0000059255-11-000260.txt : 20110819 0000059255-11-000260.hdr.sgml : 20110819 20110819154949 ACCESSION NUMBER: 0000059255-11-000260 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20110819 DATE AS OF CHANGE: 20110819 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KEYSTONE CONSOLIDATED INDUSTRIES INC CENTRAL INDEX KEY: 0000055604 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 370364250 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-31481 FILM NUMBER: 111047347 BUSINESS ADDRESS: STREET 1: 5430 LBJ FWY STE 1740 STREET 2: THREE LINCOLN CENTRE CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144580028 MAIL ADDRESS: STREET 1: 5430 LBJ FWY STE 1740 STREET 2: THREE LINCOLN CENTRE CITY: DALLAS STATE: TX ZIP: 75240 FORMER COMPANY: FORMER CONFORMED NAME: KEYSTONE STEEL & WIRE CO DATE OF NAME CHANGE: 19710506 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CONTRAN CORP CENTRAL INDEX KEY: 0000024240 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 741646336 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 5430 LBJ FRWY STREET 2: SUITE 1700 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 9724504228 MAIL ADDRESS: STREET 1: 5430 LBJ FRWY STREET 2: SUITE 1700 CITY: DALLAS STATE: TX ZIP: 75240 SC 13D/A 1 sch13dkci081911.htm KCI SCHEDULE 13D DTD AUGUST 17, 2011 sch13dkci081911.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

SCHEDULE 13D
Under the Securities Exchange Act of 1934

(Amendment No. 57)*


Keystone Consolidated Industries, Inc.
(Name of Issuer)

Common Stock, par value $0.01 per share
(Title of Class of Securities)

493422 30 7
(CUSIP Number)

BOBBY D. O’BRIEN
Three Lincoln Centre
Suite 1700
5430 LBJ Freeway
Dallas, Texas   75240-2694
(972) 233-1700
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

August 17, 2011
(Date of Event which requires Filing
of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

(Continued on following pages)

 
 
 

CUSIP No.  493422 30 7

1
NAMES OF REPORTING PERSONS AND I.R.S. IDENTIFICATION NOS. OF SUCH PERSONS (ENTITIES ONLY)
Contran Corporation
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a)  o
(b)  o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS (SEE INSTRUCTIONS)
BK, WC & OO
5
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)  o
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
               -0-
8
SHARED VOTING POWER
 10,647,401
9
SOLE DISPOSITIVE POWER
               -0-
10
SHARED DISPOSITIVE POWER
 10,647,401
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
10,647,401
12
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)  o
 
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
88.0%
14
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO


 
 
 

CUSIP No. 493422 30 7

1
NAMES OF REPORTING PERSONS AND I.R.S. IDENTIFICATION NOS. OF SUCH PERSONS (ENTITIES ONLY)
Harold C. Simmons
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a)  o
(b)  o
3
SEC USE ONLY
 
4
SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO
5
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e)  o
 
6
CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
7
SOLE VOTING POWER
               -0-
8
SHARED VOTING POWER
 10,660,858
9
SOLE DISPOSITIVE POWER
               -0-
10
SHARED DISPOSITIVE POWER
 10,660,858
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
12
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)  ý
 
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
14
TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN


 
 
 

AMENDMENT NO. 57
TO SCHEDULE 13D

This amended statement on Schedule 13D (this “Statement”) relates to the common stock, par value $0.01 per share (the “Shares”), of Keystone Consolidated Industries, Inc., a Delaware corporation (the “Company”).  Items 2, 3, 4, 5, 6 and 7 of this Statement are hereby amended or supplemented as set forth below.

Item 2.
Identity and Background.

There is no change to the prior disclosure under this item except for the following.

(a)           This Statement is filed by:

·  
Contran Corporation (“Contran”) as a direct holder of Shares; and

·  
by virtue of his position with Contran (as described in this Statement), Harold C. Simmons (collectively, the “Reporting Persons”)

By signing this Statement, each Reporting Person agrees that this Statement is filed on its or his behalf.

Contran and Mr. Simmons’ wife are the direct holders of approximately 88.0% and 0.1%, respectively, of the 12,101,932 Shares outstanding as of August 18, 2011 according to information furnished by the Company (the “Outstanding Shares”).  Contran may be deemed to control the Company.

Substantially all of Contran’s outstanding voting stock is held by trusts established for the benefit of certain children and grandchildren of Mr. Simmons (the “Trusts”), of which Mr. Simmons is the sole trustee, or held by Mr. Simmons or persons or other entities related to Mr. Simmons.  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.  Mr. Simmons, however, disclaims beneficial ownership of any shares of Contran stock that the Trusts hold.

Mr. Simmons is chairman of the board of Contran.  By virtue of the holding of this office, the stock ownership and his service as trustee, as described above, (a) Mr. Simmons may be deemed to control Contran and the Company and (b) Mr. Simmons may be deemed to possess indirect beneficial ownership of the Shares directly held by Contran and his wife.  However, Mr. Simmons disclaims beneficial ownership of the Shares beneficially owned by either of them.

Certain information concerning the directors and executive officers of Contran, including offices held by Mr. Simmons, is set forth on Schedule A attached hereto and incorporated herein by reference.
 
 
 
 
 

 
Item 3.
Source and Amount of Funds or Other Consideration

Item 3 is hereby amended or supplemented as set forth below.

Pursuant to a stock purchase agreement (the “Stock Purchase Agreement”) dated August 16, 2011 Contran purchased the following Shares from the following sellers (the “Sellers”) at $9.43 per share as follows:

Seller
  
Shares Purchased from Seller
    
Aggregate Purchase Price
  
             
Corsair Capital Partners, L.P
     657,228     $ 6,197,660.04  
Corsair Capital Partners 100, L.P
     53,016       499,940.88  
Corsair Capital Investors, Ltd.
     87,018       820,579.74  
Corsair Select, L.P.
     629,381       5,935,062.83  
Corsair Select 100, L.P.
     36,708       346,156.44  
Corsair Select Master Fund, Ltd.
     84,271       794,675.53  
Corsair Long Short Partners, L.P.
     3,400       32,062.00  
      1,551,022     $ 14,626,137.46  

The purchase of these 1,551,022 Shares was privately negotiated between Contran and the Sellers, was not executed on the open markets and incurred no brokerage commissions.  Under the terms of the Stock Purchase Agreement, among other things,

·  
each of the Sellers or its affiliates agreed they would not, directly or indirectly, purchase Shares until after August 16, 2016;

·  
each of the Sellers gave a general release to the Company and Contran and their respective officers, directors, employees and other affiliates; and

·  
the Sellers agreed to disgorge to the Company short-swing profits under Section 16(b) of the Securities Exchange Act of 1934, as amended, in the aggregate amount of $105,715.48.

Contran borrowed under its existing revolving credit facility with PlainsCapital Bank to fund the purchase price for the 1,551,022 Shares.  For the terms of the revolving credit facility see the:

·  
Credit Agreement dated as of October 2, 2009 between Contran and PlainsCapital Bank filed as Exhibit 1 of Amendment No. 28 to the Schedule 13D regarding the common stock of Titanium Metals Corporation (Securities Exchange Act File No. 1-14368) that was filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 5, 2010 by Valhi Holding Company (“VHC”), Dixie Rice Agricultural Corporation, Inc., Contran, The Combined Master Retirement Trust, Annette C. Simmons and Harold C. Simmons (the “Schedule 13D Amendment No. 28”);

 
 
 
·  
First Amendment to the Credit Agreement dated as of October 1, 2010 between Contran and PlainsCapital Bank filed as Exhibit 99.B6 to Amendment No. 1 to the Schedule TO regarding the common stock of Keystone Consolidated Industries, Inc. (Securities Exchange Act File No. 1-3919) that was filed with the SEC on February 14, 2011 by Contran (the “Schedule TO Amendment No. 1”);

·  
Guaranty dated as of October 2, 2009 executed by VHC for the benefit of PlainsCapital Bank filed as Exhibit 2 of the Schedule 13D Amendment No. 28;

·  
Pledge and Security Agreement dated October 2, 2009 between VHC and PlainsCapital Bank filed as Exhibit 3 of the Schedule 13D Amendment No. 28;

·  
Collateral Agreement dated October 2, 2009 between Contran and VHC filed as Exhibit 4 of the Schedule 13D Amendment No. 28; and

·  
Pledged Shares Addendum Agreement dated March 5, 2010 between VHC and PlainsCapital Bank filed as Exhibit 99.B5 of the Schedule TO Amendment No. 1.

Item 4.
Purpose of Transaction

Item 4 is hereby amended or supplemented as set forth below.

Contran purchased (the “Purchase”) the 1,551,022 Shares in order to increase its equity interest in the Company.

As a result of the Purchase, Contran’s ownership interest in the Company has exceeded the 80% ownership threshold necessary for the Company to become, and effective August 16, 2011 the Company became, a member of the group of companies consolidated for U.S. federal income tax purposes of which Contran is the parent corporation (the “Contran Tax Group”).

As part of becoming a member of the Contran Tax Group, the Company entered into a Tax Sharing Agreement dated August 16, 2011 with Contran (the “Tax Sharing Agreement”).  In accordance with the Tax Sharing Agreement, Contran’s policy for intercompany allocation of income taxes provides that subsidiaries included in the Contran Tax Group compute their provision for income taxes on a separate company basis.  Generally, subsidiaries make payments to or receive payments from Contran in the amounts they would have paid to or received from the Internal Revenue Service (“IRS”) had they not been members of the Contran Tax Group.  The separate company provisions and payments are computed using the tax elections made by Contran.  There are no tax elections that Contran will currently make that will have any impact on the Company.  Consequently, the amount of payments for income taxes that the Company will make to or receive from Contran is not currently expected to differ from the amount of payments for income taxes that the Company would make to or receive from the IRS had the Company not become a member of the Contran Tax Group.
 
 
 
 
In addition, since the Company is now a member of the Contran Tax Group, the Company will be jointly and severally liable for the federal income tax liability of Contran and the other companies included in the Contran Tax Group for all periods in which the Company is included in the Contran Tax Group.  However, Contran has agreed to indemnify the Company for any liability for income taxes of the Contran Tax Group in excess of the Company’s tax liability previously computed and paid in accordance with its tax allocation policy.  As a member of the Contran Tax Group, the potential federal income tax liability for which the Company would become jointly and severally liable is currently not material, primarily because of net operating loss carryforwards that Contran currently has.  As a result, becoming so jointly and severally liable is not expected to have any material effect on the Company’s financial position, results of operations or liquidity.  In addition, in the event such potential federal income tax liability for which the Company is jointly and severally liable were to become material in the future, the Company would nevertheless not expect such liability to have any material effect on its financial position, results of operations or liquidity, as pursuant to the Tax Sharing Agreement, Contran has agreed to indemnify the Company with respect to the portion of such liability in excess of the Company’s own tax liability.  The description of the Tax Sharing Agreement in this Statement is qualified in its entirety by the actual terms of the Tax Sharing Agreement filed as Exhibit 7 to this Statement.
 
On August 17, 2011, the Company announced it had determined not to proceed with its previously announced proposed subscription rights offering to the Company’s common stockholders and requested the withdrawal of the related registration statement on Form S-1 filed with the SEC.  Such registration statement had not yet been declared effective by the SEC, nor had the Company actually commenced the proposed offering.  The proposed offering contemplated participation by Contran as a subscribing party to the fullest extent possible.  The Company’s commencement of, and Contran’s participation in, the proposed offering was subject to, among other things, the Company and Contran reaching an agreement on the terms of the proposed offering.  Prior to reaching such agreement, Contran completed the Purchase.  As a result of such Purchase, Contran has informed the Company that it no longer intends to subscribe for Shares in connection with the proposed offering.  As disclosed in such registration statement, the Company had reserved the right to terminate or cancel the subscription rights offering at any time and for any reason.

Depending upon their evaluation of the Company’s business and prospects, and upon future developments (including, but not limited to, performance of the Shares in the market, availability of funds, alternative uses of funds, stock market and general economic conditions), the Reporting Persons or other persons or entities that may be deemed to be related to them, may in the future from time to time purchase Shares, and they or other entities that may be deemed to be related to them may from time to time dispose of all or a portion of the Shares held by such persons or entities, or cease buying or selling Shares.  Any such additional purchases or sales of Shares may be in open market or privately negotiated transactions or otherwise.

As described herein, Mr. Simmons, through Contran, may be deemed to control the Company.

The persons named in Schedule A to this Statement are officers and/or directors of the Company or perform services for the Company as employees of Contran and may acquire Shares from time to time pursuant to employee benefit plans that the Company sponsors or other compensation arrangements with the Company or otherwise.

 
 
 
Except as described in this Statement, none of the Reporting Persons nor, to the best knowledge of such persons, any other person named in Schedule A to this Statement has formulated any plans or proposals that relate to or would result in any matter required to be disclosed in response to paragraphs (a) through (j) of Item 4 of Schedule 13D.

Item 5.                 Interest in Securities of the Issuer

There is no change to the prior disclosure under this item except for the following.

(a)           The following entities or persons directly hold the following Shares:

Reporting Person
  
Shares Directly Held
  
       
Contran                                                                                            
     10,647,401  
Annette C. Simmons                                                                                            
     13,457  
Total                                                                                      
     10,660,858  

By virtue of the relationships described under Item 2 of this Statement, Mr. Simmons may be deemed to be the beneficial owner of the 10,660,858 Shares (approximately 88.1% of the Outstanding Shares) that Contran and his wife directly hold.  Mr. Simmons disclaims beneficial ownership of any Shares that he does not hold directly.  Mrs. Simmons disclaims beneficial ownership of any Shares that she does not hold directly

(b)           By virtue of the relationships described under Item 2 of this Statement:

(1)           Contran and Mr. Simmons may be deemed to share the power to vote and direct the disposition of the 10,647,401 Shares (approximately 88.0% of the Outstanding Shares) that Contran holds directly; and

(2)           Mr. Simmons and his wife may be deemed to share the power to vote and direct the disposition of the 13,457 Shares (approximately 0.1% of the Outstanding Shares) that his wife holds directly.

The Reporting Persons understand, based on ownership filings with the Commission or upon information provided by the persons listed on Schedule A to this Statement, that such persons may be deemed to own personally and beneficially the Shares as indicated on Schedule B to this Statement.

(c)           The information included in Item 3 of this Statement is hereby incorporated herein by reference.

(d)           Contran and Mr. Simmons’ wife each has the right to receive and the power to direct the receipt of dividends from, and proceeds from the sale of, the Shares it or she directly holds.

Item 6.
Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer

There is no change to the prior disclosure under this item except for the following.

 
 
 
The information included in Item 4 of this Statement is hereby incorporated herein by reference.

Other than as set forth above, none of the Reporting Persons nor, to the best knowledge of such persons, any person named in Schedule A to this Statement has any contract, arrangement, understanding or relationship (legal or otherwise) with any person with respect to securities of the Company, including, but not limited to, transfer or voting of any such  securities, finder’s fees, joint ventures, loans or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.
 
Item 7.
Material to be Filed as Exhibits.

No change to Item 7 except for the addition of the following.

Exhibit 1                               
Credit Agreement dated as of October 2, 2009 between Contran Corporation and PlainsCapital Bank (incorporated by reference to Exhibit 1 of Amendment No. 28 to a Schedule 13D regarding the common stock of Titanium Metals Corporation (Securities Exchange Act File No. 1-14368) that was filed with the U.S. Securities and Exchange Commission on August 5, 2010 by Valhi Holding Company, Dixie Rice Agricultural Corporation, Inc., Contran Corporation, The Combined Master Retirement Trust, Annette C. Simmons and Harold C. Simmons).
   
Exhibit 2                               
First Amendment to the Credit Agreement dated as of October 1, 2010 between Contran Corporation and PlainsCapital Bank (incorporated by reference to Exhibit 99.B6 to Amendment No. 1 to the Schedule TO regarding the common stock of Keystone Consolidated Industries, Inc. (Securities Exchange Act File No. 1-3919) that was filed with the U.S. Securities and Exchange Commission on February 14, 2011 by Contran Corporation).
   
Exhibit 3                               
Guaranty dated as of October 2, 2009 executed by Valhi Holding Company for the benefit of PlainsCapital Bank (incorporated by reference to Exhibit 2 of Amendment No. 28 to a Schedule 13D regarding the common stock of Titanium Metals Corporation (Securities Exchange Act File No. 1-14368) that was filed with the U.S. Securities and Exchange Commission on August 5, 2010 by Valhi Holding Company, Dixie Rice Agricultural Corporation, Inc., Contran Corporation, The Combined Master Retirement Trust, Annette C. Simmons and Harold C. Simmons).

 
 
 


   
Exhibit 4                               
Pledge and Security Agreement dated October 2, 2009 between Valhi Holding Company and PlainsCapital Bank (incorporated by reference to as Exhibit 3 of Amendment No. 28 to Schedule 13D regarding the common stock of Titanium Metals Corporation  (Securities Exchange Act File No. 1-14368) that was filed with the U.S. Securities and Exchange Commission on August 5, 2010 by Valhi Holding Company, Dixie Rice Agricultural Corporation, Inc., Contran Corporation, The Combined Master Retirement Trust, Annette C. Simmons and Harold C. Simmons).
   
Exhibit 5                               
Collateral Agreement dated October 2, 2009 between Contran Corporation and Valhi Holding Company (incorporated by reference to Exhibit 4 of Amendment No. 28 to a Schedule 13D regarding the common stock of Titanium Metals Corporation (Securities Exchange Act File No. 1-14368) that was filed with the U.S. Securities and Exchange Commission on August 5, 2010 by Valhi Holding Company, Dixie Rice Agricultural Corporation, Inc., Contran Corporation, The Combined Master Retirement Trust, Annette C. Simmons and Harold C. Simmons).
   
Exhibit 6                               
Pledged Shares Addendum Agreement dated March 5, 2010 between Valhi Holding Company and PlainsCapital Bank (incorporated by reference to Exhibit 99.B5 to Amendment No. 1 to the Schedule TO regarding the common stock of Keystone Consolidated Industries, Inc. (Securities Exchange Act File No. 1-3919) that was filed with the U.S. Securities and Exchange Commission on February 14, 2011 by Contran Corporation)
   
Exhibit 7*                               
Tax Agreement dated August 16, 2011 between Contran Corporation and Keystone Consolidated Industries, Inc.


*
Filed herewith.

In the agreements or instruments, as applicable, filed as Exhibits 1 through 7, one party made certain representations and warranties to the other party to the agreement that have been negotiated by such parties.  These representations and warranties are made only to and for the benefit of the respective other party in the context of a business contract, are subject to contractual materiality standards and should not be relied upon for any purposes, including without limitation the making of an investment decision regarding the purchase or sale of securities.  Exceptions to such representations and warranties may be partially or fully waived by the party for whose benefit such representations and warranties are made, in its discretion.

 
 
 

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct.

Date:  August 18, 2011

Contran Corporation




By:       /s/ Steven L. Watson                                                               
Steven L. Watson
President


 
 
 

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct.

Date:  August 18, 2011




/s/ Harold C. Simmons                                                                      
Harold C. Simmons, Individually

 
 
 

SCHEDULE A

The names of the directors and executive officers of Contran and their present principal occupations are set forth below.
 

Name
Present Principal Occupation
   
L. Andrew Fleck
Vice president-real estate of Contran.
   
Robert D. Graham                                                                
Vice president of Contran and Valhi, Inc., a publicly held subsidiary of Contran (“Valhi”), executive vice president of Titanium Metals Corporation, a publicly held subsidiary of Contran (“TIMET”); vice president and general counsel of NL Industries, Inc. (“NL”), a publicly held subsidiary of Valhi; executive vice president and general counsel of Kronos Worldwide, Inc. (“Kronos Worldwide”), a publicly held subsidiary of Valhi; and executive vice president of CompX International Inc., a publicly held subsidiary of NL (“CompX”).
   
J. Mark Hollingsworth                                                                
Vice president and general counsel of Keystone Consolidated Industries, Inc. (the “Company”), Contran, CompX and Valhi.
   
William J. Lindquist                                                                
Director and senior vice president of Contran; senior vice president of Valhi; and chief executive officer of Waste Control Specialists LLC, a subsidiary of Valhi.
   
A. Andrew R. Louis                                                                
Vice president and secretary of CompX, Kronos Worldwide, NL and Valhi; and secretary of Contran.
   
Kelly D. Luttmer                                                                
Vice president and tax director of the Company and Contran; and vice president and global tax director of CompX, Kronos Worldwide, NL, TIMET and Valhi.
   
Bobby D. O’Brien                                                                
President and chief executive officer of TIMET; vice president and chief financial officer of Contran and Valhi.
   
Glenn R. Simmons                                                                
Chairman of the board of the Company and CompX; vice chairman of the board of Contran and Valhi; and a director of Kronos Worldwide, NL and TIMET.

 
 
 


   
Harold C. Simmons                                                                
Chairman of the board of Contran, Kronos Worldwide, TIMET and Valhi; and chairman of the board and chief executive officer of NL.
   
John A. St. Wrba                                                                
Vice president and treasurer of Contran, Kronos Worldwide, NL, TIMET and Valhi.
   
Gregory M. Swalwell                                                                
Vice president and controller of Contran and Valhi; executive vice president and chief financial officer of Kronos Worldwide; vice president, finance and chief financial officer of NL; and vice president of TIMET.
   
Steven L. Watson                                                                
Director and president of Contran; vice chairman and chief executive officer of Kronos Worldwide; vice chairman of TIMET; director, president and chief executive officer of Valhi; and a director of the Company, CompX and NL.

 
 
 


SCHEDULE B

Based upon ownership filings with the Commission or upon information provided by the persons listed on Schedule A to this Statement, such persons may be deemed to personally beneficially own Shares, as outlined below:

Name
Shares Held
Stock Options
Held (1)
Total
       
L. Andrew Fleck
-- 0 --
-- 0 --
-- 0 --
       
Robert D. Graham
-- 0 --
-- 0 --
-- 0 --
       
J. Mark Hollingsworth
-- 0 --
-- 0 --
-- 0 --
       
William J. Lindquist
-- 0 --
-- 0 --
-- 0 --
       
A. Andrew R. Louis
-- 0 --
-- 0 --
-- 0 --
       
Kelly D. Luttmer
-- 0 --
-- 0 --
-- 0 --
       
Bobby D. O’Brien
-- 0 --
-- 0 --
-- 0 --
       
Glenn R. Simmons
-- 0 --
-- 0 --
-- 0 --
       
Harold C. Simmons (2)
13,457
-- 0 --
13,457
       
John A. St. Wrba
-- 0 --
-- 0 --
-- 0 --
       
Gregory M. Swalwell
-- 0 --
-- 0 --
-- 0 --
       
Steven L. Watson
-- 0 --
-- 0 --
-- 0 --

(1)
Represents Shares issuable pursuant to their exercise within 60 days of the date of this Statement of stock options.

(2)
Comprises the 13,457 Shares held directly by his wife.  Does not include other Shares of which Mr. Simmons may be deemed to possess indirect beneficial ownership as described in Items 2 and 5(a) of this Statement.  Mr. Simmons disclaims beneficial ownership of all Shares.

 
 
 

EXHIBIT INDEX


Exhibit 1                               
Credit Agreement dated as of October 2, 2009 between Contran Corporation and PlainsCapital Bank (incorporated by reference to Exhibit 1 of Amendment No. 28 to a Schedule 13D regarding the common stock of Titanium Metals Corporation (Securities Exchange Act File No. 1-14368) that was filed with the U.S. Securities and Exchange Commission on August 5, 2010 by Valhi Holding Company, Dixie Rice Agricultural Corporation, Inc., Contran Corporation, The Combined Master Retirement Trust, Annette C. Simmons and Harold C. Simmons).
   
Exhibit 2                               
First Amendment to the Credit Agreement dated as of October 1, 2010 between Contran Corporation and PlainsCapital Bank (incorporated by reference to Exhibit 99.B6 to Amendment No. 1 to the Schedule TO regarding the common stock of Keystone Consolidated Industries, Inc. (Securities Exchange Act File No. 1-3919) that was filed with the U.S. Securities and Exchange Commission on February 14, 2011 by Contran Corporation).
   
Exhibit 3                               
Guaranty dated as of October 2, 2009 executed by Valhi Holding Company for the benefit of PlainsCapital Bank (incorporated by reference to Exhibit 2 of Amendment No. 28 to a Schedule 13D regarding the common stock of Titanium Metals Corporation (Securities Exchange Act File No. 1-14368) that was filed with the U.S. Securities and Exchange Commission on August 5, 2010 by Valhi Holding Company, Dixie Rice Agricultural Corporation, Inc., Contran Corporation, The Combined Master Retirement Trust, Annette C. Simmons and Harold C. Simmons).
   
Exhibit 4                               
Pledge and Security Agreement dated October 2, 2009 between Valhi Holding Company and PlainsCapital Bank (incorporated by reference to as Exhibit 3 of Amendment No. 28 to Schedule 13D regarding the common stock of Titanium Metals Corporation  (Securities Exchange Act File No. 1-14368) that was filed with the U.S. Securities and Exchange Commission on August 5, 2010 by Valhi Holding Company, Dixie Rice Agricultural Corporation, Inc., Contran Corporation, The Combined Master Retirement Trust, Annette C. Simmons and Harold C. Simmons).
   
Exhibit 5                               
Collateral Agreement dated October 2, 2009 between Contran Corporation and Valhi Holding Company (incorporated by reference to Exhibit 4 of Amendment No. 28 to a Schedule 13D regarding the common stock of Titanium Metals Corporation (Securities Exchange Act File No. 1-14368) that was filed with the U.S. Securities and Exchange Commission on August 5, 2010 by Valhi Holding Company, Dixie Rice Agricultural Corporation, Inc., Contran Corporation, The Combined Master Retirement Trust, Annette C. Simmons and Harold C. Simmons).

 
 
 


   
Exhibit 6                               
Pledged Shares Addendum Agreement dated March 5, 2010 between Valhi Holding Company and PlainsCapital Bank (incorporated by reference to Exhibit 99.B5 to Amendment No. 1 to the Schedule TO regarding the common stock of Keystone Consolidated Industries, Inc. (Securities Exchange Act File No. 1-3919) that was filed with the U.S. Securities and Exchange Commission on February 14, 2011 by Contran Corporation)
   
Exhibit 7*                               
Tax Agreement dated August 16, 2011 between Contran Corporation and Keystone Consolidated Industries, Inc.

*
Filed herewith.


EX-7.1 3 exh7.htm TAX AGREEMENT exh7.htm
Tax Agreement
between
Contran Corporation
and
Keystone Consolidated Industries, Inc.

This Agreement is dated as of August 16, 2011 by and among Contran Corporation (“Contran”), a Delaware corporation having its principal executive offices at Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas   75240 and Keystone Consolidated Industries, Inc. (“Keystone”), a Delaware corporation having its principal executive offices at Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas   75240.

Recitals

A.           Contran and Keystone  are eligible to file consolidated returns of federal income taxes and, subject to certain jurisdictional limitations, will be subject to or continue to be subject to combined state and local tax reporting effective August 16, 2011.

B.           Contran and Keystone wish to provide for the allocation of liabilities, and procedures to be followed, with respect to federal income taxes of Keystone and any subsidiaries of Keystone and with respect to certain combined foreign, state and local taxes on the terms of this Agreement.

Agreement

The parties hereto agree as follows:

Section 1.  Definitions.  As used in this Agreement, the following terms have the meanings set forth below:

(a)           Code:  The Internal Revenue Code of 1986, as amended, and with respect to any section thereof any successor provisions under such Code or any successor Code.

(b)           Combined Foreign, State and Local Taxes:  For a taxable period, the amount of all foreign, state and local taxes, together with all interest and penalties with respect thereto, for which liability is computed (1) on the basis of a combined, unitary or consolidated return (whether at the initiative of the tax authority or of the taxpayer) and (2) by reference to one or more members of the Keystone Group and one or more members of the Contran Group not included in the Keystone Group.

(c)           Contran Corporation:  A Delaware corporation that is the common parent of a group of corporations electing to file a consolidated federal income tax return and certain combined state and local returns.

(d)           Federal Taxes:  All federal income taxes, together with all interest and penalties with respect thereto.

(e)           Contran Group:  Contran and those of its direct and indirect subsidiaries which join in the filing of a consolidated federal income tax return with its common parent, Contran (the “Contran Group”), as such Group is constituted from time to time. For purposes of this Agreement (to the extent related to Combined Foreign, State and Local Taxes), the term “Contran Group” shall include all direct and indirect subsidiaries of Contran with reference to which Combined Foreign, State and Local Taxes are determined.

 
 
 
(f)           Keystone Group:  Keystone Consolidated Industries, Inc. and each direct or indirect subsidiary of Keystone which would be a member of an affiliated group, within the meaning of section 1504(a) of the Code, of which Keystone was the common parent, as such Group is constituted from time to time. For purposes of this Agreement (to the extent related to Combined Foreign, State and Local Taxes) , the term “Keystone Group” shall include all direct and indirect subsidiaries of Keystone with reference to which Combined, Foreign, State and Local taxes are determined.

(g)           Keystone Group Tax Liability:  For a taxable period, the liability for Federal Taxes and Combined Foreign, State and Local taxes, as applicable, that the Keystone Group would have had if it were not a member of the Contran Group during such taxable period (or during any taxable period prior thereto), and instead filed a separate consolidated return for such taxable period (and during all prior taxable periods beginning after August 16, 2011); provided, however, that for purposes of determining such liability for a taxable period all tax elections shall be consistent with the tax elections made by  Contran  for such period. In making such tax elections it is understood the Contran Group will make those tax elections that are beneficial to the Contran Group on a consolidated basis.  Nevertheless, Contran will use its best efforts in the case of those elections which affect the computation of the Keystone Group Tax Liability, to make elections in a reasonable manner so as to minimize the Keystone Group Tax Liability.

Section 2.  Contran as Agent.  Contran shall be the sole agent for the Keystone Group in all matters relating to the Keystone Group Tax Liability. The Keystone Group shall not (a) terminate such agency or (b) without the consent of Contran, participate, or attempt to participate, in any matters related to the Keystone Group Tax Liability, including, but not limited to, preparation or filing of, or resolution of disputes, protests or audits with the Internal Revenue Service, state or local taxing authorities concerning, the Contran Group’s consolidated returns of Federal Taxes, returns of Combined Foreign, State and Local Taxes or the Keystone Group Tax Liability with respect thereto for any taxable period beginning after August 16, 2011. The Keystone Group shall cooperate fully in providing Contran with all information and documents necessary or desirable to enable Contran to perform its obligations under this Section, including completion of Internal Revenue Service and state or local tax audits in connection with such Keystone Group Tax Liability and determination of the proper liability for such Keystone Group Tax Liability.

Section 3.  Liability for Taxes; Refunds.

(a)           Contran, as the common parent of the Keystone Group, shall be responsible for, and shall pay to a taxing authority the consolidated tax liability for the Cotran Group and has the sole right to any refunds received from a taxing authority, as applicable, subject to the provisions of Sections 5 and 6 of this Agreement.

 
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(b)           Notwithstanding any other provision of this Agreement, Keystone and each subsidiary of Keystone which is a member of the Keystone Group shall be severally liable to Contran for the Keystone Group Tax Liability.

(c)           Keystone shall indemnify Contran and hold it and the Contran Group other than the Keystone Group, harmless from and against any deficiency in the Keystone Group Tax Liability that may be due to a taxing authority.

(d)           Contran shall indemnify Keystone and hold it and the Keystone Group harmless from and against any  Federal Taxes and Combined Foreign, State and Local Taxes attributable to the Contran Group or any other member of the Contran Group, other than the Keystone Group, as such taxes are determined under this and other tax sharing agreements.

Section 4.  Tax Returns.  Contran shall  file on behalf of the Keystone Group any and all federal, foreign, state and local tax returns that are required as they pertain to the Keystone Group Tax Liability. The Keystone Group, at Contran’s request, shall join in any applicable consolidated returns of Federal Taxes and any returns of Combined State and Local Taxes (for which returns have not been theretofore filed) and execute its consent to each such filing on any form as may be prescribed for such consent if such consent is required. The decision of Contran’s Tax Director (or any other officer so designated by Contran) with responsibility for tax matters shall, subject to the provisions of this Agreement, be binding in any dispute between Contran and the Keystone Group as to what tax position should be taken with respect to any item or transaction of the Keystone Group.  The preceding sentence is limited to the tax positions that affect the Keystone Group Tax Liability and the Contran Group. In addition, Contran and members of the Contran Group, including members of the Keystone Group, shall provide each other with such cooperation, assistance and information as each of them may request of the other with respect to the filing of any tax return, amended return, claim for refund or other document with any taxing authority.  Keystone shall be solely responsible for all taxes due for the Keystone Group with respect to tax returns filed by Keystone or a member of the Keystone Group that are required to be filed on a separate company basis, independent of Contran.

Section 5.  Payment of Keystone Group Tax Liability for Federal Taxes.  On or before each date, as determined under section 6655 of the Code, for payment of an installment of estimated Federal Taxes, Keystone shall pay to Contran an amount equal to the installment which the Keystone Group would have been required to pay as an estimated payment of Federal Taxes to the Internal Revenue Service if it were filing a separate consolidated return in respect of the Keystone Group Tax Liability. Any balance owed with respect to the Keystone Group Tax Liability for such taxable period shall be paid to Contran on or before the 15th day of the third month after the close of such taxable period. If it is not possible to determine the amount of such balance on or before such day, (a) a reasonable estimate thereof shall be paid on or before such day, (b) the amount of such balance shall be finally determined on or before the earlier of; (i) the 15th day of the ninth month after the close of such taxable period and (ii) the date on which the consolidated tax return containing the Keystone Group for such period is filed with the Internal Revenue Service, and (c) any difference between the amount so determined and the estimated amount paid shall; (i) in the case of an underpayment, be promptly paid to Contran and (ii) in the case of an overpayment, be promptly refunded or applied against the estimated Keystone Group Tax Liability for the immediately following tax period, at the option of Contran. If the overpayment is not applied to the immediately following tax period, such overpayment shall be promptly refunded to the Keystone Group.  As between the parties to this Agreement, the Keystone Group shall be solely responsible for the Keystone Group Tax Liability and shall have no responsibility for Federal Taxes of the Contran Group other than payment of the Keystone Group Tax Liability in accordance with the terms of this Agreement.

 
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Section 6.  Refunds for Keystone Group  Losses and Credits for Federal Taxes.  If  the calculation with respect to the Keystone Group Tax Liability for Federal Taxes results in a net operating loss (“NOL”) for the current tax period that, in the absence of a Code Section 172(b)(3)  election made by  Contran, is carried back under Code Sections 172 and 1502 to a prior taxable period or periods of the Keystone Group with respect to which the Keystone Group previously made payments to Contran, then, in that event, Contran shall pay (or credit) Keystone an amount equal to the tax refund to which the Keystone Group would have been entitled had the Keystone Group filed a separate consolidated federal income tax return for such year (but not in excess of the net aggregate amount of the Keystone Group Tax Liability paid to Contran with respect to the preceding two taxable periods).  If the calculation with respect to the Keystone Group Tax Liability results in an NOL for the current tax period, that subject to the Code Section 172(b)(3) election made by Contran, is not carried back under Code Sections 172 and 1502 to a prior taxable period or periods of the Keystone Group with respect to which Keystone made payments to Contran or is not carried back because the Contran Group does not have a consolidated net operating loss for the current tax period, then, in that event such NOL shall be an NOL carryover to be used in computing the Keystone Group Tax Liability for future taxable periods, under the law applicable to NOL carryovers in general, as such law applies to the relevant taxable period.  Furthermore, if the Keystone Group would have been entitled to a refund of Federal Taxes for any year had the Keystone Group filed a separate consolidated federal income tax return for the loss year and the carryback year, Contran shall pay to Keystone the amount which Keystone would have received as a refund from the Internal Revenue Service.  Payments made pursuant to this Section 6 shall be made on the date that Contran (or any successor common parent of a tax group to which the Contran Group is a member) files its consolidated federal income tax return for the taxable period involved.  Principles similar to those discussed in this Section 6 shall apply in the case of the utilization of all Keystone Group  loss and credit carrybacks and carryovers.

Section 7.  Payment of Keystone Group Tax Liability for Foreign, State and Local Taxes.  The foregoing principles contained in Sections 5 and 6 shall apply in similar fashion to any consolidated or combined foreign, state or other local income tax returns, containing any member of the Contran Group and any member of the Keystone Group that is not also a member of the Contran Group, which may be filed.

Section 8.  Subsequent Adjustments.  If any settlement with the Internal Revenue Service, foreign, state or local tax authority or court decision which has become final results in any adjustment to any item of income, deduction, loss or credit to the Contran Group in respect of any taxable period subject to this Agreement, which, in any such case, affects or relates to any member of the Keystone Group as constituted during such taxable period, the Keystone Tax Group Liability shall be redetermined to give effect to such adjustment as if it had been made as part of or reflected in the original computation of the Keystone Tax Group Liability and proper adjustment of amounts paid or owing hereunder in respect of such liability and allocation shall be promptly made in light thereof.

 
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Section 9.  Amendments.  This Agreement may be amended, modified, superseded or cancelled, and any of the terms, covenants, or conditions hereof may be waived, only by a written instrument specifically referring to this Agreement and executed by both parties (or, in the case of a waiver, by or on behalf of the party waiving compliance). The failure of either party at any time or times to require performance of any provision of this Agreement shall in no manner affect the right at a later time to enforce the same. No waiver by either party of any condition, or of any breach of any term or covenant, contained in this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such condition or breach, or a waiver of any other condition or of any breach of any other term or covenant.

Section 10.  Retention of Records.  Contran shall retain all tax returns, tax reports, related workpapers and all schedules (along with all documents that pertain to any such tax returns, reports or workpapers) that relate to a taxable period in which the Keystone Group is included in a consolidated or combined tax return with Contran.   Contran shall make such documents available to Keystone at Keystone’s request.   Contran shall not dispose of such documents without the permission of Keystone.

Section 11.  Headings.  The headings of this Agreement are for convenience of reference only, and shall not in any way affect the meaning or interpretation of this Agreement.

Section 12.  Governing Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware without regard to its conflicts of laws provisions.

Section 13.  Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be an original, but all of which shall constitute but one agreement.

Section 14.  Successors.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective subsidiaries, and their respective successors and assigns.

Section 15.  Effective Date.  This Agreement shall be effective as of August 16, 2011.

 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above written.



Contran Corporation



By:       /s/ Kelly D. Luttmer                                                              
Kelly D. Luttmer
Vice President and Tax Director


ATTEST:



/s/ Gregory M. Swalwell                                                           
Vice President and Controller
Contran Corporation

Keystone CONSOLIDATED
 INDUSTRIES, INC.



By:       Bert E. Downing, Jr.                                                              
Bert E. Downing, Jr.
Vice President, Chief Financial Officer, Corporate Controller and Treasurer


ATTEST:



/s/ Sandra K. Myers                                                           
Corporate Secretary
Keystone Consolidated Industries, Inc.


 
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