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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 75)
DeSoto, Inc.
- -----------------------------------------------------------------
(Name of Issuer)
Common Stock, 1 par value
- -----------------------------------------------------------------
(Title Class of Securities)
250595105
- -----------------------------------------------------------------
(CUSIP Number)
Sutton Holding Corp.
101 East 52nd Street
11th Floor
New York, New York 10022
Attention: William Spier
(212) 759-3287
and
Peter Golden, Esq.
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
(212) 859-8000
- -----------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 20, 1996
- -----------------------------------------------------------------
(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 [ ].
Check the following box if a fee is being paid with the statement
[ ]. (A fee is not required only if the reporting person: (1)
has a previous statement on file reporting beneficial ownership
of more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto
reporting beneficial ownership of five percent or less of such
class.) (See Rule 13d-7.)
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
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SEC 1746 (12-91)
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SCHEDULE 13D
CUSIP No. 250595-10-5 Page 2 of 13 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sutton Holding Corp.
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 IF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED
BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
100 Shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
less than .01%
14 TYPE OF REPORTING PERSON*
CO
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SCHEDULE 13D
CUSIP No. 250595-10-5 Page 3 of 13 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Coatings Group, Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b)[ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC, OO
5 CHECK BOX IF DISCLOSURE IF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7 SOLE VOTING POWER
SHARES 246,507 Shares*
BENEFICIALLY 8 SHARED VOTING POWER
OWNED
BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
WITH 246,507 Shares*
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
246,507 Shares*
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.26%
14 TYPE OF REPORTING PERSON*
CO
* Does not include shares which may be acquired upon exercise of
warrants. See Section 5.
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SCHEDULE 13D
CUSIP No. 250595-10-5 Page 4 of 13 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Anders Schroeder (includes stock ownership of
Asgard, Ltd. which is affiliated with Mr. Schroeder)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b)[ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF and, with respect to Asgard, Ltd., WC
5 CHECK BOX IF DISCLOSURE IF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Denmark
NUMBER OF 7 SOLE VOTING POWER
SHARES 218,970 Shares*
BENEFICIALLY 8 SHARED VOTING POWER
OWNED 0
BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING 218,970 Shares*
PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
218,970 Shares*
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.67%
14 TYPE OF REPORTING PERSON*
IN
* Does not include shares which may be acquired upon exercise of
warrants. See Section 5.
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SCHEDULE 13D
CUSIP No. 250595-10-5 Page 5 of 13 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Parkway M&A Capital Corporation
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b)[ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC, OO
5 CHECK BOX IF DISCLOSURE IF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin
NUMBER OF 7 SOLE VOTING POWER
SHARES 84,144 Shares*
BENEFICIALLY 8 SHARED VOTING POWER
OWNED
BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
WITH 84,144 Shares*
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
84,144 Shares*
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.79%
14 TYPE OF REPORTING PERSON*
CO
* Does not include shares which may be acquired upon exercise of
warrants. See Section 5.
5 of 13
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SCHEDULE 13D
CUSIP No. 250595-10-5 Page 6 of 13 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
M&A Investment Pte Ltd.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ] (b)[ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC, OO
5 CHECK BOX IF DISCLOSURE IF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Singapore
NUMBER OF 7 SOLE VOTING POWER
SHARES 47,368 Shares
BENEFICIALLY 8 SHARED VOTING POWER
OWNED
BY EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON 10 SHARED DISPOSITIVE POWER
WITH 47,368 Shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
47,368 Shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.01%
14 TYPE OF REPORTING PERSON*
CO
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This Amendment No. 75 amends and supplements the statement
on Schedule 13D, filed by Sutton Holding Corp., a New York
corporation ("Sutton"), and certain related parties on
November 14, 1989 (the "Schedule 13D") with respect to the Common
Stock, par value $1.00 per share (the "Shares"), of DeSoto, Inc.,
a Delaware corporation (the "Company").
Unless otherwise defined, all capitalized terms used herein
shall have the meaning given such terms in the Schedule 13D.
Item 4 of the Schedule 13D is hereby amended to add the
following information:
ITEM 4. PURPOSE OF TRANSACTION
On August 20, 1996, a Group Dissolution Agreement was
executed with the effect that, except for Sutton and Coatings
Group, Inc., there will no longer be a group filing this
Schedule 13D. The Group Dissolution Agreement is described in
Item 5 hereof.
On June 26, 1996, the Company and Keystone Consolidated
Industries, Inc. ("Keystone") entered into an Agreement and Plan
of Reorganization (the "Merger Agreement") which provides, among
other things, that, subject to certain conditions, a subsidiary
of Keystone will be merged with and into the Company and the
Company will become a wholly owned subsidiary of Keystone (the
"Merger"). In the Merger, each Share will be converted into
.7465 shares of common stock of Keystone.
In connection with the Merger Agreement, Coatings Group,
Inc. ("Coatings"), Asgard, Ltd. ("Asgard"), Parkway M&A Capital
Corporation ("Parkway") and M&A Investment Pte Ltd. ("M&A")
entered into a Voting Agreement dated June 26, 1996 with Keystone
(the "Voting Agreement") pursuant to which, among other things,
they agreed to vote their Shares and Senior Preferred Shares in
favor of the Merger Agreement and the transactions contemplated
thereby at the meeting of stockholders of the Company to be
called in connection with the Merger Agreement. Coatings, Asgard
and Parkway also entered into (i) a Warrant Conversion Agreement
dated June 26, 1996 (the "Warrant Conversion Agreement") with
Keystone pursuant to which they agreed that one-half of their
warrants to purchase an aggregate of 1,200,000 Shares will, upon
consummation, of the Merger be canceled and (ii) a Preferred
Stock Waiver and Consent Agreement dated June 26, 1996 (the
"Preferred Stock Agreement") with Keystone pursuant to which,
among other things, they agreed that their Senior Preferred
Shares will be converted in the Merger into newly created
preferred stock of Keystone having equivalent rights and cash in
an amount equal to accrued and unpaid dividends (which, as of
May 31, 1996, aggregated approximately $1.44 million), and that
they will waive their right to require the
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SEC 1746 (12-91)
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redemption of the Senior Preferred Shares as a result of
consummation of the Merger. Coatings Group, Asgard, Parkway and
M&A also entered into a Stockholder Agreement (the "Stockholder
Agreement") on June 26, 1996 with the Company, Keystone, and
Contran Corporation pursuant to which they agreed that their
rights under the Preferred Stock and Warrant Purchase Agreement
dated as of July 21, 1992 (the "Purchase Agreement") with the
Company will terminate upon consummation of the Merger except for
the registration rights granted pursuant thereto and they agreed
to certain limitations on such registration rights.
The Voting Agreement, Warrant Conversion Agreement,
Preferred Stock Agreement, and Stockholders Agreement may
facilitate and increase the likelihood that the Merger will be
consummated.
Item 5 of the Schedule 13D is hereby amended to add the
following information:
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
On August 20, 1996, Coatings, Asgard, Parkway, and M&A
agreed that they shall no longer act together with respect to
their Shares and Senior Preferred Shares, including decisions
regarding the purchase or sale of securities of the Company or
voting of such securities. These parties have agreed that, in
exercising their demand registration rights under the Purchase
Agreement, Asgard is entitled to make one demand on behalf of the
parties with registration rights and Coatings, Parkway and M&A
are entitled to make one demand for registration and that their
participation in any registration will be in proportion to the
number of shares each wishes to include in the registration if
all of their shares cannot be so included. As a result of this
agreement (the "Group Dissolution Agreement"), (i) Coatings,
(ii) Asgard and (iii) Parkway and M&A are no longer a "group" for
purposes of Schedule 13D. As a result of the Group Dissolution
Agreement, as of the date hereof, the Shares owned by Sutton and
Coatings and the Senior Preferred Shares owned by Coatings shall
be the only securities owned by parties to this Schedule 13D who
shall have a reporting obligation regarding Schedule 13D.
The percentage ownership disclosed on pages 2 through 6 of
this Amendment has been updated to reflect the 4,688,523 Shares
reported by the Company to be outstanding in the Merger
Agreement.
Item 6 of the Schedule 13D is hereby amended to add the
following information:
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIP
WITH RESPECT TO SECURITIES OF THE ISSUER
Reference is made to Items 4 and 5 of this Amendment for a
description of the Voting Agreement, Warrant Conversion
Agreement, Preferred Stock Agreement, Stockholders Agreement, and
the Group Dissolution Agreement.
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
(i) Voting Agreement
(ii) Group Dissolution Agreement
9 of 13
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
SUTTON HOLDING CORP.
By: /s/William Spier
------------------------
William Spier
August 21, 1996
10 of 13
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
COATINGS GROUP, INC.
By: /s/William Spier
------------------------
William Spier
August 21, 1996
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
/s/Anders U. Schroeder
----------------------
Anders U. Schroeder
August 21, 1996
12 of 13
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
M&A INVESTMENT PTE LTD.
By: /s/David Tobey
------------------------
PARKWAY M&A CAPITAL
CORPORATION
By: /s/David Tobey
August 21, 1996
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VOTING AGREEMENT
Agreement dated as of June 26, 1996 between each of the
parties listed on Schedule A hereto (collectively, the "Principal
Shareholders") and Keystone Consolidated Industries, Inc., a
Delaware corporation ("Keystone"). Capitalized terms used but
not defined herein shall have the meanings ascribed to such terms
in the Merger Agreement (as defined below).
In consideration of the execution by Keystone of the
Agreement and Plan of Reorganization dated as of June 26, 1996
(the "Merger Agreement") between DeSoto, Inc., a Delaware
corporation ("DeSoto"), and Keystone, and other good and valuable
consideration, receipt of which is hereby acknowledged, the
Principal Shareholders and Keystone hereby agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF PRINCIPAL
SHAREHOLDER. Each Principal Shareholder hereby represents and
warrants as to itself to Keystone as follows:
(a) TITLE. As of the date hereof, the Principal
Shareholder owns of record that number of shares of Common Stock,
$1.00 par value, of DeSoto ("Common Shares") and that number of
shares of Series B Preferred Stock of DeSoto ("Preferred Shares")
set forth opposite its name on Schedule A hereto. (The Common
Shares and Preferred Shares are together referred to as the
"Shares".)
(b) RIGHT TO VOTE. The Principal Shareholder has
full legal power, authority and right to vote all Shares owned of
record by it in favor of approval and adoption of the Merger
Agreement and the transactions contemplated by the Merger
Agreement, without the consent or approval of, or any other
action on the part of, any other person or entity. Without
limiting the generality of the foregoing, except for this
Agreement, the Principal Shareholder has not entered into any
voting agreement with any person or entity with respect to any of
the Shares, granted any person or entity any proxy (revocable or
irrevocable) or power of attorney with respect to any of the
Shares, deposited any of the Shares in a voting trust or entered
into any arrangement or agreement with any person or entity, in
each such case having the effect of limiting or affecting the
Principal Shareholder's legal power, authority or right to vote
the Shares in favor of the approval and adoption of the Merger
Agreement or any of the transactions contemplated by the Merger
Agreement.
(c) AUTHORITY. The Principal Shareholder has
full legal power, authority and right to execute and deliver, and
to perform its obligations under, this Agreement. This Agreement
has been duly executed and delivered by the Principal Shareholder
and constitutes a valid and binding agreement of the Principal
Shareholder enforceable against the Principal Shareholder in
accordance with its terms, subject to (i) bankruptcy, insolvency,
moratorium and other similar laws now or hereafter in effect
relating to or affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether
considered in a proceeding at law or
<PAGE>
in equity). As of the date of the DeSoto shareholders meeting to
vote on approval and adoption of the Merger Agreement and, to the
extent submitted to shareholders for approval, the transactions
contemplated by the Merger Agreement, including any adjournment
or postponement thereof (the "DeSoto Shareholders Meeting"),
except for this Agreement, the Principal Shareholder will have
full legal power, authority and right to vote all Shares in favor
of the approval and adoption of the Merger Agreement and the
transactions contemplated by the Merger Agreement, without the
consent or approval of, or any other action on the part of, any
other person or entity. From and after the date hereof, the
Principal Shareholder will not commit any act that could restrict
or otherwise affect such legal power, authority and right to vote
all Shares in favor of the approval and adoption of the Merger
Agreement and the transactions contemplated by the Merger
Agreement. Without limiting the generality of the foregoing,
from and after the date hereof the Principal Shareholder will not
enter into any voting agreement with any person or entity with
respect to any of the Shares, grant any person or entity any
proxy (revocable or irrevocable) or power of attorney with
respect to any of the Shares, deposit any of the Shares in a
voting trust or otherwise enter into any agreement or arrangement
limiting or affecting the Principal Shareholder's legal power,
authority or right to vote the Shares in favor of the approval
and adoption of the Merger Agreement and the transactions
contemplated by the Merger Agreement (other than this Agreement).
(d) CONFLICTING INSTRUMENTS; NO TRANSFER.
Neither the execution and delivery of this Agreement nor the
performance by the Principal Shareholder of its agreements and
obligations hereunder will result in any breach or violation of
or be in conflict with or constitute a default under any term of
(i) any agreement, judgment, injunction, order, decree, law,
regulation or arrangement to which the Principal Shareholder is a
party or by which the Principal Shareholder (or any of its
assets) is bound, except for any such breach, violation, conflict
or default which, individually or in the aggregate, would not
impair or affect the Principal Shareholder's ability to cast the
votes with respect to its Shares at the DeSoto Shareholders
Meeting or (ii) the Certificate of Incorporation of DeSoto.
2. REPRESENTATIONS AND WARRANTIES OF KEYSTONE.
Keystone hereby represents and warrants to each Principal
Shareholder that this Agreement has been duly authorized by all
necessary corporate action on its part, has been duly executed
and delivered by Keystone and is a valid and binding agreement of
Keystone enforceable against Keystone in accordance with its
terms, subject to (i) bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights
generally and the rights of creditors of insurance companies
generally and (ii) general principles of equity (regardless of
whether considered in a proceeding at law or in equity).
3. RESTRICTION ON TRANSFER. Each Principal
Shareholder agrees that it will not, and will not agree to, sell,
assign, dispose of, encumber, mortgage, hypothecate or otherwise
transfer (collectively, "Transfer") any Shares or any options,
warrants or other rights to acquire Common Shares or Preferred
Shares to any person or entity; PROVIDED that, notwithstanding
the foregoing, the Principal Shareholder shall be permitted to
Transfer Shares to any person if prior
8
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to and as a condition of such Transfer such person agrees in
writing to be bound by the terms of this Agreement, including but
not limited to, the obligation to vote such Shares in accordance
with Section 4 hereof.
4. AGREEMENT TO VOTE OF PRINCIPAL SHAREHOLDERS. Each
Principal Shareholder hereby irrevocably and unconditionally
agrees to vote or to cause to be voted all Shares owned of record
by it at the DeSoto Shareholders Meeting and at any other
adjournment thereof where such matters arise in favor of the
approval and adoption of the Merger Agreement and the
transactions contemplated by the Merger Agreement.
5. ACTION IN PRINCIPAL SHAREHOLDER CAPACITY ONLY.
Each Principal Shareholder makes no agreement or understanding
herein as director or officer of DeSoto. Each Principal
Stockholder signs solely in its capacity as a record and
beneficial owner of its Shares, and nothing herein shall limit or
affect any actions taken any officer or director of DeSoto in his
capacity as such.
6. INVALID PROVISIONS. If any provision of this
Agreement shall be invalid or unenforceable under applicable law,
such provision shall be ineffective to the extent of such
invalidity or unenforceability only, without it affecting the
remaining provisions of this Agreement.
7. EXECUTED IN COUNTERPARTS. This Agreement may be
executed in 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. SPECIFIC PERFORMANCE. The parties hereto agree
that if for any reason any Principal Shareholder fails to perform
any of its agreements or obligations under this Agreement
irreparable harm or injury to Keystone would be caused for which
money damages would not be an adequate remedy. Accordingly, each
Principal Shareholder agrees that, in seeking to enforce this
Agreement against that Principal Shareholder, Keystone shall be
entitled to specific performance and injunctive and other
equitable relief.
9. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Delaware without giving effect to the principles of conflicts of
laws thereof.
10. AMENDMENTS; TERMINATION. (a) This Agreement may
not be modified, amended, altered or supplemented, except upon
the execution and delivery of a written agreement executed by the
parties hereto.
(b) The provisions of this Agreement shall
terminate upon the earlier to occur of (i) the consummation of
the Merger and (ii) the termination of the Merger Agreement.
(c) For purposes of this Agreement, the term
"Merger Agreement"
9
<PAGE>
includes the Merger Agreement, as the same may be modified or
amended from time to time; PROVIDED that no such amendment or
modification amends or modifies the Merger Agreement in a manner
such that the Merger Agreement, as so amended or modified, is
less favorable to the Principal Shareholders in any material
respect than is the Merger Agreement in effect on the date
hereof.
11. ADDITIONAL SHARES. If, after the date hereof, a
Principal Shareholder acquires direct ownership of any shares of
Common Stock (any such shares, "Additional Shares"), including,
without limitation, upon exercise of any option, warrant or right
to acquire Common Shares or Preferred Shares or through any stock
dividend or stock split, the provisions of this Agreement (other
than those set forth in Section 1) applicable to Shares shall be
applicable to such Additional Shares as if such Additional Shares
had been Shares as of the date hereof. The provisions of the
immediately preceding sentence shall be effective with respect to
Additional Shares without action by any person or entity
immediately upon the acquisition by that Principal Shareholder of
direct ownership of such Additional Shares.
12. ACTION BY WRITTEN CONSENT. If, in lieu of the
DeSoto Shareholders Meeting, shareholder action in respect of the
Merger Agreement or any of the transactions contemplated by the
Merger Agreement is taken by written consent, the provisions of
this Agreement imposing obligations in respect of or in
connection with the DeSoto Shareholders Meeting shall apply
MUTATIS MUTANDIS to such action by written consent.
13. SUCCESSORS AND ASSIGNS. The provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective legal successors and
permitted assigns; PROVIDED that no party may assign, delegate or
otherwise transfer any of its rights or obligations under this
Agreement without the consent of Keystone (in the case of a
Principal Shareholder or any of his permitted assigns) or the
Principal Shareholders (in the case of Keystone). Without
limiting the scope or effect of the restrictions on Transfer set
forth in Section 3 hereof, each Principal Shareholder agrees that
this Agreement and the obligations hereunder shall attach to the
Shares and shall be binding upon any person or entity to which
legal or beneficial ownership of such Shares shall pass, whether
by operation of law or otherwise.
14. NOTICES. All notices and other communications
pursuant to this Agreement shall be delivered personally, by
telecopy, by certified or registered mail or by courier at the
addresses set forth below (or such other address specified by
such person) and shall be deemed given at the time of delivery.
If to Keystone:
Keystone Consolidated Industries, Inc.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1740
10
<PAGE>
Dallas, Texas 75240
Attention: Glenn R. Simmons
with a copy to:
Godwin & Carlton, P.C.
901 Main Street, Suite 2500
Dallas, Texas 75202
Attention: James G. Vetter, Jr.
If to the Principal Shareholders:
c/o DeSoto, Inc.
101 East 52nd Street
New York, New York 10022
Attention: William Spier
with a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Peter Golden, Esq.
15. INTEGRATION. This Agreement constitutes the
entire understanding and agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior
agreements and understandings of the parties with respect to the
subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of this 26th day of June, 1996.
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
By:
----------------------------------
Name:
Title:
Principal Shareholders
11
<PAGE>
COATINGS GROUP, INC.
By:
----------------------------------
Name:
Title:
ANDERS U. SCHROEDER
----------------------------------
ASGARD LTD.
By:
----------------------------------
Name: Anders U. Schroeder
PARKWAY M&A CAPITAL CORPORATION
By:
----------------------------------
Name:
Title:
M&A INVESTMENT PTE LTD.
By:
----------------------------------
Name:
Title:
12
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SCHEDULE A
<TABLE>
<CAPTION>
Series B
Principal Shareholder Common Shares Owned Preferred Shares Owned
- --------------------- ------------------- ----------------------
<S> <C> <C>
1. Coatings Group, Inc. 246,507 259,259
2. Anders U. Schroeder and
Asgard Ltd. 218,970 194,444
3. Parkway M&A Capital
Corporation 84,144 129,630
4. M&A Investment Pte Ltd. 47,368 0
</TABLE>
<PAGE>
Group Dissolution Agreement
AGREEMENT dated as of August 20, 1996 among Coatings Group,
Inc. ("Coatings"), Asgard Ltd. ("Asgard"), Parkway M&A Capital
Corporation ("Parkway"), and M&A Investment Pte Ltd. ("M&A")
(Parkway and M&A collectively being referred to as "Parkway
M&A").
1.Each of Coatings, Asgard, and Parkway M&A hereby agrees
that each of the others (and their respective affiliates) is free
to buy, sell, hold and vote securities of DeSoto, Inc. ("DeSoto")
without coordinating, consulting or reaching agreement with any
of the others regardless of any prior understanding, agreement or
arrangement, written or unwritten, among the parties.
2.Each of Coatings, Asgard and Parkway M&A hereby agrees
that the only agreement among these parties (and their respective
affiliates) regarding securities issued by DeSoto (and any
successor issuer, including Keystone Consolidated Industries,
Inc. ("Keystone") is (i) that, in exercising demand registration
rights under the Preferred Stock and Warrant Purchase Agreement
dated as of July 21, 1992 with DeSoto or under the Stockholders
Agreement dated as of June 26, 1996 with DeSoto, Keystone and
Contran Corporation, Asgard shall be entitled to exercise one
demand on behalf of the parties (without the consent of the other
parties) and Coatings and Parkway M&A together shall be entitled
to exercise one demand on behalf of the parties (without the
consent of Asgard) and (ii) if all of their shares cannot be
included in any registration (regardless of which party has
exercised the demand in respect thereof), then their shares shall
be included in proportion to the number of shares each wishes to
include in the registration.
3.Each of Coatings, Asgard and Parkway M&A agrees that
Asgard shall be entitled to designate one of the two directors of
Keystone the holders of the Series A Senior Preferred Stock of
Keystone are permitted to designate if payment of dividends on
this stock is in default, as provided in the terms of the stock,
and Coatings and Parkway M&A shall be entitled to designate the
other director; provided, that Asgard (or its affiliates) owns at
the time of designation of directors at least 50% of the Series A
Senior Preferred Stock that Asgard owns immediately after
consummation of the merger of Desoto and a subsidiary of
Keystone.
<PAGE>
Accepted and agreed by:
COATINGS GROUP, INC.
By:
-------------------------
William Spier
ASGARD, LTD.
By:
-------------------------
Anders U. Schroeder
PARKWAY M&A CAPITAL
CORPORATION
By:
-------------------------
David Tobey
M&A INVESTMENT PTE LTD.
By:
-------------------------
David Tobey
2
