SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-2
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- --- ACT OF 1934 - For the fiscal year ended December 31, 2002
Commission file number 1-3919
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Keystone Consolidated Industries, Inc.
(Exact name of registrant as specified in its charter)
Delaware 37-0364250
- --------------------------------- ---------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) identification No.)
5430 LBJ Freeway, Suite 1740
Three Lincoln Centre, Dallas, TX 75240-2697
- --------------------------------------- --------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 458-0028
---------------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock, $1 par value None
Securities registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
---
Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes No X
---
The aggregate market value of the 5,077,977 shares of voting stock held by
nonaffiliates of the Registrant, as of June 28, 2002 (the last business day of
the Registrant's most recently completed second fiscal quarter), was
approximately $5.1 million.
As of March 31, 2003, 10,068,450 shares of common stock were outstanding.
Documents incorporated by reference
The information required by Part III is incorporated by reference from the
Registrant's definitive proxy statement to be filed with the Securities and
Exchange Commission pursuant to Regulation 14A not later than 120 days after the
end of the fiscal year covered by this report.
The undersigned Registrant hereby amends the following items, financial
statements, exhibits or other portions of its Annual Report on Form 10-K for the
year ended December 31, 2002 as set forth below and in the pages attached
hereto:
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
Exhibit No.
99.3 -- Annual Report of the Keystone Consolidated Industries, Inc. Deferred
Incentive Plan (Form 11-K) for the year ended December 31, 2002 (filed
as an amendment to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 2002).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
--------------------------------------
(Registrant)
Date: June 30, 2003 By: /s/ Bert E. Downing, Jr.
---------------------------
Bert E. Downing, Jr.
Vice President, Chief Financial
Officer, Corporate Controller and
Treasurer
(Principal Financial and Accounting
Officer)
CERTIFICATION
I, David L. Cheek, the President and Chief Executive Officer of Keystone
Consolidated Industries, Inc., certify that:
1) I have reviewed this annual report on Form 10-K/A-2 of Keystone
Consolidated Industries, Inc.; and
2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report.
Date: June 30, 2003
/s/ David L. Cheek
- -----------------------------------------
David L. Cheek
President and Chief Executive Officer
CERTIFICATION
I, Bert E. Downing, Jr., the Vice President, Chief Financial Officer, Corporate
Controller and Treasurer of Keystone Consolidated Industries, Inc., certify
that:
1) I have reviewed this annual report on Form 10-K/A-2 of Keystone
Consolidated Industries, Inc.; and
2) Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this annual report.
Date: June 30, 2003
/s/ Bert E. Downing, Jr.
- ----------------------------------------------
Bert E. Downing, Jr.
Vice President, Chief Financial Officer,
Corporate Controller and Treasurer
EXHIBIT 99.3
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2002
Commission file number 1-3919
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Keystone Consolidated Industries, Inc. Deferred Incentive Plan
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
Keystone Consolidated Industries, Inc.
5430 LBJ Freeway, Suite 1740
Dallas, Texas 75240
KEYSTONE CONSOLIDATED INDUSTRIES, INC. DEFERRED INCENTIVE PLAN
FORM 11-K
Index
Page
Signature Page......................................................... 2
Financial Statements
Report of Independent Accountants.................................... 3
Statements of Net Assets Available for Benefits -
December 31, 2001 and 2002......................................... 4
Statement of Changes in Net Assets Available for Benefits -
Year ended December 31, 2002....................................... 5
Notes to Financial Statements........................................ 6-9
Supplemental Schedule
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
- December 31, 2002................................................ 10
Exhibit I - Consent of Independent Accountants......................... 11
Exhibit II - Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.. 12
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934, the Administrator
has duly caused this Annual Report to be signed by the undersigned thereunto
duly authorized.
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
DEFERRED INCENTIVE PLAN
By: ADMINISTRATIVE COMMITTEE OF THE
KEYSTONE CONSOLIDATED INDUSTRIES, INC.
DEFERRED INCENTIVE PLAN
By: /s/ Bert E. Downing, Jr.
-----------------------------------
Bert E. Downing, Jr.
Committee Member
June 30, 2003
Report of Independent Auditors
To the Participants and Administrator of
Keystone Consolidated Industries, Inc. Deferred Incentive Plan
In our opinion, the accompanying statements of net assets available for benefits
and the related statement of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of Keystone Consolidated Industries, Inc. Deferred Incentive Plan (the "Plan")
at December 31, 2001 and 2002, and the changes in net assets available for
benefits for the year ended December 31, 2002 in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of the Plan's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Schedule of
Assets (Held at End of Year) is presented for the purpose of additional analysis
and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Dallas, Texas
June 23, 2003
KEYSTONE CONSOLIDATED INDUSTRIES, INC. DEFERRED INCENTIVE PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2001 and 2002
2001 2002
---- ----
Net assets available for benefits:
Investments .................................. $26,520,639 $21,665,630
Employer contribution receivable ............. 23,600 19,500
Participant contributions receivable ......... 38,349 37,606
----------- -----------
$26,582,588 $21,722,736
=========== ===========
KEYSTONE CONSOLIDATED INDUSTRIES, INC. DEFERRED INCENTIVE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 2002
Additions:
Investment income - Interest and dividends ................ $ 585,918
------------
Contributions:
Employer ................................................ 19,500
Participants ............................................ 1,244,911
------------
1,264,411
Total additions ....................................... 1,850,329
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Deductions:
Net depreciation in fair value of investments ............. 4,415,839
Benefits to participants .................................. 2,293,351
Administrative expenses ................................... 991
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Total deductions ...................................... 6,710,181
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Net decrease in net assets available for benefits ........... (4,859,852)
Net assets available for benefits:
December 31, 2001 ......................................... 26,582,588
------------
December 31, 2002 ......................................... $ 21,722,736
============
KEYSTONE CONSOLIDATED INDUSTRIES, INC. DEFERRED INCENTIVE PLAN
NOTES TO FINANCIAL STATEMENTS
Note 1 - Description of Plan and significant accounting policies
General. The following description of the Keystone Consolidated Industries,
Inc. Deferred Incentive Plan (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
The Plan is a defined contribution plan in which eligible employees of
Keystone Consolidated Industries, Inc. and certain of its subsidiaries
("Keystone" or the "Employer") who have at least one year of eligible service
and are at least 21 years old may elect to participate. The Plan is a qualified
cash or deferred profit-sharing plan under Sections 401(a) and 401(k) of the
Internal Revenue Code of 1986, as amended (the "Code"), and is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
Contran Corporation ("Contran") and other entities related to Mr. Harold C.
Simmons beneficially own approximately 50% of Keystone. Substantially all of
Contran's outstanding voting stock is held by trusts established for the benefit
of certain children and grandchildren of Mr. Simmons, of which Mr. Simmons is
sole trustee. Keystone may be deemed to be controlled by Contran and Mr.
Simmons. In addition, Contran owns 54,956 shares of the 59,399 shares of
Keystone's Reedeemable Series A Preferred Stock. Effective March 15, 2003, each
share of series A Preferred Stock is Convertible, at the option of the holder,
into 250 shares of Keystone's common stock.
Contributions. The Plan permits participants to defer 1% to 100% of their
pre-tax annual compensation as contributions, not to exceed a deferral of
$11,000 in 2002 (subject to adjustment in future years), through payroll
deductions. Beginning January 1, 2002, participants who will be at least age 50
by the end of the Plan year may elect to make "catch-up" contributions, not to
exceed an additional deferral of $1,000 in 2002 (subject to adjustments in
future years) through payroll deductions. At its discretion, the Employer may
contribute cash or shares of Keystone common stock to the Plan based on a
matching or other formula. The Employer's cash contributions are allocated to
participants' accounts on a percentage or matching basis relative to the
participants' contributions for the year. The Employer's contributions of
Keystone common stock are allocated to the respective participants' accounts in
the Keystone Restricted Stock Fund. The Employer's contribution is reduced, as
provided by the Plan, by nonvested amounts forfeited by participants who
withdraw from the Plan. At December 31, 2001 and 2002, unallocated forfeited
nonvested accounts were $24,872 and $26,091 respectively. The Employer may use
forfeited nonvested accounts to reduce Employer contributions in the fifth year
following the plan year of forfeiture. There was no allocation of forfeited
nonvested accounts to participant accounts during the year ended December 31,
2002.
Vesting and benefits. Salary deferrals (including earnings thereon) are
immediately vested while Employer contributions (including earnings thereon)
vest at the rate of 20% per year of service, as defined.
Upon termination of employment, retirement, death or disability, a
participant (or beneficiary, if applicable) may elect to receive either (i) a
lump sum amount equal to the vested value of the participant's accounts or (ii)
installments over a period of not more than 30 years. With the consent of the
Plan administrators, participants can borrow amounts from their vested account
balances, subject to certain limitations under the Plan.
Benefits are recorded when paid.
Participants' accounts. The Plan currently provides participants with
options to invest account balances in publicly-traded registered investment
companies or pooled funds administered by Putnam Investments, as well as three
other publicly-traded mutual funds administered by companies other than Putnam
Investments. Participants can direct the Plan administrator to invest, in 10%
increments, such account balances in any of the Plan's investment fund options.
Employer contributions of shares of Keystone common stock are allocated to
participant accounts through the "Keystone Restricted Stock Fund." Below are the
investment fund options available to participants at December 31, 2002:
Putnam Voyager Fund - Seeks capital appreciation. Invests primarily in
common stocks.
Putnam Vista Fund - Seeks capital appreciation. Invests primarily in common
stocks.
Putnam OTC and Emerging Growth Fund - Seeks capital appreciation. Invests
primarily in common stocks of small to medium-sized "emerging growth"
companies traded in the over-the-counter ("OTC") market.
The George Putnam Fund of Boston - Seeks to provide a balanced investment
which will produce both capital growth and current income. Invests in a
diversified group of stocks and bonds.
PIMCO Total Return Fund - Seeks maximum current income and price
appreciation. Invests in intermediate maturity fixed-income securities from
all major sectors of the bond market.
UAM ICM Small Company Portfolio Fund - Seeks maximum, long-term total
return. Invests in common stocks of smaller to midsize companies.
Putnam Stable Value Fund - This pooled fund seeks stable principal and
relatively high current income. Invests primarily in high-quality
fixed-income investments.
Putnam Asset Allocation Fund - Growth Portfolio - Seeks capital
appreciation. Invests in both stocks and bonds.
Putnam Asset Allocation Fund - Balanced Portfolio - Seeks total return.
Invests in both stocks and bonds.
Putnam Asset Allocation Fund - Conservative Portfolio - Seeks total return
with preservation of capital. Invests in both stocks and bonds.
Putnam S&P 500 Index Fund - Seeks to mirror the performance and composition
of Standard & Poor's 500 Composite Index.
Equity Income Fund - Seeks to provide current income by investing primarily
in a diversified portfolio of income producing equity securities.
Putnam International Growth Fund - Seeks capital appreciation. Invests in
growth and value stocks outside of the United States.
Managers Special Equity Fund - Seeks capital appreciation through
investment primarily in the equity securities of a diversified group of
companies expected to have superior earnings and growth potential. The
fund's investments will tend to be in the securities of companies having
small to medium market capitalizations.
The above fund descriptions provide only general information. Participants
should refer to the Prospectus of each fund for a more complete description.
Each participant's account is credited with the participant's contribution
and an allocation of the Employer's contribution and Plan earnings, and charged
with an allocation of administrative expenses. Allocations are based on
participant earnings, matching or account balances, as defined in the Plan.
During 1988, in connection with a rights offering of Keystone's common
stock, certain participants were permitted to direct part of their account
balance into an investment in Keystone's common stock (the "Keystone
Unrestricted Stock Fund").
In addition to the Plan's investment fund options, a "Loan Fund" is
maintained to account for loans to participants, as permitted by the Plan. These
loans, which are secured by the balance in the participant's account, bear
interest at rates ranging from 5.25% to 10.50% and mature through 2031.
Plan termination. The Employer has the right under the Plan to discontinue
its contributions at any time and to terminate the Plan, in compliance with the
provisions of ERISA. In the event the Plan is terminated, the accounts of all
participants would become fully vested.
Basis of accounting. The financial statements of the Plan are prepared in
accordance with accounting principles generally accepted in the United States of
America. Valuation of investments is more fully described in Note 2.
Expenses of administering the Plan. To the extent not paid by the Employer,
administrative expenses are paid by the Plan. The Employer paid a significant
portion of 2002 administrative expenses.
Management estimates. The preparation of the Plan's financial statements in
conformity with accounting principles generally accepted in the United States of
America requires the plan administrator to make significant estimates and
assumptions that affect the reported amounts of net assets available for
benefits at the date of the financial statements and the changes in net assets
available for benefits during the reporting period and disclosures of contingent
assets and liabilities at the date of the financial statements. Actual results
may, in some instances, differ from previously estimated amounts.
Risks and uncertainties. The Plan provides for various investment options
in a variety of stocks, bonds, fixed income securities, mutual funds, and other
investment securities. Investment securities are exposed to various risks, such
as interest rate, market, and credit risks. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term and
that such changes could materially affect participants' account balances and the
amounts reported in the Plan's statement of net assets available for benefits.
Tax status. The Plan has been notified by the Internal Revenue Service that
it is a qualified plan under Section 401(a) and Section 401(k) of the Internal
Revenue Code (the "Code"), and is therefore exempt from federal income taxes
under provisions of Section 501(a) of the Code.
The Plan has been amended since it was notified of its exempt status by the
Internal Revenue Service. Management believes the Plan currently is designed and
operates in accordance with the applicable requirements of the Code and
therefore remains exempt from federal income taxes under provisions of Section
501(a) of the Code.
Note 2 - Investments
General. The assets of the Plan are held and the related investment
transactions are executed by Putnam Fiduciary Trust Company as trustee (the
"Trustee") of the Keystone Master Deferred Incentive Trust (the "Keystone
Trust"). The Keystone Trust currently invests in publicly-traded registered
investment companies or pooled funds administered by Putnam Investments as well
as three other publicly-traded mutual funds administered by companies other than
Putman Investments (see Note 1). The Plan's investments are stated at fair value
based on quoted market prices and net depreciation for the year is reflected in
the Plan's statement of changes in net assets available for plan benefits. The
net depreciation consists of realized gains or losses and unrealized
appreciation or depreciation on investments.
Investments that individually represent 5% or more of the Plan's net assets
at year end are as follows:
December 31,
2001 2002
---- ----
Putnam Funds:
Voyager ............................ $7,976,060 $5,391,421
Stable Value ....................... $5,845,961 $5,880,263
Vista .............................. $5,641,942 $3,132,554
PIMCO Total Return ................... $2,149,065 $2,380,223
Note 3 - Non-participant-directed investments
Information about the net assets, and the significant components of the
changes in such net assets, relating to non-participant-directed investments is
as follows:
December 31,
2001 2002
---- ----
Net assets available for benefits
- - Keystone Restricted Stock .................. $214,984 $163,022
======== ========
Year ended
December 31, 2002
Changes in net assets available for benefits
- - Keystone Restricted Stock
Net depreciation in fair value of investments ................. $(35,979)
Benefits to participants ...................................... (14,689)
Transfers ..................................................... (1,399)
Investment income ............................................. 105
--------
Net decrease in net assets available for
benefits .................................................... $(51,962)
========
KEYSTONE CONSOLIDATED INDUSTRIES, INC. DEFERRED INCENTIVE PLAN
Schedule H, Line 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2002
Fair
value
($000s)
*Putnam Funds:
Stable Value ................................................. $ 5,880
Voyager ...................................................... 5,391
Vista ........................................................ 3,133
George Putnam Fund of Boston ................................. 831
Equity Income ................................................ 773
International Growth ......................................... 477
OTC and Emerging Growth ...................................... 393
S&P 500 Index ................................................ 341
Asset Allocation - Conservative Portfolio .................... 311
Asset Allocation - Balanced Portfolio ........................ 143
Asset Allocation - Growth Portfolio .......................... 93
*PIMCO Total Return ............................................ 2,380
*UAM ICM Small Company Portfolio ............................... 606
*Managers Special Equity Fund .................................. 99
*Keystone Restricted Stock ..................................... 163
*Keystone Unrestricted Stock Fund .............................. 14
*Loans to participants (5.25% - 10.50%;
mature through 2031) ........................................ 638
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$21,666
=======
* Party in interest.
Exhibit I
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (File No. 333-71441) of Keystone Consolidated Industries,
Inc. of our report dated June 23, 2003, relating to the financial statements of
the Keystone Consolidated Industries, Inc. Deferred Incentive Plan, which
appears in this Form 11-K.
PricewaterhouseCoopers LLP
Dallas, Texas
June 27, 2003
EXHIBIT II
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Keystone Consolidated Industries, Inc.
(the Company) on Form 11-K for the year ending December 31, 2002 as filed with
the Securities and Exchange Commission on the date hereof (the Report), the
undersigned hereby certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant
to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of
the Company.
/s/ David L. Cheek
- -------------------------------------
David L. Cheek
President and Chief Executive Officer
(Chief Executive Officer)
June 30, 2003
/s/ Bert E. Downing, Jr.
- --------------------------------------
Bert E. Downing, Jr.
Vice President, Chief Financial Officer,
Corporate Controller and Treasurer
(Chief Financial Officer)
June 30, 2003