11 21 06 8ka
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K/A
AMENDMENT NO. 1
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of
report (Date of earliest event reported) November 8,
2006
(Exact
name of registrant as specified in its charter)
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Delaware
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1-7677
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73-1015226
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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16
South Pennsylvania, Oklahoma City, Oklahoma
(Address
of principal executive offices)
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73107
(Zip
Code) |
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Registrant's
telephone number, including area code (405) 235-4546
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Explanatory
Note: This
Form
8-K/A amends Item 1.01 of the Current Report on Form 8-K filed by LSB
Industries, Inc. (the “Company”) with the Securities and Exchange Commission on
November 14, 2006, to correct the disclosure of the Jayhawk Group’s beneficial
ownership of the Company’s common stock. This Form 8-K/A also amends the
original Current Report on Form 8-K to include Item 9.01.
Section
1 - Registrant’s Business and Operations
Item
1.01
Entry
into a Material Definitive Agreement.
On
November 10, 2006, the Company entered into an Agreement (the “Agreement”)
with Kent C. McCarthy, Jayhawk Capital Management, L.L.C., Jayhawk Institutional
Partners, L.P., and Jayhawk Investments, L.P. (collectively, the “Jayhawk
Group”). The Agreement provides that if the Company undertakes, in its sole
discretion, within one (1) year from the date of the Agreement, a tender
offer for, or exchange of, the Company’s $3.25 Convertible Exchangeable Class C
Preferred Stock, Series 2 (the “Series 2 Preferred”) that the Jayhawk Group will
either exchange or deliver to the Company pursuant to a tender offer by the
Company, 180,450 shares of the Series 2 Preferred owned by the Jayhawk Group
for
1,335,330 shares of the Company’s common stock, based on 7.4 shares of common
stock for each share of Series 2 Preferred surrendered to the Company in the
transaction.
In
connection with the contemplated exchange or tender offer, the Agreement further
provides that the Jayhawk Group would waive its rights to all accrued and unpaid
dividends on the Series 2 Preferred tendered or exchanged. As of the date of
this report, the accrued and unpaid dividend on the Series 2 Preferred was
$23.2625 per share. Accordingly, if a tender offer or exchange is completed,
the
Jayhawk Group would waive a total of approximately $4.2 million in accrued
and
unpaid dividends on the 180,450 shares of Series 2 Preferred which would be
surrendered to the Company.
The
terms
of the Series 2 Preferred generally provide that whenever dividends on the
Series 2 Preferred are in arrears and unpaid in an amount equal to at least
six
quarterly dividends: (a) the number of members of the Board of Directors of
the Company shall be increased by two; and (b) the Series 2 Preferred
holders have the exclusive right to vote for and elect two additional directors
until the payment of accrued and unpaid dividends on the Series 2 Preferred.
In
2002, the holders of the Series 2 Preferred, including the Jayhawk Group (which
holds a majority of the Series 2 Preferred), elected two directors pursuant
to
the terms of the Series 2 Preferred. The Series 2 Preferred holders have the
right to remove without cause at any time and replace either of the two
directors that the Series 2 Preferred holders have elected.
As
a
condition to the contemplated transaction, the Agreement provides that the
Jayhawk Group agrees to vote its Company common stock and Series 2 Preferred
to
amend the Series 2 Preferred’s Certificate of Designations to (a) allow the
Company to acquire shares of its common stock for a period of five years from
the date of completion of the transaction, without the approval of the holders
of the Series 2 Preferred, notwithstanding that accrued and unpaid dividends
may
exist with respect to the Series 2 Preferred, and (b) provide that the
existing right of the holders of Series 2 Preferred to elect two directors
to
the Company’s Board of Directors when dividends on the Series 2 Preferred are
unpaid may be exercised only if and so long as at least 140,000 shares of Series
2 Preferred remain issued and outstanding (together, the “Amendments”).
The
Agreement further provides that any such exchange or tender offer would be
subject to (a) the Company receiving a fairness opinion for the
transaction, (b) the listing on the American Stock Exchange (“AMEX”) of the
common stock to be issued in the transaction, (c) the approval by the holders
of
the Company’s common stock and Series 2 Preferred of the Amendments, and if
required by the rules of the AMEX, the approval by the holders of the Company’s
common stock of the issuance of the shares of common stock pursuant to the
transaction, and (d) Jack E. Golsen (Chairman of the Board and CEO of the
Company), his wife, children and certain entities controlled by them (the
“Golsen Group”) shall only exchange or tender 26,467 shares of the 49,550 shares
of Series 2 Preferred beneficially owned by them. As the beneficial and record
of 340,900 shares of Series 2 Preferred, the Jayhawk Group has the power to
vote
68.3% of the total votes held by all holders of Series 2 Preferred following
the
exchanges described in Item 3.02 of this report, which is sufficient to
approve the Amendments on behalf of the Series 2 Preferred.
As
of
October 31, 2006, the Jayhawk Group owned of record 1,124,700 shares of the
Company’s common stock and 340,900 shares of the Series 2 Preferred. As of that
date, the Jayhawk Group was the beneficial owner of 2,854,206 shares of the
Company’s common stock, representing approximately 17.56% of the Company’s
issued and outstanding common stock, which includes 1,475,756 shares of common
stock issuable upon conversion of 340,900 shares of Series 2 Preferred and
253,750 shares of common stock issuable under other Company securities owned
by
Jayhawk Group.
In
light
of the Agreement and the transactions contemplated by the Agreement, as of
the
date of this report, the Company is considering, but has not made a final
determination, to undertake a tender offer for all of the issued and outstanding
shares of Series 2 Preferred, except as limited in the Agreement with respect
to
the Jayhawk Group and the Golsen Group. A tender offer for the Series 2
Preferred would be subject to the approval of the Company’s Board of Directors
and the conditions set forth in the Agreement.
The
Agreement was solicited by the Jayhawk Group and negotiated with the Jayhawk
Group. Neither the Company nor any of member of the Jayhawk Group has paid
or
given, or agreed to pay or give, directly or indirectly, any commission or
other
remuneration in connection with the Agreement. If the Company elects to initiate
an exchange or a tender offer, the transaction will be conducted under the
exemption from registration provided by Section 3(a)(9) the Securities Act
of 1933, as amended (the “Act”). The Series 2 Preferred is registered with the
Securities and Exchange Commission under the Form S-2 Registration Statement
No. 33-61640, effective May 19, 1993, and, as such, the Company
believes that the shares of common stock issued pursuant to Section 3(a)(9)
of the Act in exchange for the Series 2 Preferred will be freely tradable by
the
recipient of the shares and will not be considered restricted securities under
Rule 144 of the Act.
On
November 21, 2006, the Company issued a press release announcing the Agreement
with the Jayhawk Group, a copy of which is attached as Exhibit 99.1 to this
Form
8-K/A.
This
report is not an offer or a
solicitation of an offer to sell or exchange any security.
Section
9 - Financial Statements and Exhibits
Item
9.01
Financial
Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
99.1 Press
Release, dated November 21, 2006
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has
duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Dated:
November
21, 2006
LSB
INDUSTRIES, INC.
By:
/s/
Tony
M. Shelby
Tony
M.
Shelby,
Executive
Vice President and
Chief
Financial Officer