SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (Fee required) - For the fiscal year ended December 31, 1994
Commission file number 1-3919
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 37-0364250
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5430 LBJ Freeway, Suite 1740
Three Lincoln Centre, Dallas, TX 75240-2697
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 458-0028
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $1 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark whether 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 Regulation S-K is not contained herein, and will not be contained, to the
best of registrants 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. (X)
As of February 28, 1995, 5,636,507 shares of common stock were outstanding. The
aggregate market value of the 1,873,324 shares of voting stock held by
nonaffiliates of the Registrant, as of such date, was approximately $25.3
million.
DOCUMENTS INCORPORATED BY REFERENCE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
DIRECTORS
THOMAS E. BARRY Director since 1989
Dr. Barry, 51, is Associate Dean for Academic Affairs and Professor of
Marketing of the Edwin L. Cox School of Business, Southern Methodist University.
PAUL M. BASS, JR. Director since 1989
Mr. Bass, 59, is Vice Chairman of First Southwest Company, an investment
banking firm, and has served as a director since prior to 1990. Mr. Bass is
also Chairman of Richman Gordman Half Price Stores, Inc., Chairman of MorAmerica
Private Equities Company, director of First Madison Bank and Chairman of the
Audit Committee, and director of Source Services, Inc. Mr. Bass is currently
serving as a member of the Executive Committee of Zale-Lipshy University
Hospital and as a trustee of the Southwestern Medical Foundation.
DAVID E. CONNOR Director since 1992
Mr. Connor, 69, is President of David E. Connor and Associates, advisers
to commerce and industry, in Peoria, Illinois and has served in such capacity
since prior to 1990. He is a director of Cilcorp, Inc., Peoria, Illinois, and
Chairman of the Board of First Midwest Bankshares, Quincy, Illinois. He is also
director of Heartland Community Health Clinic, Peoria, Illinois, Museum Trustees
of America, Washington, D.C. and a trustee of Bradley University, Peoria,
Illinois.
GLENN R. SIMMONS Director since 1986
Mr. Simmons, 67, is Chairman of the Board of Directors and Chief Executive
Officer of Keystone and has served in such capacities since prior to 1990. Mr.
Simmons has served as Vice Chairman of the Board of Directors of Contran
Corporation ("Contran"), a diversified holding company, which may be deemed to
be the beneficial holder of approximately 62% of the Common Stock, since prior
to 1990. Mr. Simmons has been a director of Contran and an executive officer
and/or director of various companies related to Contran since prior to 1990. He
is Vice Chairman of the Board of Valhi, Inc. ("Valhi"), Vice Chairman of the
Board of Valcor, Inc., and a director of NL Industries, Inc. ("NL") and Tremont
Corporation ("Tremont"), all of which companies may be deemed to be affiliates
of Keystone.
DONALD A. SOMMER Director since 1962
Mr. Sommer, 66, served as a Vice President of the Company prior to his
retirement in 1982.
J. WALTER TUCKER, JR. Director since 1971
Mr. Tucker, 69, is Vice Chairman of the Board of Directors of the Company
and has served in such capacity since prior to 1990. Mr. Tucker has served as a
director, President, and Treasurer of Tucker & Branham, Inc., a real estate,
mortgage banking and insurance firm since prior to 1990. Mr. Tucker is also a
director of SunTrust Banks, Inc., Columbian Mutual Life Insurance Company and
Valhi.
RICHARD N. ULLMAN Director since 1992
Mr. Ullman, 60, is President of Federal Companies, a commercial warehouse
and transportation company in Peoria, Illinois, and has served in such capacity
since prior to 1990. He is a director of First of America Bank - Illinois, N.A.
and Cilcorp, Inc., and is also serving as director of Children's Hospital of
Illinois at St. Francis, director of St. Francis Medical Center, and a trustee
of Bradley University, all located in Peoria.
EXECUTIVE OFFICERS
In addition to Glenn R. Simmons and J. Walter Tucker, Jr, the following are
executive officers of Keystone:
HAROLD M. CURDY, 47, is Vice President - Finance and Treasurer of the
Company and has served in such capacities since prior to 1990.
BERT E. DOWNING, JR., 38, is Corporate Controller of the Company and has
served in such capacity since December 1993. From prior to 1990 to December
1993, Mr. Downing served as Senior Manager in the Dallas office of Ernst &
Young, a public accounting firm.
RALPH P. END, 57, has served as Vice President and General Counsel since
1991 and as the Corporate Counsel and Assistant Secretary of the Company since
prior to 1990.
BILL J. JOHNSON, 59, has served as President, Sherman Wire, Sherman, Texas,
since February, 1995. Mr. Johnson served as Vice President & General Manager,
Sherman Wire, since prior to 1990.
JAMES H. KAUFFMAN, 50, has served as President, Keystone Steel & Wire,
since 1991. Mr. Kauffman served as Vice President and Treasurer of Valhi and
Contran and various companies related to Valhi and Contran since prior to 1990
to 1991.
SANDRA K. MYERS, 51, is Corporate Secretary of the Company and Executive
Secretary of Contran and has served in both capacities since prior to 1990.
ROBERT W. SINGER, 58, is President and Chief Operating Officer of the
Company and has served in that capacity since prior to 1990. He has served as
Vice President of Valhi and Contran since prior to 1990.
ITEM 11. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following table summarizes all compensation paid to the Company's chief
executive officer and to each of the Company's four most highly compensated
executive officers other than the chief executive officer for services rendered
in all capacities to the Company for the years ended December 31, 1994, 1993,
and 1992.
<TABLE>
<CAPTION>
Annual Compensation
Name and Principal Position Year Salary ($) Bonus ($)
<S> <C> <C> <C>
Glenn R. Simmons (2) 1994 186,650 -
Chief executive Officer 1993 157,846 -
1992 144,385 -
Harold M. Curdy 1994 132,000 125,000
Vice President - Finance 1993 125,000 56,250
& Treasurer 1992 125,000 67,500
Bill J. Johnson 1994 96,560 70,500
President 1993 93,404 20,976
Sherman Wire Division 1992 98,708 40,495
James H. Kauffman 1994 167,693 54,600
President 1993 159,996 -
Keystone Steel & Wire Division 1992 155,767 84,960
Robert W. Singer 1994 225,000 150,000
President 1993 200,000 150,000
1992 200,000 150,000
</TABLE>
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Restricted Securities
Stock Underlying All Other
Awards Options Compensation
Name and Principal Position ($) (#) ($)(1)
<S> <C> <C> <C>
Glenn R. Simmons (2) - - -
Chief Executive Officer - 12,500 -
- 15,000 -
Harold M. Curdy - - 6,690
Vice President - Finance 19,475 5,000 8,362
& Treasurer - - 8,728
Bill J. Johnson - 2,100 6,642
President 21,525 2,500 6,695
Sherman Wire Division - - 6,533
James H. Kauffman - - 6,690
President 24,600 5,000 8,994
Keystone Steel & Wire Division - - 8,728
Robert W. Singer - - 6,690
President 25,625 10,000 8,994
- - 8,728
<FN>
<F1>
(1) Amounts contributed by the Company to the 401(k) Plan.
(2) Glenn R. Simmons, Chairman of the Board and Chief Executive Officer of the
Company, is not a salaried employee of the Company. The reported salary
includes an allocation of Mr. Simmons' time devoted to Keystone business
under the Intercorporate Services Agreement (see Item 13 - "Certain
Business Relationships and Related Transactions") in the amount of
$175,000, $149,596 and $136,135 for 1994, 1993 and 1992, respectively, and
directors' fees in the amount of $11,650, $8,250 and $8,250 for 1994, 1993
and 1992, respectively.
</FN>
</TABLE>
OPTION GRANTS IN 1994
The following tables set forth certain information at December 31, 1994 and
for the fiscal year then ended with respect to stock options and stock
appreciation rights granted to and exercised by the individuals named in the
Summary Compensation Table above. No options have been granted at an option
price below fair market value on the date of grant.
<TABLE>
<CAPTION>
Number % of Total
of Options
Securities Granted to Exercise
Underlying Employees or Base
Options in Fiscal Price
Name Granted* Year ($/Share)
<S> <C> <C> <C>
Bill J. Johnson 2,100 43% 10.25
</TABLE>
<TABLE>
<CAPTION>
Potential Realizable
Value oat Assumed Annual
Rates of Stock Price
Appreciation for Option
Name Expiration Term ($)
Date 5% 10%
<S> <C> <C> <C>
Bill J. Johnson 01/13/04 13,537 34,305
<FN>
<F2>
* Options were granted on January 13, 1994 and vest 20%, 40%, 60% and 100% on
the first, second, third, and fourth anniversary of the date of grant,
respectively.
</FN>
</TABLE>
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value
Shares Acquired Realized
Name on Exercise (#) ($)
<S> <C> <C>
Glenn R. Simmons 22,500 41,587
Harold M. Curdy 7,500 16,675
Bill Johnson - -
James H. Kauffman - -
Robert W. Singer 30,000 66,699
</TABLE>
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Options/SARs at FY-End (#) at FY-End ($) (2)
Name Exercisable Unexercisable (1) Exerciseable Unexercisable
<S> <C> <C> <C> <C>
Glenn R. Simmons 8,500 19,000 16,778 55,635
Harold M. Curdy 1,000 4,000 4,875 19,500
Bill J. Johnson 500 4,100 2,438 16,838
James H. Kauffman 7,000 8,000 4,875 19,500
Robert W. Singer 2,000 8,000 9,750 39,000
<FN>
<F3>
(1) Options vest 20%, 40%, 60% and 100% on the first, second, third, and fourth
anniversary of the date of grant, respectively.
(2) The values shown in the table are based on the $13.625 per share closing
price of the Company's Common Stock on December 31, 1994 as reported by the
New York Stock Exchange Composite Tape, less the exercise price of the
options.
</FN>
</TABLE>
PENSION PLANS
Keystone maintains several qualified, noncontributory defined benefit plans
which provide defined retirement benefits to eligible employees including
executive officers. Under the plans covering salaried employees, including
officers, the defined benefit for an individual is based on a straight life
annuity. An individual's monthly benefit is the sum of the following: (a) for
credited service prior to January 1, 1981, the amount determined by his or her
average monthly cash compensation for the five years of his or her highest
earnings prior to January 1, 1981, multiplied by 1.1%, multiplied by the years
of credited service, plus (b) for each year of service between 1980 and 1989,
the amount determined by the sum of 1.2% multiplied by his or her average
monthly cash compensation that year up to the social security wage base and
1.75% multiplied by his or her average monthly cash compensation that year in
excess of the social security wage base, plus (c) for each year subsequent to
1989, the amount determined by 1.2% multiplied by his or her average monthly
cash compensation that year, but not less than $14.00 per month.
The estimated annual benefits payable upon retirement at normal retirement
age for each of the salaried employees named in the Cash Compensation Table,
assuming continued employment with the Company until normal retirement age at
current salary levels are: Harold M. Curdy, $44,980; Bill J. Johnson, $27,252;
James H. Kauffman, $34,666; and Robert W. Singer, $27,405. Glenn R. Simmons
does not participate in the Keystone Pension Plan.
DIRECTOR'S COMPENSATION
Directors of Keystone who are not salaried employees of the Company receive
an annual retainer of $12,000. Such directors also receive a fee of $450 per
day for each Board of Directors meeting and/or committee meeting requiring
attendance in person. Directors are also reimbursed for reasonable expenses
incurred in attending Board of Directors and/or committee meetings. On May 5,
1992 the shareholders approved the Keystone Consolidated Industries, Inc. 1992
Non-Employee Director Stock Option Plan, which provides that each non-employee
director will be granted an option to purchase 1,000 shares of Common Stock on
the third business day after the Company issues its press release summarizing
the Company's annual financial results for the prior fiscal year. The exercise
price of the options will be equal to the last reported sale price of Common
Stock on the New York Stock Exchange Composite Tape on the date of grant.
COMPENSATION AND INTERLOCKS AND INSIDER PARTICIPATION
The present members of the Compensation Committee are Messrs. Barry, Bass
and Sommer. Mr. Sommer served as Vice President of the Company prior to his
retirement in 1982.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth the stockholders known to the Company to be
the beneficial owner of more than 5% of the Common Stock outstanding as of March
23, 1995.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
<S> <C> <C>
Harold C. Simmons 3,783,483(1)(2) 67.1%
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240
The Killen Group 317,500 5.6%
1189 Lancaster Avenue
Berwyn, Pennsylvania 19312
_______
</TABLE>
The shares of Common Stock shown as beneficially owned by Harold C. Simmons
includes 3,166,933, 326,050, 250,000 and 30,000 shares of Common Stock held
by Contran, NL, The Harold Simmons Foundation, Inc. (the "Foundation") and
The Combined Master Retirement Trust (the "Master Trust"), respectively.
Contran and NL directly hold approximately 56.2% and 5.8%, respectively, of
the outstanding Common Stock. Valhi and Tremont are the holders of
approximately 53.0% and 17.8%, respectively, of the outstanding common
stock of NL. Contran holds, directly or indirectly through related
entities, approximately 91.0% and 44.2% of the outstanding common stock of
Valhi and Tremont, respectively. Substantially all of Contran's
outstanding voting stock is held by trusts established for the benefit of
Harold C. Simmons' children and grandchildren (together, the "Trusts"), of
which Mr. Simmons is the sole trustee. As sole trustee of each of the
Trusts, Mr. Simmons has the power to vote and direct the disposition of the
shares of Contran stock held by each of the Trusts; however, Mr. Simmons
disclaims beneficial ownership thereof.
Harold C. Simmons is Chairman of the Board, President and Chief Executive
Officer of Valhi and Contran and Chairman of the Board and Chief Executive
Officer of certain related entities through which Contran may be deemed to
control Valhi. Additionally, he is Chairman of the Board of NL and is a
director of Tremont.
The Master Trust holds approximately 0.5% of the outstanding shares of
Common Stock. The Master Trust is a trust formed by Valhi to permit the
collective investment by trusts that maintain the assets of certain
employee benefit plans adopted by Valhi and related companies, including
Keystone. Harold C. Simmons is sole trustee of the Master Trust and sole
member of the Trust Investment Committee for the Master Trust. The trustee
and members of the Trust Investment Committee for the Master Trust are
selected by Valhi's board of directors. Harold C. Simmons and Glenn R.
Simmons are members of Valhi's board of directors and are both participants
in one or more of the employee benefit plans that invest through the Master
Trust; however, both such persons disclaim beneficial ownership of the
shares of Common Stock held by the Master Trust, except to the extent of
their respective vested beneficial interests therein.
The Foundation holds approximately 4.4% of the outstanding shares of Common
Stock. The Foundation is a tax-exempt foundation organized and existing
exclusively for charitable purposes. Harold C. Simmons is Chairman of the
Board and Chief Executive Officer of the Foundation.
By virtue of the relationships described above, Harold C. Simmons may be
deemed to control such entities and Mr. Simmons and such entities may be
deemed to possess indirect beneficial ownership of certain shares of Common
Stock held by such entities. However, Mr. Simmons disclaims such
beneficial ownership of the shares of Common Stock beneficially owned,
directly or indirectly, by such entities.
Certain information contained in this footnote is based on information
provided to the Company by Valhi, Contran and certain of their affiliates.
The shares of Common Stock shown as beneficially owned by Harold C. Simmons
also includes 10,500 shares of Common Stock held by Mr. Simmons' wife, with
respect to all of which Mr. Simmons disclaims beneficial ownership.
SECURITY OWNERSHIP
As of March 23, 1995, the Company's directors, the executive officers named
in the Summary Compensation Table below, and the directors and executive
officers as a group, beneficially owned, as defined by the rules of the
Securities and Exchange Commission, the shares of Common Stock shown in the
following table.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) CLASS (2)
<S> <C> <C>
Thomas E. Barry (5) 3,100 -
Paul M. Bass, Jr. (3)(5) 5,500 -
David E. Connor (5) 3,500 -
Harold M. Curdy (5) 16,406 -
Bill J. Johnson (5) 4,970 -
James H. Kauffman (5) 11,683 -
Glenn R. Simmons (4)(5) 55,100 -
Robert W. Singer (5) 37,875 -
Donald A. Sommer (5) (6) 31,964 -
J. Walter Tucker, Jr. (6) 153,450 2.7%
Richard N. Ullman (5) 3,500 -
All directors and executive officers as a group
(14 persons)(4) 335,892 6.0%
________
<FN>
<F3>
(1) All beneficial ownership is sole and direct except as otherwise set forth
herein. Information as to the beneficial ownership of Common Stock has
either been furnished to the Company by or on behalf of the indicated
persons or is taken from reports on file with the Securities and Exchange
Commission.
(2) Percentage omitted if less than 1%.
(3) Includes 2,500 shares of Common Stock held in discretionary accounts by
First Southwest Company, a licensed broker-dealer, on behalf of certain of
its clients, as to which Mr. Bass has voting and dispositive authority.
Mr. Bass serves as Senior Director of First Southwest Company. As a result
of the foregoing, Mr. Bass may be deemed to be the beneficial owner of such
shares. However, Mr. Bass disclaims all such beneficial ownership.
(4) Glenn R. Simmons is the brother of Harold C. Simmons. See footnote (1) to
the "Security Ownership of Certain Beneficial Owners" table.
(5) Includes shares that such person or group could acquire upon the exercise
of options exercisable within 60 days of the Record Date by Messrs. Barry,
Bass, Connor, Sommer, and Ullman for the purchase of 3,000 shares each, and
named executive officers, Messrs. Curdy, Johnson, Kauffman, Simmons and
Singer, for the purchase of 2,000, 1,420, 8,000, 14,000, and 4,000 shares,
respectively, and the directors and executive officers as a group for the
purchase of 46,220 shares under the Company's stock option plans.
(6) Donald A. Sommer is a first cousin to the spouse of J. Walter Tucker, Jr.
</FN>
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
As set forth under the caption "Security Ownership", Harold C. Simmons,
through Contran and other entities, may be deemed to beneficially own
approximately 67% of the Common Stock and, therefore, may be deemed to control
the Company. The Company and other entities that may be deemed to be controlled
by or affiliated with Mr. Simmons sometimes engage in (a) intercorporate
transactions such as guarantees, management and expense sharing arrangements,
shared fee arrangements, joint ventures, partnerships, loans, options, advances
of funds on open account, and sales, leases and exchanges of assets, including
securities issued by both related and unrelated parties, and (b) common
investment and acquisition strategies, business combinations, reorganizations,
recapitalizations, securities repurchases, and purchases and sales (and other
acquisitions and dispositions) of subsidiaries, divisions or other business
units, which transactions have involved both related and unrelated parties and
have included transactions which resulted in the acquisition by one related
party of a publicly-held minority equity interest in another related party. No
transactions of the type described above are planned or proposed with respect to
the Company; the Company continuously considers, reviews and evaluates, and
understands that Contran and related entities consider, review and evaluate,
such transactions. Depending on the business, tax and other objectives then
relevant, it is possible that the Company might be a party to one or more of
such transactions in the future. In connection with these activities the
Company may consider issuing additional equity securities or incurring
additional indebtedness. The Company's acquisition activities have in the past
and may in the future include participation in the acquisition or restructuring
activities conducted by other companies that may be deemed to be controlled by
Harold C. Simmons. It is the policy of the Company to engage in transactions
with related parties on terms, in the opinion of the Company, no less favorable
to the Company than could be obtained from unrelated parties.
Glenn R. Simmons, J. Walter Tucker, Jr., and Sandra K. Myers are not
salaried employees of the Company. The Company has contracted with Contran, on
a fee basis payable in quarterly installments, to provide certain administrative
and other services to the Company in addition to the services of Mr. Simmons and
Ms. Myers, including consulting services of Contran executive officers. The fee
incurred during 1994 was $640,000. The Company has contracted with Tucker &
Branham, Inc. for the services of Mr. Tucker. The fees paid Tucker & Branham,
Inc. during 1994 were $66,000.
Certain of Keystone's property, liability and casualty insurance risks are
partially insured or reinsured by a captive insurance subsidiary of Valhi. The
premiums and claims paid in connection therewith were approximately $98,000 for
the year ended December 31, 1994.
Aircraft services were purchased from Valhi in the amount of $128,000 for
the year ended December 31, 1994.
In the opinion of management and the Board of Directors, the terms of the
transactions described above were no less favorable to the Company than those
that could have been obtained from an unrelated entity.
S I G N A T U R E S
Pursuant to the requirements 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.
Keystone Consolidated Industries, Inc.
(Registrant)
Date: May 1, 1995 By /s/Harold M. Curdy
Harold M. Curdy
Vice President - Finance/Treasurer
(Principal Financial Officer)
Date: May 1, 1995 By /s/Bert E. Downing, Jr.
Bert E. Downing, Jr.
Corporate Controller
(Principal Accounting Officer)
S I G N A T U R E S
Pursuant to the requirements 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.
Keystone Consolidated Industries, Inc.
(Registrant)
Date: May 1, 1995 By ___________________________________
Harold M. Curdy
Vice President - Finance/Treasurer
(Principal Financial Officer)
Date: May 1, 1995 By ___________________________________
Bert E. Downing, Jr.
Corporate Controller
(Principal Accounting Officer)
