KEYSTONE CONSOLIDATED INDUSTRIES INC, DEF 14A, 1995-08-02

KEYSTONE CONSOLIDATED INDUSTRIES INC
DEF 14A, 1995-08-02
STEEL WORKS, BLAST FURNACES & ROLLING MILLS (COKE OVENS)

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To the Stockholders of
Keystone Consolidated Industries, Inc.:

The Annual Meeting of Stockholders of Keystone Consolidated Industries,
Inc., a Delaware corporation ("Keystone" or the "Company"), will be held on
August 16, 1995, at 9:00 a.m. local time, at the Corporate Offices at 5430 LBJ
Freeway, Suite 1740, Dallas, Texas, for the following purposes:

(1) To elect seven directors until their successors are duly elected and
qualified;

(2) To amend the Company's Certificate of Incorporation to replace the purposes
clause with a simplified and more general statement of such purposes;

(3) To amend the Company's Certificate of Incorporation to eliminate the right
of stockholders to cumulate votes in the election of directors;

(4) To amend the Company's Certificate of Incorporation to classify the Board
of Directors into three classes of directors with staggered three-year
terms;

(5) To amend the Company's Certificate of Incorporation to reduce the requisite
stockholder vote required in connection with any sale, lease or exchange of
all or substantially all of the property and assets of the Company;

(6) To amend the Company's Certificate of Incorporation to reduce the requisite
stockholder vote to approve future amendments to the Certificate of
Incorporation;

(7) To restate the Company's Certificate of Incorporation; and

(8) To transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.

The Board of Directors has fixed the close of business on July 17, 1995, as
the record date for determining the stockholders entitled to notice of and to
vote at the Annual Meeting. A complete list of the stockholders entitled to
vote at the Annual Meeting will be made available for inspection by any
stockholder of record at the offices of Keystone during ordinary business hours
from July 27, 1995, through the time of the meeting for any purpose germane to
the meeting.

In order to ensure that you are represented at the meeting, please complete
the enclosed proxy card and return it promptly in the accompanying postage-paid
envelope. If you choose, you may still vote in person at the Annual Meeting
even though you previously signed your proxy. You may revoke your proxy by
following the procedures specified in the accompanying Proxy Statement. Your
vote, whether given by proxy or in person at the meeting, will be held in
confidence by the Inspector of Election for the Annual Meeting in accordance
with the Company's bylaws.

By order of the Board of Directors,

Sandra K. Myers
Secretary
Dallas, Texas
July 27, 1995

KEYSTONE CONSOLIDATED INDUSTRIES, INC.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1740

Dallas, Texas 75240

PROXY STATEMENT

Annual Meeting Of Stockholders
To be held on August 16, 1995

This Proxy Statement and the accompanying proxy card are being furnished to
the stockholders of Keystone Consolidated Industries, Inc., a Delaware
corporation ("Keystone" or the "Company"), in connection with the solicitation
of proxies by and on behalf of the Board of Directors of Keystone for use at the
1995 Annual Meeting of Stockholders to be held on Wednesday, August 16, 1995 at
the Company's corporate offices at 5430 LBJ Freeway, Suite 1740, Dallas, Texas,
and at any adjournment or postponement thereof (the "Annual Meeting"). Any
stockholder executing a proxy has the power to revoke it at any time before it
is voted. A proxy may be revoked by either (i) filing with the Inspector of
Election a written revocation of the proxy; (ii) appearing at the Annual Meeting
and casting a vote contrary to that indicated on the proxy; or (iii) submitting
a duly executed proxy bearing a later date. Attendance at the Annual Meeting
alone, however, will not in itself constitute the revocation of a proxy. This
Proxy Statement and the accompanying proxy card are first being mailed to
stockholders on or about July 27, 1995. An annual report for the year ended
December 31, 1994, has been previously mailed to you.

Only stockholders of record at the close of business on July 17, 1995 (the
"Record Date") will be entitled to vote at the Annual Meeting. As of the Record
Date, there were 5,636,507 shares of Keystone's common stock, $1.00 par value
per share ("Common Stock"), outstanding and entitled to vote. Each share of
Common Stock entitles the holder thereof to one vote upon any proposal submitted
for a vote at the Annual Meeting. The presence, in person or by proxy, of the
holders of a majority of the shares of Common Stock entitled to vote at the
Annual Meeting is necessary to constitute a quorum for the conduct of business
at the Annual Meeting. Shares of Common Stock that are voted to abstain from
any business coming before the Annual Meeting and broker/nominee non-votes will
be counted as being in attendance at the Annual Meeting for purposes of
determining whether a quorum is present.

Employees participating in the Keystone Consolidated Industries, Inc.
Deferred Incentive Plan, who are beneficial owners of Common Stock of the
Company under such plan, may use the enclosed card to instruct the plan trustees
how to vote the shares held for such employees, and the trustees will, subject
to the plan, vote such shares in accordance with such instructions.

Mellon Securities Trust Company ("Mellon"), the transfer agent and
registrar for the Common Stock, has been appointed by the Board of Directors to
receive proxies, tabulate the vote and serve as Inspector of Election at the
Annual Meeting. All proxies and ballots delivered to Mellon shall be kept
confidential by Mellon in accordance with the Company's bylaws.

The cost of preparing, printing, assembling and mailing this Proxy
Statement and other material furnished to stockholders in connection with the
solicitation of proxies will be borne by Keystone. In addition to the
solicitation of proxies by use of the mails, officers, directors, and employees
of Keystone may solicit proxies by written communication, telephone or personal
calls for which such persons will receive no special compensation.
AGENDA ITEM 1

ELECTION OF DIRECTORS

The terms of all directors expire at the Annual Meeting. As provided in
the bylaws, the Board of Directors shall consist of not less than five and not
more than nine persons, as determined by the Board of Directors from time to
time. The number of directors is currently seven. The Certificate of
Incorporation, as amended, currently provides that stockholders may cumulate
their votes when voting for directors. Although the Board of Directors is
proposing to amend the Certificate of Incorporation to eliminate cumulative

voting, the amendment will not be voted on until after the election of
directors. Therefore, at this Annual Meeting, cumulative voting will continue
to apply.

Cumulative voting entitles stockholders to one (1) vote for each share of
Common Stock held multiplied by the number of nominees to be elected to the
Board. With respect to the election of directors, stockholders may cast all
such votes for a single nominee or distribute their votes among the nominees as
they may determine. If the number of votes cast by a stockholder exceeds the
number authorized for that stockholder on the list of stockholders of record,
then such votes will be pro-rated as that stockholder's proxy card or ballot
designates. A vote marked "withheld" from a nominee or nominees on the proxy
will not be treated as an indication to vote cumulatively and such vote will not
be cast for another nominee or nominees unless the stockholder so indicates in
writing that such withheld vote is to be cast for another nominee or nominees.
The persons designated as agents in the proxy, unless otherwise specified, will
vote the shares covered thereby at the Annual Meeting "For" the nominees named
below pro-rata.

The nominees receiving a plurality of the votes of the shares present in
person or represented at the Annual Meeting and entitled to vote will be elected
for a term expiring at the annual meeting in 1996 and until their successors are
duly elected and qualified (except in cases where no successor is elected due to
to a reduction in the size of the Board), or earlier resignation, removal from
office, death or incapacity. The Board of Directors, however, has proposed an
amendment to the Company's Certificate of Incorporation which, if approved, will
provide for the classification of the Board of Directors into three (3) classes
of directors with staggered terms of office. If this proposed amendment to the
Certificate of Incorporation is approved, then, upon the filing of the amendment
with the Secretary of State of the State of Delaware, the directors of the
Company will be divided into three classes of directors. Harold C. Simmons and
his affiliates hold approximately 68% of the outstanding shares of Common Stock
as of the Record Date and have indicated their intention to vote such shares
"For" the approval of each of the proposed amendments to the Certificate of
Incorporation. Therefore, it is expected to pass. The Class I Directors will
serve as directors for the term expiring at the annual meeting in 1996; Class II
Directors will serve for a term expiring at the annual meeting in 1997; and
Class III Directors will serve for a term expiring at the annual meeting in
1998; and, in each case, until their successors are duly elected and qualified
(except in cases where no successor is elected due to a reduction in the size of
the Board) or until earlier resignation, removal from office, death or
incapacity. The class that each nominee will become a member of if the nominee
is elected to the Board of Directors and the proposed amendment to classify the
Board of Directors is approved is indicated below. For information regarding
the proposed amendment to classify the Board of Directors, see "Proposed
Amendment to the Certificate of Incorporation to Classify the Board of
Directors" below.

All the nominees set forth below have consented to serve if elected to the
Board of Directors. If any individual nominated for a directorship is not
available for election, which is not anticipated, votes will be cast by the
proxy holder for such substitute nominee as shall be designated by the Board of
Directors. The following biographical information has been provided by the
nominees for election to the Board of Directors of the Company:

THOMAS E. BARRY DIRECTOR SINCE 1989

Dr. Barry, 52, is Associate Dean for Academic Affairs and has been a
Professor of Marketing of the Edwin L. Cox School of Business, Southern
Methodist University since prior to 1990. If the proposed amendment to classify
the Board of Directors is approved, Mr. Barry will be classified as a Class II
director with a term expiring at the annual meeting in 1997.

PAUL M. BASS, JR. DIRECTOR SINCE 1989

Mr. Bass, 60, is Vice Chairman of First Southwest Company, a privately
owned 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., all
companies with publicly traded securities outstanding. Mr. Bass is currently
serving as a member of the Executive Committee of Zale-Lipshy University
Hospital and as Chairman of the Board of Trustees of Southwestern Medical
Foundation. If the proposed amendment to classify the Board of Directors is
approved, Mr. Bass will be classified as a Class III director with a term
expiring at the annual meeting in 1998.

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, both
companies with publicly traded securities. 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. If the
proposed amendment to classify the Board of Directors is approved, Mr. Connor
will be classified as a Class III director with a term expiring at the annual
meeting in 1998.

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 privately owned diversified holding company, which
may be deemed to be the beneficial holder of approximately 63% 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 and all of which have outstanding securities which
are publicly traded. If the proposed amendment to classify the Board of
Directors is approved, Mr. Simmons will be classified as a Class I director with
a term expiring at the annual meeting in 1996.

DONALD A. SOMMER DIRECTOR SINCE 1962

Mr. Sommer, 67, served as a Vice President of the Company prior to his
retirement in 1982. If the proposed amendment to classify the Board of
Directors is approved, Mr. Sommer will be classified as a Class III director
with a term expiring at the annual meeting in 1998.

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 privately owned
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, all of which have outstanding publicly traded
securities. If the proposed amendment to classify the Board of Directors is
approved, Mr. Tucker will be classified as a Class I director with a term
expiring at the annual meeting in 1996.

RICHARD N. ULLMAN DIRECTOR SINCE 1992

Mr. Ullman, 61, is President of Federal Companies, a privately held
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., both of which have outstanding
publicly traded securities, 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. If the proposed
amendment to classify the Board of Directors is approved, Mr. Ullman will be
classified as a Class II director with a term expiring at he annual meeting in
1997.
AGENDA ITEM 2

PROPOSALS WITH RESPECT TO
APPROVAL OF AMENDMENTS TO AND
RESTATEMENT OF THE COMPANY'S
CERTIFICATE OF INCORPORATION

General

The Board of Directors of the Company proposes to amend and restate the
Certificate of Incorporation of the Company in the form attached as Appendix A
hereto (the "Restated Certificate"). The proposed amendments are as follows:
(1) to replace the purposes clause with a simplified and more general statement
of purpose; (2) to eliminate the right of stockholders to cumulate votes in the
election of directors; (3) to classify the Board of Directors into three classes
of directors with three-year terms; (4) to reduce the requisite stockholder vote
required in connection with any sale, lease or exchange of all of the property
and assets of the Company; (5) to reduce the requisite stockholder vote to
approve future amendments to the Certificate of Incorporation; and (6) to
restate the Company's Certificate of Incorporation.

Each of the proposed amendments to the Certificate of Incorporation will be
voted upon separately. Each of the proposed amendments will be adopted only if
it receives the affirmative vote of the holders of shares representing two-
thirds (66.67%) of the outstanding shares of Common Stock of the Company
entitled to notice of, and to vote at, the Annual Meeting. If each of the
amendments is approved, the Restated Certificate will become effective upon its
filing with the Secretary of State of the State of Delaware. If some but not
all of the proposed amendments are approved, the amendments that are approved
will become effective upon the filing of a Certificate of Amendment to the
Certificate of Incorporation of the Company reflecting those amendments that are
approved.

HAROLD C. SIMMONS AND HIS AFFILIATES HOLD APPROXIMATELY 68% OF THE
OUTSTANDING SHARES OF COMMON STOCK AS OF THE RECORD DATE AND HAVE INDICATED
THEIR INTENTION TO VOTE SUCH SHARES "FOR" THE APPROVAL OF EACH OF THE PROPOSED
AMENDMENTS TO THE CERTIFICATE OF INCORPORATION.

Proposal to Amend the Certificate of Incorporation to Change the Purposes Clause

The current purposes clause of the Certificate of Incorporation, which has
been in effect for many years, details numerous activities in which the Company
may legally engage. Under current Delaware law, this specific enumeration of
business functions is no longer necessary, and a brief statement of business
purpose suffices. The proposed amendment to the purposes clause contained in
Article THIRD of the Restated Certificate would not extend or restrict the
Company's current operations, but would generally permit any kind of corporate
activity as long as it is lawful. While the Company is not engaging in any
business activity that would not be permitted by the current purposes clause and
does not have any present intention to engage in any such activity, the Board of
Directors believes the more general purposes clause is in accord with modern
practice. The Board of Directors believes that this proposed amendment affects
all stockholders equally.

otherwise specified, the agents designated in the proxy will vote the shares
covered hereby at the Annual Meeting "For" the approval of this proposal.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS PROPOSAL AND DEEMS
THIS PROPOSAL TO BE IN THE BEST INTEREST OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.

Proposal to Amend the Certificate to Eliminate Cumulative Voting

Article FOURTH of the Company's Certificate of Incorporation presently
permits stockholders to cumulate votes in the election of directors.
Specifically, the third paragraph of Article FOURTH provides as follows:

At all elections of directors of the corporation, each holder of
Common Stock entitled to vote at such election shall be entitled to as
many votes as shall equal the number of his shares of Common Stock
multiplied by the number of directors to be elected, and he may cast
all of such votes for a single director or may distribute them among
the number to be voted for, or any two or more of them, as he may see
fit. In respect of all other matters as to which the vote or consent
of stockholders of the corporation shall be required to be taken, the
holders of Common Stock shall be entitled to one vote for each share of
stock held by them.

Cumulative voting permits holders of shares of Common Stock to cast, for
any one or more nominees for the Board, a number of votes equal to the product
of the number of shares such stockholder owns and the number of nominees
proposed for election to the Board. Thus, by casting all of their votes for one
nominee, minority stockholders may succeed in electing one or more nominees to
the Board who would not otherwise have received sufficient votes to be elected.
The right to cumulative voting has not been a factor in past elections of the
Board of Directors.

Subject to stockholder approval, the Board of Directors proposes to amend
Article FOURTH by eliminating in its entirety the above-quoted third paragraph
thereof. The Board believes that the benefit of allowing minority stockholders
the possibility of electing a Board representative is outweighed by the burden
and expense of administering cumulative voting and the risk that an individual
may seek to be elected to the Board of Directors merely to represent the
interest of a minority stockholder or minority stockholder group as opposed to
the interests of all stockholders.

Eliminating cumulative voting eliminates the possibility that one or more
minority stockholders could elect a director without the support of a majority
of the stockholders. This eliminates the possibility that a minority
stockholder could elect a director for the purpose of presenting the minority
stockholder's perspective to the whole Board of Directors. At the same time,
this eliminates the possibility that a minority stockholder could elect a
director for the purpose of disrupting the Board of Directors (and, therefore,
the Company) or for the purpose of pursuing a personal agenda not in the best
interest of the Company and its stockholders (including its other minority
stockholders). The Board of Directors believes that elimination of cumulative
voting is in the best interest of the Company and its stockholders as a whole.

Harold C. Simmons through his affiliates, may be deemed as of the Record
Date to be the beneficial owner of approximately 68% of the outstanding shares
of Common Stock, and currently may be deemed to have the voting power to elect a
majority of the Company's directors and, if the proposal to eliminate cumulative
voting is approved, will have the voting power to elect the entire Board of
Directors of the Company. The proposal to eliminate cumulative voting is not in
response to any effort by a minority stockholder or group of stockholders to
obtain representation on the Board of Directors or to acquire greater influence
in the management of the Company's business, nor is the Company aware of any
such effort.

Adoption of this proposed amendment requires the affirmative vote of the
holders of two-thirds (66.67%) of the outstanding shares of Common Stock of the
Company entitled to notice of, and to vote at, the Annual Meeting. Unless
otherwise specified, the agents designated in the proxy will vote the shares
covered hereby at the Annual Meeting "For" the approval of this proposal.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS PROPOSAL AND DEEMS
THIS PROPOSAL TO BE IN THE BEST INTEREST OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.

Proposal to Amend the Certificate of Incorporation to Classify the Board of
Directors

Under the existing provisions of the Company's Certificate of Incorporation
and Bylaws, directors of the Company are elected annually for terms of one year.
Subject to stockholder approval, the Board of Directors of the Company proposes
to amend Article EIGHTH of the Certificate of Incorporation to provide for the
classification of the Board of Directors into three classes of directors with
staggered terms of office. Specifically, the Board of Directors proposes to add
a new paragraph after the first paragraph of Article EIGHTH that would provide
as follows:

The board of directors shall be divided into three classes, designated
Class I, Class II and Class III, as nearly equal in number as possible,
and the term of office of directors of one class shall expire at each
annual meeting of stockholders, and in all cases as to each director
until his successor shall be elected and shall qualify (except in cases
where no successor is elected due to a reduction in the size of the
board) or until his earlier resignation, removal from office, death or
incapacity. Additional directorships resulting from an increase in the
number of directors shall be apportioned among the classes as equally
as possible. Vacancies, including vacancies created by an increase in
the size of the board of directors, shall be filled by the affirmative
vote of a majority of the remaining board of directors. The initial
term of office of directors of Class I shall expire at the annual
meeting of stockholders in 1996; that of Class II shall expire at the
annual meeting of stockholders in 1997; and that of Class III shall
expire at the annual meeting of stockholders in 1998; and in all cases
as to each director until his successor shall be elected and shall
qualify (except in cases where no successor is elected due to a
reduction in the size of the board) or until his earlier resignation,
removal from office, death or incapacity. At each annual meeting of
stockholders, the number of directors equal to the number of directors
of the class whose term expires at the time of such meeting (or, if
less, the number of directors properly nominated and qualified for
election) shall be elected to hold office until the third succeeding
annual meeting of stockholders after their election. Any director or
the entire board of directors may be removed, with or without cause, by
holders of a majority of the shares then entitled to vote at an
election of directors.

The proposed amendment to classify the Board of Directors provides that the
directors will be classified into three classes, as nearly equal in number as
possible. If the proposed amendment is approved by the stockholders and,
thereafter, is filed with the Secretary of State of the State of Delaware, the
Company's Board of Directors will be classified into three classes. In that
event, each of the directors elected at the Annual Meeting will continue to
serve as a director, but the term of office for all such directors will no
longer be one year. Instead, Class I directors will hold office until the 1996
annual meeting; Class II directors will hold office until the 1997 annual
meeting; and Class III directors will hold office until the 1998 annual meeting;
and, in each case, until their successors are duly elected and qualified (except
in cases where no successor is elected due to a reduction in the size of the
Board), or until earlier resignation, removal from office, death or incapacity.
At each annual meeting commencing with the 1996 annual meeting, directors
elected to succeed those in the class whose terms expire will be elected for
three-year terms so that the terms of one class of directors will expire each
year. Thus, after 1995, stockholders will elect only one-third (or, if one of
the classes has one more or one less director, approximately one-third) of the
directors at each annual meeting. Each director will serve until a successor is
elected and qualified (except in cases where no successor is elected due to a
reduction in the size of the Board), or until earlier resignation, removal from
office, death or incapacity. Vacancies, including vacancies created by an
increase in the size of the Board of Directors, shall be filled by the
affirmative vote of a majority of the entire board. The Board of Directors
presently has no plans, arrangements, commitments or understandings with respect
to increasing or decreasing the size of the board or any class of directors.

If the nominees for election to the Board of Directors at the Annual
Meeting are elected and the amendment to classify the Board of Directors is
thereafter approved, then, upon the filing of the amendment with the Secretary
of State of the State of Delaware, Glenn R. Simmons and J. Walter Tucker, Jr.,
will be members of Class I and will hold office until the 1996 annual meeting;
Thomas E. Barry and Richard N. Ullman will be members of Class II and will hold
office until the 1997 annual meeting; and Paul M. Bass, Jr., David E. Connor,
and Donald A. Sommer will be members of Class III and hold office until the 1998
annual meeting. If any of the above nominees are not elected at the Annual
Meeting, then the person elected instead will become a member of the class of
which the nominee would have been a member had he been elected. If the proposal
to classify the Board of Directors is not approved, all of the directors elected
at the Annual Meeting will serve for a one-year term to expire at the 1996
annual meeting.

For information regarding the nominees for election to the Board of
Directors at the 1995 Annual Meeting see "Election of Directors", above.

The Board of Directors believes that dividing the directors into three
classes is advantageous to the Company and its stockholders. By providing that
directors will serve three-year terms rather than one-year terms, the likelihood
of continuity and stability in leadership and the policies formulated by the
Board of Directors will be enhanced. While management has not experienced any
problems with continuity or stability in the past, it wishes to ensure that this
experience will continue and believes that the staggered election of directors
will promote continuity because only one-third of the directors will be subject
to election each year.

The proposed amendment to classify the Board of Directors may extend the
time required to effect a change in control of the Board of Directors and may
discourage hostile take-over bids for the Company. Without a classified Board
of Directors, a change in control of the Board of Directors can be made by
stockholders holding a majority of the Company's shares at a single annual
meeting. If the Company implements a classified Board of Directors, it may
take at least two annual meetings for a majority of stockholders to effect a
change in control of the Board of Directors, because only a minority of the
directors will be elected at each annual meeting. However, the holders of a
majority of outstanding shares entitled to vote at an election of directors may
remove any or all directors of the Company at any time, with or without cause.

This proposal is not the result of any attempt to accumulate the Company's
securities or to obtain control of the Company by means of a merger, tender
offer, solicitation in opposition to management or otherwise, and the Company is
not aware of any such effort.

If the proposed amendment to classify the board is approved, the
appropriate sections of the Company's Bylaws will be amended by the Board of

Directors to conform to the Restated Certificate and any provisions of the
Company's Bylaws inconsistent with such amendment will be amended as
appropriate.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS PROPOSAL AND DEEMS
THIS PROPOSAL TO BE IN THE BEST INTEREST OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.

Proposal to Amend the Certificate of Incorporation to Reduce the Stockholder
Vote Necessary for Approval of Sale, Lease or Exchange of all of the Company
Assets

Article TENTH of the Company's Certificate of Incorporation currently
requires that any sale, lease or exchange of all of the property or assets of
the Company shall become effective only if authorized by the affirmative vote of
the holders of at least two-thirds (66.67%) of the outstanding shares entitled
to vote in respect thereof. The full text of Article TENTH is set forth below:

TENTH. Any sale, lease or exchange of all of the property and
assets, including good will and corporate franchises of this
corporation, shall not become effective unless authorized by the
affirmative vote of the holders of at least two-thirds of the
outstanding shares entitled to vote at such meeting unless any class of
shares is entitled to vote as a class in respect thereof, in which
event such authorization shall require the affirmative vote of the
holders of at least two-thirds of the outstanding shares or each class
of shares entitled to vote as a class in respect thereof and of the
total outstanding shares entitled to vote at such meeting.

Subject to stockholder approval, the Board of Directors of the Company
proposes to amend the Certificate of Incorporation to eliminate in its entirety
Article TENTH, the result of which will be that the provisions of the General
Corporation Law of the State of Delaware (the "Delaware GCL") will provide the
stockholder vote requirement with respect to transactions of the type addressed
by Article TENTH. Pursuant to Section 271 of the Delaware GCL, a corporation
may sell, lease or exchange all or substantially all of its property and assets,
including its goodwill and its corporate franchises, upon such terms and
conditions as its Board of Directors deems expedient when and as authorized by a
resolution adopted by the holders of a majority of the outstanding stock of the
corporation entitled to vote thereon.

The Board of Directors believes that it is in the best interest of the
Company to eliminate Article TENTH from the Certificate of Incorporation based
on its belief that it is inappropriate that a potential minority of stockholders
has the right to thwart the will of a majority of stockholders with respect to a
transaction of the type governed by Article TENTH. Harold C. Simmons through
his affiliates may be deemed currently to beneficially own in excess of two-
thirds of the outstanding shares of Common Stock and, accordingly, may be deemed
to have the voting power to approve transactions of the type governed by Article
TENTH without the necessity of securing the vote of any other stockholder. In
the future, however, Mr. Simmons and his affiliates may not retain the current
percentage of beneficial ownership of the Common Stock. In such event, the Board
of Directors is concerned that it may be difficult to secure the approval of
two-thirds of the outstanding shares with respect to a transaction governed by
Article TENTH, even though favored by a majority of the outstanding shares.
Stockholder apathy could effectively prohibit the Company from pursuing a
transaction that is otherwise desired by a majority of the Company's
stockholders.

One effect of this proposal, however, will be that Mr. Simmons and his
affiliates will continue to retain the voting power to approve transactions of
the type governed by Article TENTH without the necessity of securing the
approval of other stockholders even if the combined beneficial ownership of the
outstanding Common Stock of Mr. Simmons and his affiliates falls below two-
thirds (but remains in excess of 50% of the outstanding Common Stock).

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS PROPOSAL AND DEEMS
THIS PROPOSAL TO BE IN THE BEST INTEREST OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.

Proposal to Amend the Certificate of Incorporation to Reduce the Stockholder
Vote Necessary for Approval of Amendments to Certificate of Incorporation

The second paragraph of Article TWELFTH of the Company's Certificate of
Incorporation currently provides that amendments to the Certificate of
Incorporation shall only be effective upon the affirmative approval of the
holders of at least two-thirds (66.67%) of the outstanding shares entitled to
vote with respect thereto. The text of the second paragraph of Article TWELFTH
is as follows:

No amendment to the certificate of incorporation of this
corporation shall become effective without receiving at the meeting
called to consider such amendment the affirmative vote of the holders
of at least two-thirds of the outstanding shares entitled to vote at
such meeting unless any class of shares is entitled to vote as a class
in respect thereof, in which event the proposed amendment shall be
adopted upon receiving the affirmative vote of the holders of at least
two-thirds of the outstanding shares of each class of stock entitled to
vote as a class in respect thereof and of the total outstanding shares
entitled to vote at such meeting.

Subject to stockholder approval, the Board of Directors of the Company
proposes to amend the Certificate of Incorporation to eliminate the second
paragraph of Article TWELFTH (which, in the Restated Certificate will be
renumbered as Article TENTH), the result of which will be that the provisions of
the Delaware GCL applicable to the approval of amendments to certificates of
incorporation shall govern the approval of such amendments. Pursuant to Section
242 of the Delaware GCL, amendments to a certificate of incorporation must be
adopted by the board of directors and approved by a majority of the outstanding
stock entitled to vote thereon and a majority of the outstanding stock of each
class entitled to vote thereon as a class. As applied to the Company, Section
242 of the Delaware GCL would require a majority of the outstanding shares of
the Common Stock to be voted in favor of an amendment to the Certificate of
Incorporation as a condition to the adoption of such amendment.

The Board of Directors believes that it is in the best interest of the
Company to eliminate the second paragraph of Article TWELFTH from the
Certificate of Incorporation based on its belief that it is inappropriate that a
potential minority of stockholders has the right to thwart the will of a
majority of stockholders with respect to an amendment to the Certificate of
Incorporation. Mr. Simmons through his affiliates may be deemed to beneficially
own in excess of two-thirds of the outstanding shares of Common Stock as of the

Record Date and, accordingly, may be deemed to have the voting power to effect
amendments to the Certificate of Incorporation without the necessity of securing
the approval of any other stockholder. It is possible, however, that the
percentage of beneficial ownership controlled by Mr. Simmons may change in the
future, and it may be difficult to secure the approval of two-thirds of the
outstanding shares with respect to a proposed amendment to the Certificate of
Incorporation favored by a majority of the stockholders. In the long term, the
Board of Directors believes the proposed reduction in the stockholder vote
requirement for amending the Certificate of Incorporation would offer the
Company greater flexibility in taking advantage of corporate law developments
which may be in the best interest of the Company and its stockholders.

One effect of this proposal, however, will be that Mr. Simmons and his
affiliates will continue to retain the voting power to approve amendments to the
Certificate of Incorporation without the necessity of securing the approval of
other stockholders even if the combined beneficial ownership of the Common Stock
of Mr. Simmons and his affiliates falls below two-thirds (but remains in excess
of 50% of the outstanding Common Stock).

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS PROPOSAL AND DEEMS
THIS PROPOSAL TO BE IN THE BEST INTEREST OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.

Proposal to Restate the Company's Certificate of Incorporation

The Company was incorporated on May 18, 1955, and its Certificate of
Incorporation subsequently has been amended on several occasions. The proposed
Restated Certificate will incorporate into a single document the several
amendments to the original Certificate of Incorporation including each of the
proposed amendments set forth above that receive stockholder approval, and will
amend and update certain provisions of the Certificate of Incorporation.

In addition to effecting the amendments to the Certificate of Incorporation
approved by the stockholders at the Annual Meeting, the proposed Restated
Certificate deletes ineffective and unnecessary provisions and reflects only the
current operative provisions of the Company's Certificate of Incorporation. In
that regard, the Restated Certificate (a) updates the address of the Company's
registered agent in Article SECOND and (b) eliminates reference to the names and
places of residence of the original incorporators of the Company, which
information is not required to be in the Restated Certificate.

THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THIS PROPOSAL AND DEEMS
THIS PROPOSAL TO BE IN THE BEST INTEREST OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS A VOTE "FOR" APPROVAL THEREOF.

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

During the fiscal year ending December 31, 1994, the Board of Directors met
four times. All directors of the Company were present at more than 75% of the
meetings of the Board of Directors and the committees of the Board of Directors
on which they served.

The Board of Directors has a standing Audit Committee and Compensation
Committee. The Audit Committee, which met once during 1994, reviews and
evaluates significant matters relating to the audit and internal controls of the
Company, and reviews the scope and results of audit and non-audit assignments of
the Company's independent accountants. The Audit Committee examines and
recommends for approval the audited financial statements of the Company, and
annually recommends to the Board of Directors the appointment of, and fees paid
to, the independent accountants. Recommendations and actions of the Audit
Committee are reported to the full Board of Directors. The members of the Audit
Committee are Messrs. Bass, Connor and Ullman. The Compensation Committee,
which met once during 1994, reviews and approves the amounts and forms of
compensation paid to executive officers. The present members of the Compen-
sation Committee are Messrs. Barry, Bass, and Sommer.

The Board of Directors does not have a Nominating Committee.

EXECUTIVE OFFICERS

In addition to Glenn R. Simmons and J. Walter Tucker, Jr, the following are
executive officers of Keystone:

HAROLD M. CURDY, 48, is Vice President - Finance and Treasurer of the
Company and has served in such capacities since prior to 1990.

BERT E. DOWNING, JR., 39, 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, 51, 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, 52, 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.

CERTAIN BUSINESS 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 68% 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 trans-
actions 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,
recapitali-zations, 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 (except as otherwise set forth in this Proxy Statement). 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. A copy
of the Intercorporate Services Agreement between Contran and the Company is
included as Exhibit 10.1 in the Company's Annual Report on Form 10-K filed on
February 21, 1995. The fee incurred during 1994 was $640,000. The Company
compensates Tucker & Branham, Inc. for certain consulting services of Mr. Tucker
on an hourly basis as his services are requested. 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.

CERTAIN LITIGATION

Harold C. Simmons, Glenn R. Simmons and certain companies related to
Keystone are parties to the litigation described below.

In November 1991, a purported derivative complaint was filed in the Court
of Chancery of the State of Delaware, New Castle County, (Alan Russell Kahn v.
Tremont Corporation, et al., No. 12339), in connection with the purchase by
Tremont of 7.8 million shares of NL Common Stock from Valhi (the "NL Stock
Purchase"). In addition to Valhi, the complaint names as defendants Tremont and
the members of Tremont's board of directors, including Glenn R. Simmons and
Harold C. Simmons. The complaint alleges, among other things, that the NL Stock
Purchase constitutes a waste of Tremont's assets and that Tremont's board of
directors breached its fiduciary duties to Tremont's public stockholders and
seeks, among other things, to rescind Tremont's consummation of the NL Stock
Purchase and award damages to Tremont for injuries allegedly suffered as a
result of the defendants' wrongful conduct. Glenn R. Simmons and Harold C.
Simmons believe, and understand that the other defendants believe, that the
action is without merit. Glenn R. Simmons and Harold C. Simmons have denied,
and understand that the other defendants have denied, all allegations of
wrongdoing and liability, and intend to defend this action vigorously. A trial
on this matter was held in May 1995 and the defendants are waiting on the Court
of Chancery decision.

SECURITY OWNERSHIP

As of the Record Date, the Company's nominees for directors, directors, the
executive officers named in the Summary Compensation Table below, and the direc-
tors 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.

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) 15,683 -
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)(3)(4)(5) 339,892 6.0%
</TABLE>
________

(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, 12,000, 14,000, and 4,000 shares,
respectively, and the directors and executive officers as a group for the
purchase of 50,220 shares under the Company's stock option plans.

(6) Donald A. Sommer is a first cousin to the spouse of J. Walter Tucker, Jr.

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 the
Record Date.
<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
<S> <C> <C>

Harold C. Simmons 3,830,783(1)(2) 68.0%
5430 LBJ Freeway, Suite 1700
Dallas, Texas 75240

The Killen Group 320,550 5.7%
1189 Lancaster Avenue
Berwyn, Pennsylvania 19312

_______

</TABLE>

(1) The shares of Common Stock shown as beneficially owned by Harold C. Simmons
includes 3,214,233, 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 57.0% and 5.8%, respectively, of
the outstanding Common Stock. Valhi and Tremont are the holders of
approximately 53.2% and 17.8%, respectively, of the outstanding common
stock of NL. Contran holds, directly or indirectly through related
entities, approximately 91.2% and 44.4% 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.

(2) 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.

SECTION 16(A) COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
Keystone's executive officers, directors and persons who own more than 10% of a
registered class of Keystone's equity securities to file reports of ownership
with the Commission, the New York Stock Exchange, and Keystone. Based solely on
the review of the copies of such reports filed with the Commission, Keystone
believes that for 1994 its executive officers, directors and 10% stockholders
complied with all applicable filing requirements under Section 16(a).

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 ("Director 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. Options granted pursuant to the Director Plan become exercisable one
year after the date of grant and expire on the fifth anniversary following the
date of grant. Mr. Simmons' services are made available to the Company pursuant
to the Intercorporate Services Agreement. In addition to director services, Mr.
Tucker provides certain consulting services to the Company for which the Company
pays a company related to Mr. Tucker. See "Certain Business Relationships and
Related Transactions."
EXECUTIVE COMPENSATION

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.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Awards
Restricted Securities
Stock Underlying All Other
Annual Compensation Awards Options Compensation
Name and Principal Position Year Salary ($) Bonus ($) ($)(1) (#) ($)(2)
<S> <C> <C> <C> <C> <C> <C>

Glenn R. Simmons (3) 1994 175,000 - - - -
Chief Executive Officer 1993 149,596 - - 12,500 -
1992 136,135 - - 15,000 -

Harold M. Curdy 1994 132,000 125,000 - - 6,690
Vice President - Finance 1993 125,000 56,250 19,475 5,000 8,362
& Treasurer 1992 125,000 67,500 - - 8,728

Bill J. Johnson 1994 96,560 70,500 - 2,100 6,642
President 1993 93,404 20,976 21,525 2,500 6,695
Sherman Wire Division 1992 98,708 40,495 - - 6,533

James H. Kauffman 1994 167,693 54,600 - - 6,690
President 1993 159,996 - 24,600 5,000 8,994
Keystone Steel & Wire Division 1992 155,767 84,960 - - 8,728

Robert W. Singer 1994 225,000 150,000 - - 6,690
President 1993 200,000 150,000 25,625 10,000 8,994
1992 200,000 150,000 - - 8,728

</TABLE>
(1) The dollar value of the reported grants of restricted Common Stock is based
on the last reported sales price per share on the date of grant of Common
Stock as reported by the New York Stock Exchange Composite Tape.

The total number of shares of restricted Common Stock awarded to each named
executive officer and the aggregate number and value of each named
executive officer's holdings of restricted Common Stock as of December 31,
1994 (at which time the market value was $13.625 per share based on the
last reported sales price per share of Common Stock as reported by the New
York Stock Exchange Composite Tape) were as follows:

<TABLE>
<CAPTION>
Non-Vested Shares of Value of Non-Vested
Total Number of Shares of Restricted Restricted
Restricted Common Stock as of Common Stock as of
Name of Executive Officer Common Stock Awarded December 31, 1994 December 31, 1994
<S> <C> <C> <C>

Glenn R. Simmons - - $ -
Harold M. Curdy 1,900 1,100 14,988
Bill J. Johnson 2,100 1,200 16,350
James H. Kauffman 2,400 1,400 19,075
Robert W. Singer 2,500 1,500 20,438

</TABLE>
The reported shares of restricted Common Stock vest at a rate of 40% after
six months from the date of award, 30% after eighteen months from the date
of the award and 30% after thirty months from the date of the award.

(2) Amounts contributed by the Company to the Company's 401(k) Plan for the
benefit of such executive officer.

(3) 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
represents an allocation of his time devoted to Keystone business under the
Intercorporate Services Agreement between the Company and Contran. See
"Certain Business Relationships and Related Transactions" above.

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.

OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
Number % of Total Potential Realizable
of Options Value at Assumed Annual
Securities Granted to Exercise Rates of Stock Price
Underlying Employees or Base Appreciation for Option
Options in Fiscal Price Expiration Term ($)
Name Granted* Year ($/Share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>

Bill J. Johnson 2,100 43% 10.25 01/13/04 13,537 34,305

</TABLE>
* 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.

AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Options/SARs at FY-End (#) at FY-End ($)(2)
Value
Shares Acquired Realized
Name on Exercise (#) ($) Exercisable Unexercisable (1) Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>

Glenn R. Simmons 22,500 41,587 8,500 19,000 16,778 55,635

Harold M. Curdy 7,500 16,675 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 30,000 66,699 2,000 8,000 9,750 39,000

</TABLE>
(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 Common Stock on December 31, 1994 as reported by the New York
Stock Exchange Composite Tape, less the exercise price of the options.

REPORT ON EXECUTIVE COMPENSATION

COMPENSATION COMMITTEE REPORT

During 1994, matters regarding compensation of executives were administered
by the Compensation Committee (the "Committee"). The Committee is comprised of
directors who are neither officers nor employees of the Company or its
subsidiaries and who are not eligible to participate in any of the employee
benefit plans administered by it. The Committee adopts compensation policies
and is responsible for approving all compensation of executives paid by the
Company.

It is the Company's policy that employee compensation, including
compensation to executives, be at a level which allows the Company to attract,
retain, motivate and reward individuals of training, experience, and ability who
can lead the Company in accomplishing its goals. It is also the Committee's
policy that compensation programs maintain a strong risk/reward ratio, with a
large component of cash compensation being tied to the Company's financial
results, creating a performance-oriented environment that rewards employees for
achieving pre-set financial performance levels. It is the Company's policy to
structure all compensation arrangements to be deductible for federal income tax
purposes under applicable provisions of the Internal Revenue Code.

During 1994, the Company's compensation program with respect to its
executives consisted of three components: base salary, incentive bonus, and
stock option/restricted stock incentive awards.

BASE SALARY

The Committee reviews, in consultation with the Chief Executive Officer
("CEO"), base salaries for executives other than the CEO at least annually. The
Committee approves, with any modifications it deems appropriate, the CEO's
recommendations for base salary levels. Base salaries for all salaried
employees, including executive officers of the Company, have been established on
a position-by-position basis. Annual internal reviews of salary levels are
conducted by the Company's management in an attempt to rank base salary and job
value of each position. The ranges of salaries for comparable positions
considered by management were based upon management's general business knowledge

and no specific survey, study or other analytical process was utilized to
determine such ranges. Additionally, no specific companies' or groups of
companies' compensation were compared with that of the Company, nor was an
attempt made to identify or otherwise quantify the compensation paid by the
companies that served as a basis for such individuals' general business
knowledge. Base salary levels are generally not increased except in instances
of (i) promotions, (ii) increases in responsibility or (iii) unwarranted
discrepancies between job value and the corresponding base salary. The Company
considers general base salary increases from time to time when competitive
factors so warrant. Over a period of years, base salaries are designed to be
below the median annual cash compensation for comparable executives, but when
combined with the other components of compensation create a competitive or above
median total compensation package.

INCENTIVE BONUS PROGRAM

Awards under the Company's incentive bonus program represent a significant
portion of an executive's potential annual cash compensation and are awarded at
the discretion of the Committee on recommendation of the CEO. Annual
performance reviews are an important factor in determining management's
recommendation through the CEO which is primarily based on each individual's
performance and, to a lesser extent, on the Company's overall performance. No
specific financial or budget tests were applied in the measurement of individual
performance. The executive's performance is typically measured by the ability
the executive demonstrates in performing, in timely and cost efficient manner,
the functions of the executive's position. The Company's overall performance is
typically measured by the Company's historical financial results. No specific
overall performance measures were used and there is no specific relationship
between overall Company performance and an executive's incentive bonus.

STOCK OPTIONS/RESTRICTED STOCK

An integral part of the Company's total compensation program is non-cash
incentive awards in the form of stock options, stock appreciation rights (SARs)
and restricted stock granted to executives. Stock option grants, in particular,
are considered an essential element of the Company's total compensation package
for the executives. The Committee believes that stock options, SARs and
restrictive stock awards provide an earnings opportunity based on the Company's
success measured by Common Stock performance. Additionally, awards establish an
ownership perspective and encourage the retention of executives. Incentive
stock options are granted at a price not less than 100% of the fair market value
of such stock on the date of grant. The exercise price of all options and the
length of period during which the options may be exercised are determined by the
Compensation Committee. The Compensation Committee also considers the number
of stock options already outstanding in granting new stock options. During
1994, a grant was made to one executive based on his prior year's performance.
No options have been granted to any executive based on 1994 performance.

COMPENSATION OF CEO

The services of the CEO were provided pursuant to the terms of the Inter-
corporate Services Agreement with Contran Corporation ("Contran ISA"). The
Board of Directors considered and approved the terms of the Contran ISA,
pursuant to which the services of Glenn R. Simmons, the Company's Chief
Executive Officer, were provided. The CEO is not a salaried employee of the
Company and does not participate in the Company's incentive bonus program.

The foregoing report is submitted by the members of the Compensation
Committee of the Board of Directors.

Dr. Thomas E. Barry
Paul M. Bass
Donald A. Sommer, Chairman

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Except for Mr. Sommer who retired as Vice President of the Company in 1982,
no member of the Compensation Committee is or has been an officer or employee of
the Company or any of its subsidiaries. In 1994, no executive officer of the
Company served on the compensation committee or as a director of another entity,
one of whose executive officers served on the Company's Compensation Committee
or Board of Directors.

PERFORMANCE GRAPH

The following graph reflects a comparison of the cumulative total return of
the Common Stock from December 31, 1989 through December 31, 1994 with the
Standard & Poor's 500 Composite Index and the Standard & Poor's Steel Index.
The comparison for each of the periods assumes that the value of the investment
in the Common Stock and each index was $100 on December 31, 1989 and that all
dividends were reinvested.

COMPARISON OF FIVE YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN AMONG
KEYSTONE CONSOLIDATED INDUSTRIES, INC., S&P500, AND S&P STEEL INDEX

(Performance graph goes here.)
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>

Keystone $100 $73 $72 $67 $69 $92
S&P 500 $100 $97 $126 $136 $150 $152
S&P Steel $100 $82 $99 $128 $166 $160
</TABLE>

PENSION PLAN

Keystone maintains several qualified, noncontributory defined benefit plans
which provide defined retirement benefits to eligible employees including
executive officers. Normal retirement age under the Company's pension plans is
age 65. 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% multi-
plied 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.

INDEPENDENT PUBLIC ACCOUNTANTS

Coopers & Lybrand, independent public accountants, have audited the
Company's financial statements and are currently expected to be retained to
audit the financial statements for 1995. Representatives of Coopers & Lybrand
will be present at the Annual Meeting and will have an opportunity to make a
statement if they desire to do so and will be available to respond to
appropriate questions.

STOCKHOLDER PROPOSALS

Stockholders may submit proposals on matters appropriate for stockholder
action at the Company's annual meetings, subject to regulations adopted by the
Securities and Exchange Commission. The Company presently intends to call the
next annual meeting during May 1996. For such proposals to be considered for
inclusion in the Proxy Statement and form of proxy relating to the 1996 annual
meeting, they must be received by the Company not later than December 1, 1995.
Such proposals should be addressed to Secretary, Keystone Consolidated
Industries, Inc., Three Lincoln Centre, 5430 LBJ Freeway, Suite 1740, Dallas,
Texas 75240.

OTHER MATTERS

Management does not intend to present, and has no information as of the
date of preparation of this Proxy Statement that others will present, any
business at the Annual Meeting other than business pertaining to matters set
forth in the Notice of Annual Meeting of Stockholders and this Proxy Statement.
However, if other matters requiring the vote of the stockholders properly come
before the meeting, it is the intention of the persons named in the enclosed
form of proxy to vote the proxies held by them in accordance with their best
judgment on such matters.

KEYSTONE CONSOLIDATED INDUSTRIES, INC.

July 27, 1995

A COPY OF KEYSTONE'S 1994 FORM 10-K ANNUAL REPORT, AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION, IS INCLUDED IN KEYSTONE'S 1994 ANNUAL REPORT
TO SHAREHOLDERS WHICH WAS PREVIOUSLY DISTRIBUTED TO STOCKHOLDERS. ADDITIONAL
COPIES ARE AVAILABLE WITHOUT CHARGE BY WRITING TO SECRETARY, KEYSTONE
CONSOLIDATED INDUSTRIES, INC., 5430 LBJ FREEWAY, SUITE 1740, DALLAS, TEXAS
75240.

APPENDIX A

RESTATED CERTIFICATE OF INCORPORATION
OF
KEYSTONE CONSOLIDATED INDUSTRIES, INC.

Keystone Consolidated Industries, Inc. a corporation organized and existing
under and by virtue of the laws of the State of Delaware,

DOES HEREBY CERTIFY:

That the present name of the corporation is Keystone Consolidated
Industries, Inc. The corporation was originally incorporated under the name
Keysteel, Inc. and its original certificate of incorporation was filed with the
Secretary of State of the State of Delaware on May 18, 1955.

That by written consent of the entire Board of Directors of said
corporation, pursuant to Section 141(f) of the General Corporation Law of the
State of Delaware (the "GCL"), resolutions were duly adopted setting forth a
proposed restated certificate of incorporation of said corporation (the
"Restated Certificate of Incorporation"), which Restated Certificate of
Incorporation reflected certain amendments to the certificate of incorporation
of the Corporation, declaring said Restated Certificate of Incorporation and the
amendments reflected therein to be advisable and approving its submission to the
stockholders of the corporation for consideration thereof.

That thereafter, pursuant to resolution of its Board of Directors, an
Annual Meeting of the stockholders of the corporation was duly called and held,
upon notice in accordance with Section 222 of the GCL, at which meeting more
than two-thirds of the outstanding shares entitled to vote at such meeting were
voted in favor of the Restated Certificate of Incorporation.

That this Restated Certificate of Incorporation amends and restates the
certificate of incorporation of the corporation, as the same heretofore has been

amended, supplemented and/or restated (the "Certificate of Incorporation"), and
has been duly adopted in accordance with Sections 242 and 245 of the GCL.

That the text of the Certificate of Incorporation is hereby restated and
integrated and further amended to read in its entirety as follows:

FIRST. The name of the corporation is KEYSTONE CONSOLIDATED INDUSTRIES,
INC.

SECOND. The address of the corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust Company.

THIRD. The nature of the business or purpose to be conducted or promoted
is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.

FOURTH. The total number of shares of all classes of stock which the
corporation shall have authority to issue is twelve million five hundred
thousand (12,500,000), of which twelve million (12,000,000) shares are Common
Stock of the par value of One Dollar ($1.00) each and five hundred thousand
(500,000) shares are Preferred Stock without par value.

The Preferred Stock shall be issued in one or more series. The Board of
Directors is hereby expressly authorized to issue the shares of Preferred Stock
in such series and to fix from time to time before issuance the number of shares
to be included in any series and the designation, relative rights, preferences
and limitations of all shares of such series. The authority of the Board of
Directors with respect to each series shall include, without limitation thereto,
the determination of any or all of the following and the shares of each series
may vary from the shares of any other series in the following respects:

(a) The number of shares constituting such series and the designation
thereof to distinguish the shares of such series from the shares of all
other series;

(b) The annual dividend rate on the shares of that series and whether such
dividends shall be cumulative and, if cumulative, the date from which
dividends shall accumulate;

(c) The redemption price or prices for the particular series, if
redeemable, and the terms and conditions of such redemption;

(d) The preference, if any, of shares of such series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
corporation;

(e) The voting rights, if any, in addition to the voting rights prescribed
by law and the terms of exercise of such voting rights;

(f) The right, if any, of shares of such series to be converted into shares
of any other series or class and the terms and conditions of such
conversion; and

(g) any other relative rights, preferences and limitations of that series.

No holder of stock of the corporation shall have any preemptive or other
right whatever, as such holder, to subscribe for or purchase or to have offered
to him for subscription or purchase any additional shares of stock of any class,
character or description which may be issued or sold by the corporation, or
obligations of any kind which may be issued or sold by the corporation and which
shall be convertible into stock of any class of the corporation, or to which
there shall be attached or appertain any warrant or warrants or other instrument
or instruments that shall confer upon the holder of such obligation the right to
subscribe for, or to purchase or receive from the corporation any shares of
capital stock of any class of the corporation, whether now or hereafter
authorized.

FIFTH. The minimum amount of capital with which the corporation will
commence business is One Thousand Dollars ($1,000.00).

SIXTH. The corporation is to have perpetual existence.

SEVENTH. The private property of the stockholders shall not be subject to
the payment of corporate debts to any extent whatever.

EIGHTH. The number of directors of the corporation shall be fixed by the
by-laws, subject to the provisions of this certificate of incorporation and to
the provisions of the laws of the State of Delaware.

The board of directors shall be divided into three classes, designated
Class I, Class II and Class III, as nearly equal in number as possible, and the
term of office of directors of one class shall expire at each annual meeting of
stockholders, and in all cases as to each director until his successor shall be
elected and shall qualify (except in cases where no successor is elected due to
a reduction in the size of the board) or until his earlier resignation, removal
from office, death or incapacity. Additional directorships resulting from an
increase in the number of directors shall be apportioned among the classes as
equally as possible. Vacancies, including vacancies created by an increase in
the size of the board of directors, shall be filled by the affirmative vote of a
majority of the remaining board of directors. The initial term of office of
directors of Class I shall expire at the annual meeting of stockholders in 1996;
that of Class II shall expire at the annual meeting of stockholders in 1997; and
that of Class III shall expire at the annual meeting of stockholders in 1998;
and in all cases as to each director until his successor shall be elected and
shall qualify (except in cases where no successor is elected due to a reduction
in the size of the board) or until his earlier resignation, removal from office
, death or incapacity. At each annual meeting of stockholders, the number of
directors equal to the number of directors of the class whose term expires at
the time of such meeting (or, if less, the number of directors properly
nominated and qualified for election) shall be elected to hold office until the
third succeeding annual meeting of stockholders after their election. Any
director or the entire board of directors may be removed, with or without cause,
by holders of a majority of the shares then entitled to vote at an election of
directors.

In furtherance and not in limitation of the powers conferred by statute,
the board of directors is expressly authorized:

To make, alter, amend or repeal the by-laws of the corporation.

To authorize and cause to be executed mortgages and liens upon the real and
personal property of the corporation.

To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose and to abolish any
such reserve in the manner in which it was created.

By resolution passed by the majority of the whole board, to designate one
or more committees, each committee to consist of two or more of the
directors of the corporations, which, to the extent provided in the
resolution or in the by-laws of the corporation, shall have and may
exercise the powers of the board of directors in the management of the
business and affairs of the corporation, and may authorize the seal of the
corporation to be affixed to all papers which may require it. Such
committee or committees shall have such name or names as may be determined
from time to time by resolution adopted by the board of directors.

NINTH. Meetings of the stockholders may be held outside of the State of
Delaware, if the by-laws so provide. The books of the corporation may be kept
(subject to any provision contained in the statutes) outside of the State of

Delaware at such place or places as may be designated from time to time by the
board of directors or in the by-laws of the corporation.

TENTH. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.

ELEVENTH. A director of the corporation shall not be personally liable to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit. If the Delaware General Corporation Law is amended after
approval by the stockholders of this provision to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as so amended.

Any repeal or modification of the foregoing paragraph by the stockholders
of the corporation shall not adversely affect any right or protection of a
director of the corporation existing at the time of such repeal or modification.
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240

SOLICITED BY THE BOARD OF DIRECTORS
for Annual Meeting of Stockholders

Wednesday, August 16, 1995

The undersigned, being participants in the Keystone Consolidated
Industries, Inc. Deferred Incentive Plan ("Plan"), having received Notice of
Annual Meeting and Proxy Statement dated July 27, 1995 and Annual Report to
Stockholders, hereby instructs the trustee of the Plan, to vote, as specified,
all the shares of common stock of KEYSTONE CONSOLIDATED INDUSTRIES, INC., a
Delaware corporation (the "Company"), held of record by the trustee of the Plan
for the account of the undersigned on the record date, July 17, 1995, at the
Annual Meeting of Stockholders to be held on August 16, 1995, and all
adjournments thereof, as directed and, in their discretion, on all other matters
which may properly come before the Annual Meeting or any adjournments thereof.

(Continued, and to be marked, dated and signed, on the other side)
************
(Back Side)

This Proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 THROUGH 7.

1. Election of Seven Directors

FOR all nominees WITHHOLD AUTHORITY INSTRUCTION: TO WITHHOLD AUTHORITY
listed to right to vote for all FOR ANY SINGLE NOMINEE, STRIKE A
(except as marked nominees listed to LINE THROUGH THE NOMINEE'S NAME
to contrary to right BELOW
right)
Paul M. Bass, David E. Connor, Donald
[ ] [ ] A. Sommer, Thomas E. Barry, Richard
N. Ullman, Walter Tucker, Jr., Glenn
R. Simmons

To cumulate votes, list nominee(s) to
receive cumulative votes and number of
cumulative votes.

________________________ _____

2. Amend Purpose Clause

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

3. Eliminate Cumulative Voting

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

4. Classify Board of Directors

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

5. Reduce Vote to Sell Assets

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

6. Reduce Vote to Amend Certificate of Incorporation

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

7. Restate Certificate of Incorporation

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

Please mark, date and sign exactly as your name appears on this proxy card.
When shares are held jointly, both holders should sign. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If the holder is a corporation or partnership, the full corporate or
partnership name should be signed by a duly authorized officer.

___________________________________
Signature

___________________________________
Signature, if shares held jointly

Date: _______________________, 1995

KEYSTONE CONSOLIDATED INDUSTRIES, INC.

5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240

SOLICITED BY THE BOARD OF DIRECTORS
for Annual Meeting of Stockholders

Wednesday, August 16, 1995

The undersigned, having received Notice of Annual Meeting and Proxy
Statement dated July 27, 1995 and Annual Report to Stockholders, hereby appoints
Ralph P. End and Sandra K. Myers, or either of the, proxies, with full power of
substitution to vote, as specified in this proxy, all the shares of common stock
of KEYSTONE CONSOLIDATED INDUSTRIES, INC., a Delaware corporation (the
"Company"), held of record by the undersigned on the record date, July 17, 1995,
at the Annual Meeting of Stockholders to be held on August 16, 1995, and all
adjournments thereof, as directed and, in their discretion, on all other matters
which may properly come before the Annual Meeting or any adjournments thereof.
The undersigned directs said proxies to vote as specified upon the items shown
on the reverse side, which are referred to in the Notice of Annual Meeting and
set forth in the Proxy Statement.

(Continued, and to be marked, dated and signed, on the other side)
************
(Back Side)

This Proxy when properly executed will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1 THROUGH 7.

1. Election of Seven Directors

To cumulate votes, list nominee(s) to
receive cumulative votes and number of
cumulative votes.

________________________ _____

2. Amend Purpose Clause

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

3. Eliminate Cumulative Voting

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

4. Classify Board of Directors

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

5. Reduce Vote to Sell Assets

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

6. Reduce Vote to Amend Certificate of Incorporation

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

7. Restate Certificate of Incorporation

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

___________________________________
Signature

___________________________________
Signature, if shares held jointly

Date: _______________________, 1995