KEYSTONE CONSOLIDATED INDUSTRIES, INC.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240
April 15, 2002
To Our Stockholders:
You are cordially invited to attend the 2002 Annual Meeting of Stockholders
of Keystone Consolidated Industries, Inc. which will be held on Thursday, May
16, 2002, at 9:00 a.m., local time, at Keystone's corporate offices at Three
Lincoln Centre, 5430 LBJ Freeway, Suite 1740, Dallas, Texas. The matters to be
acted upon at the meeting are described in the attached Notice of Annual Meeting
of Stockholders and Proxy Statement.
Whether or not you plan to attend the meeting, please complete, date, sign
and return the enclosed proxy card or voting instruction form in the
accompanying envelope as promptly as possible to ensure that your shares are
represented and voted in accordance with your wishes. Your vote, whether given
by proxy or in person at the meeting, will be held in confidence by the
inspector of election as provided in Keystone's bylaws.
Sincerely,
Glenn R. Simmons
Chairman of the Board
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
Three Lincoln Centre
5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on May 16, 2002
To the Stockholders of
Keystone Consolidated Industries, Inc.:
The Annual Meeting of Stockholders (the "Annual Meeting") of Keystone
Consolidated Industries, Inc., a Delaware corporation ("Keystone" or the
"Company"), will be held on May 16, 2002, at 9:00 a.m., local time, at the
offices of the Company at 5430 LBJ Freeway, Suite 1740, Dallas, Texas, for the
following purposes:
(1) To elect one director for a term of two years, and until his successor is
duly elected and qualified;
(2) To elect two directors each for a term of three years, and until their
successors are duly elected and qualified; and
(3) 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 March 18, 2002,
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 April
17, 2002, through the time of the Annual Meeting for any purpose germane to the
Annual 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 Annual 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
April 15, 2002
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 May 16, 2002
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
2002 Annual Meeting of Stockholders to be held at 9:00 a.m., local time, on
Thursday, May 16, 2002, at the Company's 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 April 15, 2002. An annual report for the year
ended December 31, 2001 is enclosed herewith.
Only stockholders of record at the close of business on March 18, 2002,
(the "Record Date") will be entitled to vote at the Annual Meeting. As of the
Record Date, there were 10,068,450 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. 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 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 under such
plan, may use the enclosed voting instruction card to instruct the plan trustees
how to vote the shares held for such employees, and the trustees will, subject
to the terms of the plan, vote such shares in accordance with such instructions.
Mellon Investor Services LLC ("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 mail, 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.
Upon request, the Company will reimburse banking institutions, brokerage
firms, custodians, trustees, nominees and fiduciaries for their reasonable
out-of-pocket expenses incurred in distributing proxy materials and voting
instructions to the beneficial owners of Common Stock held of record by such
entities.
ELECTION OF DIRECTORS
Keystone's Restated Certificate of Incorporation provides for the Board of
Directors to be divided into three classes. The bylaws of the Company provide
that 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 Board of Directors has currently set the number of directors at six.
The nominees receiving a plurality of the affirmative votes of the shares
present in person or represented at the Annual Meeting and entitled to vote will
be elected to the classes designated and 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 earlier resignation, removal from office, death or
incapacity. Neither shares as to which authority to vote on the election of
directors has been withheld nor broker/nominee non-votes will be counted as
affirmative votes to elect director nominees to the Board of Directors. However,
since director nominees need only receive the vote of a plurality of the shares
represented at the Meeting and entitled to vote, a vote withheld from a
particular nominee will not affect the election of such nominee.
Except as applicable laws may otherwise provide, the approval of any other
matter that may properly come before the Meeting will require the affirmative
vote of a majority of the shares represented and entitled to vote at the
Meeting. Shares of Common Stock that are voted to abstain from any other
business coming before the Meeting and broker/nominee non-votes will not be
counted as votes for or against any such other matter.
Unless otherwise specified, the agents designated in the proxy card or
voting instruction form will vote the shares represented by a proxy at the
Meeting "FOR" the election of the nominees for director and, to the extent
allowed by the federal securities laws, in the discretion of the agents on any
other matter that may properly come before the Meeting.
All of 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.
Contran and related entities hold approximately 49.6% of the outstanding
shares of Common Stock as of the Record Date and have indicated their intention
to vote such shares "FOR" the election of all of the nominees for director as
set forth in this Proxy Statement. If such shares are represented and voted as
indicated at the Meeting and all other outstanding shares of Common Stock are
represented and voted at the Annual Meeting, the additional affirmative vote of
approximately 0.4% or more of the outstanding shares of Common Stock will assure
the election of each of the nominees for director. In addition, if a quorum is
present, all such nominees will be elected if no other person receives the
affirmative vote of more shares than the number of shares voted by Contran and
its related entities.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES
FOR THE BOARD OF DIRECTORS SET FORTH BELOW.
NOMINEES FOR BOARD OF DIRECTORS
The following biographical information has been provided by the nominees
for election to the Board of Directors of the Company for terms expiring at the
2004 or the 2005 annual meeting of stockholders:
J. WALTER TUCKER, JR. Director since 1971
Mr. Tucker, age 76, is Vice Chairman of the Board of Directors of the
Company and has served in such capacity since prior to 1997. Mr. Tucker has
served as a Director, President, and Chief Executive Officer of Tucker &
Branham, Inc., a privately owned real estate, mortgage banking and insurance
firm since prior to 1997. Mr. Tucker is also a director of Valhi, Inc.
("Valhi"), a publicly held diversified holding company affiliated with Keystone.
Since prior to 1997, he has also been an executive officer and/or director of
various companies related to Valhi and Contran Corporation, a privately owned
diversified holding company that is the parent corporation of Valhi and Keystone
("Contran"). Mr. Tucker is a nominee for a term expiring in 2004.
GLENN R. SIMMONS Director since 1986
Mr. Simmons, age 74, is chairman of the board of directors of Keystone and
has served in such capacity since prior to 1997. Mr. Simmons was chief executive
officer of Keystone from prior to 1997 to February 1997. Since prior to 1997,
Mr. Simmons has served as vice chairman of the board of directors of Contran.
Mr. Simmons has been a director of Contran and an executive officer and/or
director of various companies related to Contran since prior to 1997. He is vice
chairman of the board of Valhi, chairman of the board of CompX International
Inc. ("CompX"), a manufacturer of ergonomic computer support systems, precision
ball bearing slides and security products that is affiliated with Valhi; a
director of NL Industries, Inc. ("NL"), a titanium dioxide pigments company that
is affiliated with Valhi; a director of Titanium Metals Corporation ("TIMET"), a
company engaged in the titanium metals industry of which Tremont Corporation
("Tremont") owns approximately 39%; and a director of Tremont, Valhi's majority
owned indirect subsidiary that in addition to its holdings in TIMET owns
approximately 21% of NL and interests in land development entities. Valhi,
CompX, NL, Tremont and TIMET may be deemed to be affiliates of Keystone. Mr.
Simmons is a nominee for a term expiring in 2005.
STEVEN L. WATSON Director since 2000
Mr. Watson, age 51, has been president and a director of Valhi and Contran
since 1998. From prior to 1997 to 1998, he served as vice president and
secretary of Valhi and Contran. He is also a director of CompX, NL, TIMET, and
Tremont. Mr. Watson served as an executive officer and/or director of various
companies related to Valhi and Contran since 1980. Mr. Watson is a nominee for a
term expiring in 2005.
OTHER BOARD MEMBERS
The following biographical information has been provided by the directors
whose terms do not expire at the Annual Meeting:
THOMAS E. BARRY Director since 1989
Dr. Barry, age 58, is vice president for executive affairs at Southern
Methodist University and has been a professor of marketing in the Edwin L. Cox
School of Business at Southern Methodist University since prior to 1997. Dr.
Barry is also a director of Valhi. Dr. Barry's term as a director expires in
2003.
PAUL M. BASS, JR. Director since 1989
Mr. Bass, age 66, is vice chairman of First Southwest Company, a privately
owned investment banking firm, and has served in such capacity since prior to
1997. Mr. Bass is also a director of CompX, Chairman of MorAmerica Private
Equities Company; and director and chairman of the audit committee of California
Federal Bank and Golden State Bancorp Inc. Mr. Bass is currently serving as
chairman of Zale-Lipshy University Hospital and St. Paul University Hospital and
as chairman of the board of trustees of Southwestern Medical Foundation. Mr.
Bass term as a director expires in 2004.
WILLIAM SPIER Director since 1996
Mr. Spier, age 67, is president and chairman of Sutton Holding Corp., a
private investment firm, and has served in such capacity since prior to 1997.
Mr. Spier is chairman of the board of Empire Resources, Inc. and has served in
such capacity since September 1999. Mr. Spier's term as a director expires in
2003.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended December 31, 2001, the Board of Directors met
six 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 Executive Committee, which did not meet during 2001, exercises all
powers and authority of the Board of Directors in the management of the business
and affairs of the Company, to the extent permitted by Delaware law, when a
meeting of the Board of Directors is not possible. The members of the Executive
Committee are Messrs. Bass (chairman), Simmons, Spier and Tucker.
The Master Trust Committee, which did not meet during 2001, exercises the
powers, rights and responsibilities included under Articles 3 and 10 of the
Keystone Consolidated Industries, Inc. Master Retirement Trust. The members of
the Master Trust Committee are Messrs. Bass and Tucker.
The Audit Committee, which met twice during 2001, 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 principal responsibilities of the Audit
Committee are to serve as an independent and objective party to review the
Company's auditing, accounting and financial reporting processes. For further
information on the role of the Audit Committee, see "Independent Auditor
Matters--Audit Committee Report." The members of the Audit Committee are Messrs.
Bass (chairman), Barry and Spier.
The Compensation Committee, which met once during 2001, reviews and
approves the amounts and forms of certain compensation paid to executive
officers. The members of the Compensation Committee are Messrs. Barry (chairman)
and Bass.
The Board of Directors does not have a Nominating Committee.
It is anticipated that the members of the standing committees will be
elected at the annual meeting of the Board of Directors immediately following
the Meeting. The Board of Directors has previously established, and from time to
time may establish, other committees to assist it in the discharge of its
responsibilities.
COMPENSATION OF DIRECTORS
Directors of Keystone receive an annual retainer of $15,000, a fee of $750
per day for each Board of Directors meeting and/or committee meeting attended,
and reimbursement for reasonable expenses incurred in attending Board of
Directors and/or committee meetings. Messrs. Glenn R. Simmons and Steven L.
Watson ceased receiving fees for serving as a director November 1, 2001. The
Keystone Consolidated Industries, Inc. 1997 Long-Term Incentive Plan provides
for awards or grants of stock options, stock appreciation rights, restricted
stock, performance grants and other awards to key individuals, including
directors, performing services for the Company or its subsidiaries. Under the
1997 Long-Term Incentive Plan, directors are annually granted stock options
exercisable for 1,000 shares of Common Stock. These options have an exercise
price equal to the closing sales price of Common Stock on the date of grant,
have a term of ten years and fully vest on the first anniversary of the date of
grant. The directors waived their rights to their 2001 annual grant of stock
options, and, accordingly, no annual grants were made in 2001. In addition to
serving as directors, Messrs. Simmons, Watson and Tucker provide consulting
services to the Company. The Company pays Contran for the consulting services
provided by Messrs. Simmons and Watson pursuant to the Intercorporate Services
Agreement between Contran and the Company (the "Intercorporate Services
Agreement"). The Company pays Tucker & Branham for the consulting services
provided by Mr. Tucker. See "Certain Business Relationships and Related
Transactions."
EXECUTIVE OFFICERS
In addition to Glenn R. Simmons as chairman of the board and J. Walter
Tucker, Jr. as vice chairman, the following are currently executive officers of
Keystone:
DAVID L. CHEEK, age 52, is president of the Company and has served in such
capacity since October 2001. Mr. Cheek has served as president, Keystone Steel &
Wire, a division of the Company, since March 2000 and was vice president of
manufacturing, Keystone Steel & Wire, from March 1999 to March 2000. He was vice
president of operations, Atlantic Steel, Atlanta, Georgia from 1996 to 1999.
HAROLD M. CURDY, age 54, has served as vice president - finance of the
Company since May 2001. He served as vice president - finance and treasurer
since prior to 1997 to May 2001.
BERT E. DOWNING, JR., age 45, is vice president - corporate controller and
treasurer of the Company and has served in such capacities since May 2001. He
served as vice president and corporate controller since March 2000 and as
corporate controller since prior to 1997.
SANDRA K. MYERS, age 58, has served as corporate secretary of the Company
and as executive secretary of Contran since prior to 1997.
EXECUTIVE COMPENSATION
The Summary Compensation Table set forth below provides information
concerning annual and long-term compensation paid by the Company for services
rendered in all capacities to Keystone and its subsidiaries during 2001, 2000,
and 1999 by each person who was the chief executive officer of Keystone during
2001 and each of the three other most highly compensated individuals who were
executive officers of Keystone at December 31, 2001 (the "named executive
officers").
Summary Compensation Table
Long-Term
Annual Compensation Compensation
Other Awards
Annual Securities All Other
Name and Compensation Underlying Compensation
Principal Position Year Salary ($) Bonus ($) ($)(1) Options (#) ($)(2)
- ------------------ ---- ---------- --------- --------------------- ----------- -------------
David L. Cheek (3)(4) 2001 203,388 -0- - 0 - - 0 - 1,534
President 2000 173,269 -0- 235,280 27,000 3,400
Harold M. Curdy 2001 190,000 -0- - 0 - -0- 2,444
Vice President - Finance 2000 190,000 -0- - 0 - -0- 10,155
1999 198,925 50,000 - 0 - 20,000 19,352
Bert E. Downing, Jr. 2001 170,000 -0- - 0 - -0- 1,918
Vice President - Corporate 2000 170,000 -0- - 0 - 15,000 4,758
Controller and Treasurer 1999 151,093 -0- - 0 - 10,000 9,147
Robert W. Singer (5) 2001 300,000 -0- - 0 - -0- 20,898
Former President and 2000 300,000 -0- - 0 - 25,000 28,267
Chief Executive Officer 1999 297,579 -0- - 0 - 75,000 61,348
(1) An amount for other annual compensation is disclosed only if the amount for
other annual compensation exceeds the level required for reporting pursuant
to Securities and Exchange Commission (the "SEC") rules.
(2) All other compensation for the last three years for each of the following
named executive officers consisted of (i) the Company's matching
contributions pursuant to the Company's 401(k) Plan; and (ii) accruals to
unfunded reserve accounts attributable to certain limits under the Code
with respect to the 401(k) Plan and Keystone's pension plan, which amounts
are payable upon the named executive officer's retirement, the termination
of his employment with the Company or to his beneficiaries upon his death;
as follows:
Unfunded Reserve Account Accruals
Interest
Account Accruals Accruals
Employer's Related to 401(k) Above 120%
Named 401(k) and Pension Plan of the AFR
Executive Officer Year Contribution (a) Limitations Rate (b) Total
David L. Cheek 2001 $ -0- $1,534 $ -0- $1,534
2000 3,400 -0- -0- 3,400
Harold M. Curdy 2001 -0- 1,307 1,137 2,444
2000 3,400 5,488 1,267 10,155
1999 8,000 10,945 407 19,352
Bert E. Downing, Jr. 2001 -0- 1,845 73 1,918
2000 3,400 1,311 47 4,758
1999 8,000 1,147 -0- 9,147
Robert W. Singer 2001 -0- 14,418 6,480 20,898
2000 3,400 17,136 7,731 28,267
1999 8,000 50,538 2,810 61,348
(a) The Company did not make a matching contribution to the 401(k) plan
for 2001. The Company's matching contribution to the 401(k) plan for
2000 was made in cash. The Company's matching contributions to the
401(k) plan for 1999 was made in Common Stock valued at $5.9375/share.
(b) The balance of these unfunded reserve accounts accrues interest at an
annual rate in effect from time to time equal to two percent above the
base rate on corporate loans. Pursuant to the rules of the SEC, the
amounts shown represent the portion of the interest accruals to the
unfunded reserve accounts that exceeds 120% of the applicable federal
long-term rate as prescribed by the Code (the "AFR Rate"). The AFR
Rate used for such computations was the AFR Rate in effect on December
31, 2001, December 31, 2000, and December 31, 1999, the date the
interest accruals for 2001, 2000 and 1999, respectively, were credited
to the unfunded reserve accounts.
(3) Mr. Cheek became an executive officer of Keystone as of March 24, 2000.
(4) Mr. Cheek's other annual compensation consists of certain relocation
expenses the Company paid on his behalf, which includes an amount to pay
his related income taxes on Keystone's payment of certain of his relocation
expenses.
(5) Mr. Singer resigned his positions with Keystone as of October 29, 2001.
No stock options were granted to the named executive officers during 2001.
The following table provides information, with respect to the named executive
officers, concerning the value of unexercised stock options held as of December
31, 2001. In 2001, no named executive officer exercised any stock options.
Aggregated Options/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Options/SARs at December 31, 2001(#) at December 31, 2001 ($)(1)
------------------------------------ ------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
David L. Cheek 19,000 23,000 0 0
Harold M. Curdy 53,333 6,667 0 0
Bert E. Downing, Jr. 28,667 13,333 0 0
Robert W. Singer 108,333 41,667 0 0
(1) The values shown in the table are based on the $.65 per share closing price
of the Common Stock on December 31, 2001, as reported by the OTC Bulletin
Board, less the exercise price of the options.
Pension Plan
Keystone maintains a qualified, noncontributory defined benefit plan which
provides defined retirement benefits to various groups of eligible employees
including executive officers. Normal retirement age under the Company's pension
plan is age 65. The defined benefit for salaried employees, including officers,
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 Summary Compensation Table,
assuming continued employment with the Company until normal retirement age at
current salary levels are: David L. Cheek, $36,847; Harold M. Curdy, $55,864;
and Bert E. Downing, Jr., $59,921.
SECURITY OWNERSHIP OF MANAGEMENT
As of March 18, 2002, the Company's directors, the executive officers named
in the Summary Compensation Table above, and the directors and executive
officers as a group, beneficially owned, as defined by the rules of the SEC, the
shares of Common Stock shown in the following table.
Amount and Nature of Beneficial Ownership(1)
Shares of Percent
Name of Common of
Beneficial Owner Stock Class (2)
Thomas E. Barry (3)(4) 9,000 -
Paul M. Bass, Jr. (3)(4) 14,000 -
David L. Cheek (5) 33,000 -
Harold M. Curdy (5) 72,412 -
Bert E. Downing, Jr. (5) 39,007 -
Glenn R. Simmons (4)(5)(6) 270,150 2.6
Robert W. Singer (5) 208,653 2.0
William Spier (3) 386,262 3.8
J. Walter Tucker, Jr. (3)(4) 160,450 1.6
Steven L. Watson (3)(4) 3,250 -
All directors and current executive officers as a
group (10 persons) (3)(4)(5)(6)(7) 1,013,131 9.7
- ---------
(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 SEC.
(2) Percentage omitted if less than 1%.
(3) 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, Spier, Tucker and Watson for the purchase of 7,000, 7,000, 7,000,
7,000 and 1,000 shares, respectively, pursuant to the 1997 Long-Term
Incentive Plan.
(4) Excludes certain shares that such individual may be deemed to indirectly
and beneficially own as to which such individual disclaims beneficial
ownership. See footnote (2) to the "Security Ownership of Certain
Beneficial Owners" table.
(5) Includes shares that such person could acquire upon the exercise of options
exercisable within 60 days of the Record Date by Messrs. Cheek, Curdy,
Downing, Simmons, and Singer for the purchase of 33,000, 60,000, 37,000,
154,500, and 141,667 shares, respectively, pursuant to the Company's
various stock option plans.
(6) Glenn R. Simmons is a brother of Harold C. Simmons. See footnote (2) to the
"Security Ownership of Certain Beneficial Owners" table.
(7) In addition to the foregoing, the shares of Common Stock shown as
beneficially owned by the directors and executive officers of Keystone as a
group include 22,000 shares that the remaining executive officers of
Keystone have the right to acquire upon the exercise within 60 days
subsequent to the Record Date of stock options granted pursuant to the
Company's stock option plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth the stockholders known to the Company to be
the beneficial owners of more than 5% of the Common Stock outstanding as of the
Record Date.
Common Stock
Amount and Nature of Percent of
Name of Beneficial Owner Beneficial Ownership Class
Contran Corporation and subsidiaries:
Contran Corporation (1)...................................... 4,109,159 (2) 40.8%
Valhi, Inc. (1).............................................. 326,364 (2) 3.2%
NL Industries, Inc. (1)...................................... 326,050 (2) 3.2%
Dimensional Fund Advisors Inc.................................... 682,263 (3) 6.8%
- --------------------
(1) The business address of Contran and Valhi is Three Lincoln Centre, 5430 LBJ
Freeway, Suite 1700, Dallas, Texas 75240-2697. The business address of NL
is Two Greenspoint Plaza, 16825 Northchase Drive, Suite 1200, Houston,
Texas 77060-2544.
(2) Contran, Valhi, NL, the Harold Simmons Foundation, Inc. (the "Foundation"),
The Combined Master Retirement Trust (the "Master Trust") and the spouse of
Harold C. Simmons are the direct holders of approximately 40.8%, 3.2%,
3.2%, 1.9%, 0.3% and 0.1%, respectively, of the outstanding Common Stock.
Valhi, Tremont Corporation ("Tremont") and the spouse of Harold C. Simmons
are the direct holders of approximately 61.7%, 20.9% and 0.1%,
respectively, of the outstanding common stock of NL. Tremont Group, Inc.
("TGI"), Tremont Holdings, LLC ("TRE Holdings") and Valhi are the direct
holders of approximately 80.0%, 0.1% and 0.1%, respectively, of the
outstanding shares of Tremont common stock. Valhi and TRE Holdings are the
direct holders of 80.0% and 20.0%, respectively, of the outstanding common
stock of TGI. NL is the sole member of TRE Holdings.
Valhi Group, Inc. ("VGI"), National City Lines, Inc. ("National"), Contran,
the Foundation, the Contran Deferred Compensation Trust No. 2 (the "CDCT
No. 2"), the Master Trust and the spouse of Harold C. Simmons are the
direct holders of 81.7%, 9.5%, 2.1%, 0.5%, 0.4%, 0.1% and 0.1%,
respectively, of the outstanding common stock of Valhi. National, NOA, Inc.
("NOA") and Dixie Holding Company ("Dixie Holding") are the direct holders
of approximately 73.3%, 11.4% and 15.3%, respectively, of the outstanding
common stock of VGI. Contran and NOA are the direct holders of
approximately 85.7% and 14.3%, respectively, of the outstanding common
stock of National. Contran and Southwest Louisiana Land Company, Inc.
("Southwest") are the direct holders of approximately 49.9% and 50.1%,
respectively, of the outstanding common stock of NOA. Dixie Rice
Agricultural Corporation, Inc. ("Dixie Rice") is the direct holder of 100%
of the outstanding common stock of Dixie Holding. Contran is the holder of
100% of the outstanding common stock of Dixie Rice and approximately 88.9%
of the outstanding common stock of Southwest.
Substantially all of Contran's outstanding voting stock is held by trusts
established for the benefit of certain children and grandchildren of Harold
C. Simmons (the "Trusts"), of which Mr. Simmons is the sole trustee. As
sole trustee of the Trusts, Mr. Simmons has the power to vote and direct
the disposition of the shares of Contran stock held by the Trusts. Mr.
Simmons, however, disclaims beneficial ownership of any Contran shares that
the Trusts hold.
The Foundation directly holds approximately 1.9% of the outstanding shares
of Common Stock and 0.5% of the outstanding shares of Valhi common stock.
The Foundation is a tax-exempt foundation organized for charitable
purposes.
The Master Trust directly holds approximately 0.3% of the outstanding
shares of Common Stock and 0.1% of the outstanding shares of Valhi common
stock. Valhi established the Master Trust as a trust to permit the
collective investment by master trusts that maintain the assets of certain
employee benefit plans Valhi and related companies adopt. Mr. Simmons is
the sole trustee of the Master Trust and a member of the trust investment
committee for the Master Trust. Mr. Simmons is a participant in one or more
of the employee benefit plans that invest through the Master Trust.
Harold C. Simmons is the chairman of the board and chief executive officer
of TGI, Valhi, VGI, National, NOA, Dixie Holding, Dixie Rice, Southwest,
Contran and the Foundation. Mr. Simmons is also chairman of the board of NL
and a director of Tremont.
By virtue of the holding of the offices, the stock ownership and his
service as trustee, all as described above, Mr. Simmons may be deemed to
control such entities, and Mr. Simmons and certain of such entities may be
deemed to possess indirect beneficial ownership of the shares of Common
Stock directly held by certain of such other entities. Mr. Simmons,
however, disclaims beneficial ownership of the shares of Common Stock
beneficially owned, directly or indirectly, by any of such entities, except
to the extent of his vested beneficial interest, if any, in shares of
Common Stock the Master Trust directly holds.
Harold C. Simmons' spouse is the direct owner of 10,500 shares of Common
Stock, 69,475 shares of NL common stock and 77,000 shares of Valhi common
stock, respectively. Mr. Simmons may be deemed to share indirect beneficial
ownership of such shares. Mr. Simmons disclaims all such beneficial
ownership.
Messrs. Barry and Tucker are directors of Valhi. Messrs. Glenn R. Simmons
and Watson are directors and executive officers of Valhi and Contran and
directors of Tremont and NL. Messrs. Bass and Tucker are members of the
trust investment committee of the Master Trust. Messrs. Glenn R. Simmons
and Watson are participants in one or more of the employee benefit plans
that invest through the Master Trust. Each of such persons disclaims
beneficial ownership of any shares of Common Stock directly or indirectly
owned by any of such entities, except to the extent of such person's vested
beneficial interest, if any, in any shares of Common Stock the Master Trust
directly holds.
The CDCT No. 2 directly holds approximately 0.4% of the outstanding Valhi
common stock. U.S. Bank National Association serves as the trustee of the
CDCT No. 2. Contran established the CDCT No. 2 as an irrevocable "rabbi
trust" to assist Contran in meeting certain deferred compensation
obligations that it owes to Harold C. Simmons. If the CDCT No. 2 assets are
insufficient to satisfy such obligations, Contran is obligated to satisfy
the balance of such obligations as they come due. Pursuant to the terms of
the CDCT No. 2, Contran (i) retains the power to vote the shares of Valhi
common stock held directly by the CDCT No. 2, (ii) retains dispositive
power over such shares and (iii) may be deemed the indirect beneficial
owner of such shares.
For purposes of calculating the outstanding shares of Valhi common stock as
of the Record Date, 1,186,200 shares of Valhi common stock held by a
subsidiary of NL, a majority owned subsidiary of Valhi, and 1,000,000
shares of Valhi common stock held by Valmont Insurance Company, a wholly
owned subsidiary of Valhi ("Valmont"), are excluded from the amount of
Valhi common stock outstanding. Pursuant to Delaware corporate law, Valhi
treats these excluded shares as treasury stock for voting purposes.
The business address of TGI, VGI, National, NOA, Dixie Holding, the Master
Trust, the Foundation and Harold C. Simmons is Three Lincoln Centre, 5430
LBJ Freeway, Suite 1700, Dallas, Texas 75240-2697. The business address of
Dixie Rice is 600 Pasquiere Street, Gueydan, Louisiana 70542. The business
address of Southwest is 402 Canal Street, Houma, Louisiana 70360. The
business address of TRE Holdings is Two Greenspoint Plaza, 16825 Northchase
Drive, Suite 1200, Houston, Texas 77060-2544. The business address of
Tremont is 1999 Broadway, Suite 4300, Denver, Colorado 80202.
(3) The business address of Dimensional Fund Advisors Inc. ("Dimensional") is
1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401. Dimensional,
a registered investment advisor, may be deemed to have beneficial ownership
of 682,263 shares of Common Stock as of December 31, 2001, all of which
shares are held in portfolios for which Dimensional serves as investment
advisor and investment manager. Dimensional possesses both sole voting and
investment power over the Common Stock owned by such portfolios.
Dimensional disclaims beneficial ownership of such securities.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING 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 SEC and Keystone. Based solely on the review of the copies of such
reports filed with the SEC, Keystone believes that for 2001 its executive
officers, directors and 10% stockholders complied with all applicable filing
requirements under Section 16(a).
CERTAIN BUSINESS RELATIONSHIPS AND RELATED TRANSACTIONS
As set forth under the caption "Security Ownership of Certain Beneficial
Owners," Harold C. Simmons, through Contran and other entities, may be deemed to
beneficially own approximately 49.6% of the outstanding Common Stock as of the
Record Date 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, tax
sharing agreements, 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 that resulted in the acquisition by one related party
of a publicly-held minority equity interest in another related party. The
Company continuously considers, reviews and evaluates and understands that
Contran and related entities consider, review and evaluate transactions of the
type described above. 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.
No specific procedures are in place that govern the treatment of
transactions among the Company and its related entities, although such entities
may implement specific procedures as appropriate for particular transactions. In
addition, under applicable principles of law, in the absence of stockholder
ratification or approval by directors who may be deemed disinterested,
transactions involving contracts among companies under common control must be
fair to all companies involved. Furthermore, directors owe fiduciary duties of
good faith and fair dealing to all stockholders of the companies for which they
serve.
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 pursuant
to the Intercorporate Services Agreement between Contran and the Company, a copy
of which is included as Exhibit 10.1 in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 2001, filed on April 15, 2002. The fee
incurred during 2001 was $1,005,000 (of which $219,000 was attributable to
services of Mr. Glenn R. Simmons). The portion of the 2000 and 1999 fees the
Company paid Contran pursuant to the Intercorporate Services Agreements
attributable to the services Mr. Glenn R. Simmons provided the Company was
$219,000 and $146,000, respectively. 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 2001 were
$52,000.
Tall Pines Insurance Company "(Tall Pines"), Valmont Insurance Company
("Valmont"), and EWI RE, Inc. ("EWI Inc.") provide for or broker certain of the
Company's insurance policies. Tall Pines is a wholly owned captive insurance
company of Tremont. Valmont is a wholly owned captive insurance company of
Valhi. During 2001, one of the daughters of Harold C. Simmons and a wholly owned
subsidiary of Contran owned, directly or indirectly, 57.8% and 42.2%,
respectively, of the outstanding common stock of EWI Inc. and of the membership
interests of EWI Inc.'s management company, EWI RE, Ltd. (collectively with EWI
Inc., "EWI"). Through December 31, 2000, a son-in-law of Harold C. Simmons
managed the operations of EWI. Subsequent to December 31, 2000, pursuant to an
agreement that terminates on December 31, 2002, such son-in-law provides
advisory services to EWI as requested by EWI, for which the son-in-law is paid
$11,875 per month and receives certain other benefits under EWI's benefit plans.
Consistent with insurance industry practices, Tall Pines, Valmont and EWI Inc.
receive commissions from the insurance and reinsurance underwriters for the
policies that they provide or broker. During 2001, the Company and its
subsidiaries paid approximately $2.2 million for policies provided or brokered
by Tall Pines, Valmont and/or EWI Inc. These amounts principally included
payments for reinsurance and insurance premiums paid to unrelated third parties,
but also included commissions paid to Tall Pines, Valmont and EWI Inc. In the
Company's opinion, the amounts that the Company and its subsidiaries paid for
these insurance policies are reasonable and similar to those they could have
obtained through unrelated insurance companies and/or brokers. The Company
expects that these relations with Tall Pines, Valmont, and EWI will continue in
2002.
Dallas Compressor Company, a wholly owned subsidiary of Contran, sells
compressors and related services to Keystone. During 2001, Keystone purchased
products and services from Dallas Compressor Company in the amount of $31,000.
Aircraft services were purchased from Valhi in the amount of $124,000 for
the year ended December 31, 2001.
During 2001, Garden Zone, a 51% owned subsidiary of Keystone, paid
approximately $60,000 to one of its other owners for accounting and financial
services.
EWP Financial, LLC, a wholly owned subsidiary of Contran, has agreed to
loan the Company up to an aggregate of $6 million through December 31, 2002.
Borrowings bear interest at the prime rate plus 3%, and are collateralized by
the stock of Engineered Wire Products, Inc. a wholly owned subsidiary of the
Company. In addition, the Company pays a commitment fee of .375% on the
unutilized portion of the facility. At December 31, 2001, no amounts were
outstanding under the facility, and $6 million was available for borrowing by
the Company. During 2001, the Company paid Contran an up-front facility fee of
$120,000 related to this facility. The terms of this loan were approved by the
independent directors of the Company.
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.
REPORT ON EXECUTIVE COMPENSATION
Compensation Committee Report
During 2001, matters regarding compensation of executive officers were
administered by the Chairman of the Board (the "COB") and/or the Compensation
Committee (the "Committee"). The Committee is comprised of directors who are
neither officers nor employees of the Company or its subsidiaries.
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
significant 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 compensation arrangements to be deductible for federal income tax
purposes under applicable provisions of the Internal Revenue Code.
During 2001, the Company's compensation program with respect to its
executive officers consisted of three components: base salary, incentive bonus,
including deferred compensation, and stock option awards.
Base Salary
The COB and/or the Committee reviews base salaries for executives at least
annually. 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 COB and/or the Committee. Annual performance reviews are
an important factor in determining management's recommendation 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 officer's
performance is typically measured by the ability the executive officer
demonstrates in performing, in a timely and cost efficient manner, the functions
of the executive officer'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 officer'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 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, stock appreciation
rights 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
considered the number of stock options already outstanding in granting new stock
options. The Compensation Committee did not grant any stock options in 2001.
The foregoing report is submitted by the following individuals in the
capacities indicated:
Glenn R. Simmons Dr. Thomas E. Barry Paul M. Bass, Jr.
Chairman of the Board Chairman of the Compensation Committee Member of the Compensation
Committee
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is or has been an officer or
employee of the Company or any of its subsidiaries. In 2001, 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, 1996 through December 31, 2001, with the
Standard & Poor's 500 Composite Index and the Standard & Poor's Iron & 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, 1996 and
that all dividends were reinvested.
Comparison of Five Year Cumulative Total Shareholder Return Among
Keystone Consolidated Industries, Inc., S&P 500, and S&P Iron & Steel Index
[Performance graph omitted]
1996 1997 1998 1999 2000 2001
Keystone $100 145 98 72 17 8
S&P 500 $100 133 171 208 189 166
S&P Iron & Steel $100 102 88 97 61 78
INDEPENDENT AUDITOR MATTERS
Independent Auditors. The firm of PricewaterhouseCoopers LLP served as
Keystone's independent auditors for the year ended December 31, 2001, has been
appointed to review Keystone's quarterly unaudited consolidated financial
statements to be included in its Quarterly Reports on Form 10-Q for the first
three quarters of 2002 and is expected to be considered for appointment to audit
Keystone's annual consolidated financial statements for the year ending December
31, 2002. Representatives of PricewaterhouseCoopers LLP will be present at the
Annual Meeting. They will have an opportunity to make a statement if they desire
to do so and will be available to respond to appropriate questions.
Audit Committee Report. The audit committee of the Board of Directors is
composed of three directors, all of whom are independent. The audit committee
operates under a written charter the Board of Directors adopted, a copy of which
was attached as Exhibit A to Keystone's proxy statement for its 2001 annual
meeting of stockholders. Keystone's management is responsible for preparing
Keystone's consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America. Keystone's
independent auditors are responsible for auditing Keystone's consolidated
financial statements in accordance with auditing standards generally accepted in
the United States of America. The audit committee serves as an independent and
objective party to review Keystone's auditing, accounting and financial
reporting processes.
The audit committee has reviewed and discussed Keystone's audited
consolidated financial statements for the year ended December 31, 2001 with
Keystone's management and independent auditors. The audit committee discussed
with the independent auditors the matters required by Statement on Auditing
Standards No. 61 (Communication with Audit Committees), received written
disclosures from the independent auditors required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit Committees) and
discussed with the independent auditors their independence. The audit committee
also considered whether the independent auditors' provision of non-audit
services to Keystone and its subsidiaries is compatible with such auditors'
independence. Additionally, the audit committee discussed with Keystone's
management and the independent auditors such other matters as the committee
deemed appropriate. Based on the audit committee's review of Keystone's audited
consolidated financial statements and the audit committee's discussions with
Keystone's management and independent auditors, the audit committee recommended
to the Board of Directors that Keystone's audited consolidated financial
statements for the year ended December 31, 2001 be included in Keystone's Annual
Report on Form 10-K for the year ended December 31, 2001, which has been filed
with the Securities and Exchange Commission.
Paul M. Bass, Jr. Dr. Thomas E. Barry William Spier
Chairman of the Audit Committee Member of the Audit Committee Member of the Audit Committee
Audit and Other Fees. The following table shows the aggregate fees
PricewaterhouseCoopers LLP has billed or is expected to bill to Keystone and its
subsidiaries for services rendered for 2001.
Financial Information
Systems Design and
Audit Fees (1) Implementation Fees All Other Fees (2)
- -------------- ------------------- ------------------
$247,600 $ - 0 - $80,000
(1) Includes (a) fees for the audit of Keystone's consolidated financial
statements for the year ended December 31, 2001, (b) fees for reviews of
the unaudited quarterly financial statements appearing in Keystone's Forms
10-Q for each of the first three quarters of 2001 and (c) the estimated
out-of-pocket costs PricewaterhouseCoopers LLP incurred in such audits and
reviews. Keystone reimburses PricewaterhouseCoopers LLP for such
out-of-pocket costs.
(2) Audit of benefit plans that Keystone or its subsidiaries sponsor.
STOCKHOLDER PROPOSALS
Stockholders may submit proposals on matters appropriate for stockholder
action at the Company's annual meetings, subject to regulations adopted by the
SEC. The Company presently intends to call the next annual meeting during May
2003. For such proposals to be considered for inclusion in the Proxy Statement
and form of proxy relating to the 2003 annual meeting, they must be received by
the Company not later than December 16, 2002. 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.
2001 ANNUAL REPORT ON FORM 10-K
A copy of Keystone's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001, as filed with the SEC, is included as part of the annual
report mailed to Keystone's stockholders with this proxy statement.
ADDITIONAL COPIES
The SEC recently approved a new rule concerning the delivery of annual
reports and proxy statements. It permits a single set of these reports to be
sent to any household at which two or more stockholders reside if they appear to
be members of the same family. Each stockholder continues to receive a separate
proxy card. This procedure, referred to as householding, reduces the volume of
duplicate information stockholders receive and reduces mailing and printing
expenses. A number of brokerage firms have instituted householding. Certain
beneficial stockholders who share a single address may have received a notice
sent earlier this year that only one annual report and proxy statement will be
sent to that address unless a stockholder at that address gave contrary
instructions. Keystone will promptly deliver a separate copy of Keystone's 2001
annual report or this proxy statement to any stockholder at a shared address to
which a single copy of such documents was delivered, upon written or oral
request of such stockholder.
To obtain copies of Keystone's 2001 annual report or this proxy statement
without charge, please mail your request to Sandra K. Myers, Corporate
Secretary, at Keystone Consolidated Industries, Inc., Three Lincoln Centre, 5430
LBJ Freeway, Suite 1740, Dallas, Texas 75240-2697, or call her at (972)
458-0028.
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
Dallas, Texas
April 15, 2002
PROXY
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240
SOLICITED BY THE BOARD OF DIRECTORS
for Annual Meeting of Stockholders
Thursday, May 16, 2002
The undersigned, having received the Notice of Annual Meeting and Proxy
Statement dated April 15, 2002, and Annual Report to Stockholders, hereby
appoints Bert E. Downing, Jr. and Sandra K. Myers, or either of them, proxies,
with full power of substitution to vote, as specified in this proxy, all the
shares of capital stock of KEYSTONE CONSOLIDATED INDUSTRIES, INC., a Delaware
corporation (the "Company"), held of record by the undersigned and entitled to
vote on the record date, March 18, 2002, at the Annual Meeting of Stockholders
to be held at 5430 LBJ Freeway, Suite 1740, Dallas, TX 75240 at 9:00 a.m. local
time on May 16, 2002, and all adjournments or postponements thereof, as directed
and, in their discretion, on all other matters which may properly come before
the Annual Meeting or any adjournments or postponements 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. The undersigned hereby acknowledges receipt of the accompanying
Proxy Statement and Annual Report to Stockholders, and hereby revokes any proxy
or proxies heretofore given by the undersigned relating to the Annual Meeting.
(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 stockholder. If no direction is made, this Proxy will be
voted "For" all nominees for election as Directors.
Election of Director for a NOMINEE: J. Walter Tucker, Jr.
Two-Year Term
For Withhold
[ ] [ ]
Election of Directors for a NOMINEES: Glenn R. Simmons and Steven L. Watson
Three-Year Term
(Instruction: To withhold authority for any
single nominee, write that nominee's name
in the space provided below)
-----------------------------------------------
FOR all nominees WITHHOLD AUTHORITY
listed to the right to vote for all nominees
(except as marked to listed to the right
the contrary)
[ ] [ ]
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: _______________________, 2002
THIS PROXY MAY BE REVOKED AS SET FORTH IN THE KEYSTONE CONSOLIDATED INDUSTRIES,
INC. PROXY STATEMENT THAT ACCOMPANIED THIS PROXY.
VOTING INSTRUCTIONS
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240
SOLICITED BY THE BOARD OF DIRECTORS
for Annual Meeting of Stockholders
Thursday, May 16, 2002
The undersigned, being participants in the Keystone Consolidated
Industries, Inc. Deferred Incentive Plan, having received the Notice of Annual
Meeting and Proxy Statement dated April 15, 2002, and Annual Report to
Stockholders, hereby instructs the trustee, to vote, as specified below, all the
shares of common stock of KEYSTONE CONSOLIDATED INDUSTRIES, INC., a Delaware
corporation (the "Company"), held of record by the trustee for the account of
the undersigned and entitled to vote on the record date, March 18, 2002, at the
Annual Meeting of Stockholders to be held on May 16, 2002, and all adjournments
or postponements thereof, as directed and, in their discretion, on all other
matters which may properly come before the Annual Meeting or any adjournments or
postponements thereof.
(Continued, and to be marked, dated and signed, on the other side)
************
(Back Side)
Please vote all shares allocated to my account in the Keystone Consolidated
Industries, Inc. Deferred Incentive Plan, as applicable. If no direction is
made, the trustee will vote "For" all nominees for election as Directors.
Election of Director for a NOMINEE: J. Walter, Tucker, Jr.
Two-Year Term
For Withhold
[ ] [ ]
Election of Directors for a NOMINEES: Glenn R. Simmons and Steven L. Watson
Three-Year Term each for a term of three years.
(Instruction: To withhold authority for any
single nominee, write that nominee's name in
the space provided below)
-----------------------------------------------
FOR all nominees WITHHOLD AUTHORITY
listed to the right to vote for all nominees
(except as marked to listed to the right
the contrary)
[ ] [ ]
-----------------------------------
Signature
Date: _______________________, 2002
PLEASE SIGN, DATE, AND RETURN THE CARD PROMPTLY USING THE ENCLOSED ENVELOPE.