Retirement Plan") and
the Salaried Employees' Pension Preservation Plan (the "Preservation
Plan"):
Estimated Annual Pension Benefits at Age 65
Years of Service in DeSoto Salaried
Employee's Retirement Plan
Average Annual Cash
Compensation During
Five Consecutive 10 Years 20 Years 30 Years 35 Years
Years of Highest Pay Service Service Service Service
$100,000 $ 16,700 $ 33,300 $ 50,000 $ 58,500
125,000 20,850 41,650 62,500 73,000
150,000 25,000 50,000 75,000 87,500
175,000 29,150 58,350 87,500 102,000
200,000 33,300 66,700 100,000 116,500
225,000 37,500 75,000 112,500 131,250
250,000 41,650 83,350 125,000 145,850
275,000 45,850 91,650 137,500 160,400
300,000 50,000 100,000 150,000 175,000
325,000 54,150 108,350 162,500 189,600
The compensation covered by the Pension Plan and the Preservation
Plan is substantially the same as that reported under the "Salary" and
"Bonus" columns of the Summary Compensation Table, limited, however, to
$150,000 for 1994 (or such other amount provided by Section 401(a)(17) of
the Internal Revenue Code of 1986, as amended (the "Code")). As of
December 31, 1994, the estimated credited years of service of Messrs.
Spier, Phillips, and Bowen, Ms. Eisele and Mr. Jackson are approximately
4, 1, 1, 11, and 22, respectively. Benefits are computed on the basis of
a straight life annuity and are subject to offset for Social Security
benefits (although the calculation of the offset under the Salaried
Pension Plan differs from the offset under the Preservation Plan). To the
extent an employee's benefit as computed under the Salaried Pension Plan
exceeds the limitations provided under the Code or an employee's service
exceeds 35 years, the benefit will be provided under the Preservation
Plan.
In a settlement of litigation which became effective in 1992 related,
among other things, to the Company's pension plans, employees of the
Company who were participants in the pension plans on or after March 1,
1989 and prior to June 10, 1991, in essence, will receive a 3%
increase in their accrued pension benefits as of June 10, 1991 under the
plans, and such participants who have completed ten years of service with
DeSoto but whose employment terminates or terminated prior to their attaining
age 55 will be entitled to receive unreduced deferred vested benefits under
the plans beginning at age 63 instead of age 65, but if they commence
receiving such benefits prior to age 63, they will continue to receive
reduced benefits on the same terms and conditions as previously. (Messrs.
Spier, Phillips and Bowen are not eligible for these increased benefits; Ms.
Eisele and Mr. Jackson are eligible.)
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company are paid an annual
retainer fee of $6,000 and, in addition, receive $800 for each Board or
committee meeting attended and for each day such director is deposed for
litigation concerning the Company. In addition, in accordance with the terms
of the DeSoto, Inc. 1992 Stock Plan, which was approved by stockholders at
the 1992 Annual Meeting of Stockholders on May 27, 1992, each non-employee
director of the Company receives an initial grant of options to purchase
3,000 shares of Common Stock upon the date the individual becomes a non-
employee director (directors serving on May 27, 1992 received the grant 30
days subsequent to stockholder approval) and, thereafter, annual grants of
options to purchase 500 shares of Common Stock. Options granted to non-
employee directors have an exercise price equal to one hundred percent of the
fair market value (as defined in the Plan) of the Common Stock on the date
the options are granted, have a term of ten years, and are exercisable at any
time after the date of grant.
EMPLOYMENT CONTRACTS
In connection with the employment of John R. Phillips by the Company and
as an incentive for Mr. Phillips to join the Company, the Company entered
into an employment contract, dated as of December 13, 1993, with Mr.
Phillips employing him as President and Chief Executive Officer and
appointing him as a member of the Board of Directors effective as of January
3, 1994. The contract provides for an annual base salary of $250,000, the
provision of benefits including life insurance and medical benefit plans and
the use of a company car and, after 1994, participation in bonus plans
generally on the same terms as other senior officers of the Company, the
provision of $12,000 per year as a housing allowance, and reimbursement of
business expenses and a club membership. In addition, the contract provided
for the grant on January 3, 1994 of an award of 30,000 shares of restricted
stock pursuant to the DeSoto, Inc. 1992 Stock Plan (the "1992 Plan"), of
which 15,000 vested on grant and the remaining 15,000 shares rested on
December 13, 1994, and the grant pursuant to the 1992 Plan on March 31, 1994
of a non-statutory option to purchase 70,000 shares with an exercise price
equal to the "Fair Market Value" on that date (as defined in the 1992 Plan as
the last sale price of shares on that date), of which 14,000 shares shall
vest on each December 13 from 1994 through 1998. The contract has an initial
term of two years and, unless notice not to extend is given by the Company or
Mr. Phillips, as of June 13, 1994, shall be automatically extended so that
the unexpired term as of any day is always eighteen months. Under the
contract, Mr. Phillips has agreed to certain confidentiality and other
similar provisions and to restrictions on his ability to compete with the
Company.
In September 1993, the Company entered into an agreement with Anne E.
Eisele, Senior Vice President and Chief Financial Officer, which provides for
certain payments to be made to her in the event of a change in control of the
Company, the amount of which depends on whether she remains in the Company's
employ.
As of April 27, 1994, James L. Jackson, who had been Senior Vice
President and Chief Operating Officer, became a consultant to the Company.
Under his consulting agreement, Mr. Jackson will receive $185,000 for
consulting fees and expenses during the period from May 1994 through April
1995. He will also receive the use of a Company car and medical insurance
coverage as available to other officers of the Company through April 1995.
Under certain circumstances, the arrangement described above may be continued
for a period up to November 1, 1995. Compensation during this period would
be $82,500.
Item 12. Security Ownership of Certain Beneficial Owners and Management
STOCK OWNERSHIP OF MANAGEMENT AND OTHERS
The following table sets forth certain information as of February 15,
1995 (except as otherwise indicated) regarding the beneficial ownership of
shares of voting stock of the Company held by (i) directors, (ii) each person
or entity known to the Company who beneficially owns more than 5% of the
outstanding Common Stock or Senior Preferred Stock, (iii) each executive
officer named in the Summary Compensation Table appearing in "Compensation of
Executive Officers", and (iv) all directors (including nominees) and
executive officers as a group. Except as otherwise indicated, each person or
entity has sole voting and investment power of the shares listed. For
purposes of this table, shares which are not outstanding but which are
subject to options or warrants are deemed to be outstanding for purposes of
computing the percentage of outstanding shares of the class owned by the
holder of the option or warrants but are not deemed to be outstanding for the
purpose of computing the percentage of the class owned by other persons.
<TABLE>
Combined
Ownership of
Amount and Approximate Common and
Amount and Approximate Nature of Percent of Senior Preferred
Name of Individual Nature of Percent of Beneficial Outstanding Stock as
or Entity Beneficial Outstanding Ownership of Senior Approximate
or Number Ownership of Common Common Senior Preferred Preferred Percent of all
in Group Stock (Shares)(1) Stock Stock (Shares) Stock Voting Stock
<S> <C> <C> <C> <C> <C>
Sutton Holding Corp.(2) 1,797,089(3) 30.6% 583,333(4) 100.0% 36.9%(5)
The Gabelli Group(6) 797,200(6) 17.1% 0 0 15.2%
William Spier 799,840(7) 15.3% 259,259(8) 44.4% 18.2%
Anders U. Schroeder 638,970(9)(10) 12.5% 194,444(11) 33.3% 14.7%
Pioneering Management Corp.(12) 459,400(12) 9.8% 0 0 *
John R. Phillips 49,000(13) 1.1% 0 0 *
James L. Jackson 30,998(14) * 0 0 *
William P. Lyons 29,000(9)(15) * 0 0 *
Anne E. Eisele 14,503(16) * 0 0 *
Daniel T. Carroll 7,500(9) * 0 0 *
David M. Tobey 7,000(9)(17) * 0(18) 0(18) *(19)
Paul E. Price 4,200(9)(20) * 0 0 *
N. Ron Bowen 309(21) * 0 0 *
All directors and executive officers
as a group (10 persons) 1,979,599(9)(22) 33.1% 583,333 100% 39.0%(9)(22)
</TABLE>
_________________
* Denotes less than 1%
(1) The information under this caption is based on
representations made to the Company by individual directors
or nominees and/or filings made with the Securities and
Exchange Commission.
(2) Sutton Holding Corp., a New York corporation, is part of a
group filing a joint Schedule 13D with respect to ownership
of shares of Common Stock that includes Anders U.
Schroeder, an affiliate of William Spier, and parties
having a business relationship with David Tobey. Sutton is
owned Asgard Ltd. (an affiliate of Anders U. Schroeder),
Parkway M&A Capital Corporation ("Parkway"), M&A Investment
Pte Ltd. ("M&A") (entities having a business relationship
with David Tobey). and an individual having no other
relationship with the Company. Messrs. Spier, Schroeder
and Tobey are directors and officers of Sutton. Sutton's
address is 101 East 52nd Street, 11th Floor, New York, New
York 10022.
(3) Sutton is the record owner of 100 shares of Common Stock.
The stock ownership reported in the table for Sutton also
includes the stock ownership of the other parties to the
Schedule 13D referred to in Note 2 as follows: Coatings
Group, Inc. ("Coatings Group") beneficially owns 779,840
shares of Common Stock, of which 246,507 shares are
currently outstanding and 533,333 shares are issuable upon
warrants beneficially owned by Coatings Group; Anders U.
Schroeder and an affiliated entity beneficially own 618,970
shares of Common Stock, of which 218,970 shares are
currently outstanding and 400,000 are issuable upon
warrants beneficially owned by the affiliate of Mr.
Schroeder (options granted to Mr. Schroeder pursuant to the
1992 Stock Plan have not been included in the foregoing or
in the ownership for Sutton reported in the table); Parkway
beneficially owns 350,811 shares of Common Stock, of which
84,144 are currently outstanding and 266,667 are issuable
upon exercise of warrants beneficially owned by Parkway;
and M&A beneficially owns 47,368 shares of Common Stock,
all of which are currently outstanding. Consequently,
Sutton and these related parties currently beneficially own
an aggregate of 597,089 currently outstanding shares of
Common Stock and 1,200,000 shares of Common Stock issuable
upon exercise warrants having an exercise price of $7.00
per share, representing the 1,797,089 shares of Common
Stock reported in the table. (Options granted pursuant to
the 1992 Plan to affiliates of any of these parties have
not been included in these numbers.)
(4) Parties related to Sutton own all of the shares of Senior
Preferred Stock reported in the table. Coatings Group owns
259,259 of such shares, an affiliate of Anders U. Schroeder
owns 194,444 of such shares, and Parkway owns 129,630 of
such shares.
(5) Represents shares of Common Stock and Senior Preferred
Stock currently owned by parties referred to in Note 2 and
1,200,000 shares of Common Stock issuable upon exercise of
warrants owned by such parties as described in Note 3.
(6) As reported by Mario J. Gabelli and various entities which he directly
or indirectly controls and for which he acts as chief investment officer
(the "Gabelli Group") its members include the following: Gabelli Funds,
Inc. ("GFI"), GAMCO Investors, Inc. ("GAMCO"), Gabelli Securities, Inc.
("GSI"), Gabelli & Company, Inc. ("Gabelli & Company"), Gabelli
Performance Partnership ("GPP"), GLI, Inc. ("GLI"), The Gabelli
Associates Fund ("Gabelli Associates"), Gabelli Associates Limited
("GAL"), The Gabelli & Company, Inc. Profit Sharing Plan; Gabelli
International Limited ("GIL"), Gabelli International II Limited ("GIL
II"), Mario J. Gabelli ("Mr. Gabelli"), Lynch, Safety Railway and
Western New Mexico. The address of Mario J. Gabelli and the Gabelli
Group is c/o J. Hamilton Crawford, Jr., Gabelli Funds, Inc., One
Corporate Center, Rye, New York 10580-1434. Based on information in
Amendment No. 19 to Schedule 13D, dated December 13, 1994, the Gabelli
Group owns its shares of Common Stock as follows: Mario J. Gabelli,
7,500 shares; GAMCO, 783,700 shares; GSI, 1,000 shares; and GIL II,
5,000 shares. Each of the above persons or entities has sole voting and
dispositive power over its shares, except that GAMCO does not have
authority to vote 83,400 reported shares.
(7) Mr. Spier's stock ownership includes 246,507 currently outstanding
shares of Common Stock and 533,333 shares of Common Stock issuable upon
exercise of warrants owned by Coatings Group, a corporation of which Mr.
Spier is President and Chairman of the Board, and options to purchase
20,000 shares of Common Stock which are currently exercisable and were
granted pursuant to the 1992 Stock Plan. (The Coatings Group stock
ownership also has been included in the stock ownership reported for
Sutton. See Note 3.) The listed shares do not include the 100 shares
owned by Sutton or 100 shares held by Mr. Spier's father-in-law, as to
which Mr. Spier may be deemed the beneficial owner.
(8) All such shares are owned by Coatings Group. See Note 3.
(9) Does not include options not yet issued in 1995 under the 1992 Stock
Plan, but which under the terms of such Plan will be automatically
granted shortly to non-employee directors. Pursuant to the Plan, on
June 6, 1995, each of the non-employee directors will receive a grant of
options to purchase 500 shares of Common Stock.
(10) Mr. Schroeder's stock ownership includes stock owned by Asgard Ltd.
("Asgard"). Asgard, a corporation affiliated with Mr. Schroeder, owns
218,970 currently outstanding shares of Common Stock, 194,444 shares of
Senior Preferred Stock and beneficially owns 400,000 shares of Common
Stock issuable upon exercise of warrants. (Asgard's stock ownership has
been included in the stock ownership reported for Sutton. See Note 3.)
Also includes options to purchase 20,000 shares of Common Stock, which
are currently exercisable and were granted pursuant to the 1992 Stock
Plan.
(11) All such shares are owned by Asgard Ltd., a corporation affiliated with
Mr. Schroeder.
(12) Based on information in Schedule 13G, dated as of January 18, 1995. The
address of Pioneering Management Corporation is 60 State Street, Boston,
Massachusetts 02114.
(13) Includes options to purchase 14,000 shares of Common Stock which are
currently exercisable and were granted pursuant to the 1992 Stock Plan.
(14) Represents shares of Common Stock held in Mr. Jackson's account in the
DeSoto Stock Ownership Plus Plan and options to purchase 30,000 shares
of Common Stock, which are currently exercisable and were granted
pursuant to the 1992 Stock Plan. Also please refer to footnote (f)
under "Compensation of Executive Officers."
(15) Includes 25,000 shares of Common Stock owned by the William P. Lyons and
Co., Inc. Pension Trust, the only participant and beneficiary of which
is Mr. Lyons. Also includes options to purchase 4,000 shares of Common
Stock, which are currently exercisable and were granted pursuant to the
1992 Stock Plan.
(16) Includes shares of Common Stock held in Ms. Eisele's account in the
DeSoto Stock Ownership Plus Plan and options to purchase 13,333 shares
of Common Stock which are currently exercisable and were granted
pursuant to the 1992 Stock Plan. Does not include 2,500 shares of
common stock to be awarded on May 2, 1995 under the 1992 Stock Plan.
(17) Includes options to purchase 4,000 shares of Common Stock, which are
currently exercisable and were granted pursuant to the 1992 Stock Plan.
Does not include the stock ownership of Parkway and M&A. See Note 3.
(18) Does not include the 129,630 shares owned by Parkway.
(19) Does not include stock ownership of Parkway and M&A. See Note 3.
(20) Includes options to purchase 4,000 shares of Common Stock which are
currently exercisable and were granted pursuant to the 1992 Stock Plan.
(21) Represents shares of Common Stock held in Mr. Bowen's account in the
DeSoto Stock Ownership Plus Plan. Does not include 5,000 shares of
common stock to be awarded on May 2, 1995 under the 1992 Stock Plan.
(22) Includes 2,177 shares of Common Stock beneficially held in the DeSoto
Stock Ownership Plus Plan for the account of executive officers. Also
includes stock ownership of Sutton Holding Corp. to the extent not
otherwise included in the beneficial ownership of directors and
officers, stock options held by directors and officers if exercisable
within 60 days and shares issuable upon exercise of warrants. (Without
inclusion of such Sutton Holding Corp. stock ownership, directors and
officers, as a group, would own (i) 1,581,320 shares of Common Stock,
representing approximately 27.7% of the outstanding shares of Common
Stock, (ii) 453,703 shares of Senior Preferred Stock, representing
approximately 77.8% of all such shares, and (iii) approximately 32.3% of
all voting stock.)
Item 13. Certain Relationships and Related Transactions
Inapplicable.
SIGNATURE
Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
DeSoto, Inc.
(Registrant)
By Anne E. Eisele*
Anne E. Eisele
Sr. Vice President
May 1, 1995
