|
DELAWARE
(State
or other jurisdiction
of
incorporation or organization
|
2810
(Primary
Standard Industrial
Classification
Code Number)
|
73-1015226
(I.R.S.
Employer
Identification
Number)
|
|
•
|
Climate
Control Business, which is engaged in the manufacturing and selling
of a
broad range of heating, ventilation and air conditioning products
used in
commercial and residential new building construction, renovation
of
existing buildings and replacement of existing systems;
and
|
|
•
|
Chemical
Business, which is engaged in the manufacturing and selling of chemical
products produced from three plants in Texas, Arkansas and Alabama
for the
industrial, mining and agricultural markets.
|
|
Issuer
|
LSB
Industries, Inc.
|
|
Selling
Security Holders
|
The
securities to be offered and sold using this prospectus will be offered
and sold by the Selling Security Holders named in this prospectus,
or in
any amendment or supplement to this prospectus. See “Selling Security
Holders.”
|
|
Securities
covered by this prospectus
|
$1,000,000
aggregate principal amount of 7% convertible senior subordinated
debentures due 2011. A total of $18,000,000 aggregate principal amount
of
the debentures were included in the original prospectus included
in the
registration statement, and $17,000,000 aggregate principal amount
of such
debentures were converted prior to the date of this prospectus into
shares
of common stock. In connection with certain of the prior conversions,
we
agreed to pay certain holders interest through the March 1, 2007,
interest
payment date, although the debentures owned by them were converted
prior
to such time. Only $1,000,000 aggregate principal amount of the debentures
remain outstanding as of the date of this prospectus. We have been
informed by the holder of the remaining $1,000,000 principal amount
of
debentures that it intends to convert the debentures into common
stock.
See “Recent Development.”
|
|
2,542,500
shares of common stock, par value $0.10 per share. Of such number,
2,401,248 shares have been issued upon conversion of $17,000,000
aggregate
principal amount of the debentures.
|
|
Maturity
date of debentures
|
March
1, 2011, unless earlier converted, redeemed or
repurchased.
|
|
Interest
on debentures
|
7%
per annum on the principal amount, from March 3, 2006, payable
semi-annually in arrears in cash on March 1 and September 1 of each
year,
beginning September 1, 2006.
|
|
Ranking
of debentures
|
The
debentures are unsecured and subordinated in right of payment to
the prior
payment in full of all of our existing and future senior indebtedness
and
effectively subordinated to the indebtedness and all of the other
liabilities, including trade payables, of our subsidiaries. As of
December
31, 2006, we had approximately $116.4 million of senior indebtedness
outstanding, including approximately $91.5 million of indebtedness
of our
subsidiaries which we have guaranteed. The debentures will also
effectively be subordinated to all other present or future liabilities,
including our subsidiaries’ trade payables, which as of December 31, 2006,
totaled approximately $45.7 million. Therefore, as of December 31,
2006,
the debentures are effectively subordinate to a total of $162.1 million
of
senior indebtedness, including the liabilities of our subsidiaries.
Additionally, the debentures may be subordinated to approximately
$6.95
million senior unsecured debentures due 2007 which the Company owned
as of
December 31, 2006. See “Risk Factors.” Neither we nor our subsidiaries are
prohibited from incurring additional debt, including senior indebtedness,
under the indenture.
|
|
Conversion
of debentures
|
The
debentures are convertible by holders in whole or in part into shares
of
our common stock, at any time prior to their maturity on March 1,
2011.
The conversion rate of debentures for holders electing to convert
all or
any portion of a debenture prior to September 1, 2006, was 125 shares
per
$1,000 principal amount of debentures (representing a conversion
price of
$8.00 per share) and the conversation rate for the period from September
1, 2006 to February 28, 2007 was 141.25 shares per $1,000 principal
amount
of debentures (representing a conversion price of approximately $7.08
per
share). Holders of debentures electing to convert all or any portion
of a
debenture on or after March 1, 2007, and before March 1, 2009, will
obtain
the following conversion rate per $1,000
|
|
principal
amount of debentures during the dates indicated: March 1, 2007 to
August
31, 2007, 141.04 shares (representing a conversion price of approximately
$7.09 per share); September 1, 2007 to February 29, 2008, 137.27
shares
(representing a conversion price of approximately $7.28 per share);
March
1, 2008 to August 31, 2008, 133.32 shares (representing a conversion
price
of approximately $7.50 per share); and September 1, 2008 to February
28,
2009 is 129.23 shares (representing a conversion price of approximately
$7.74 per share). On March 1, 2009, the conversion rate returns to
125
shares per $1,000 principal amount of debentures (representing a
conversion price of $8.00 per share), until their maturity on March
1,
2011. The conversion rate is subject to adjustment. See “Description of
Debentures—Conversion of debentures.”
|
|
If
a holder elects to convert its debentures in connection with certain
changes in control, as defined herein, which occur prior to the maturity
date, the holder will be entitled to receive additional shares of
our
common stock as a make-whole premium upon conversion under certain
circumstances. See “Description of Debentures — Conversion of
debentures.”
|
| Sinking fund as to debentures | None. |
|
Optional
redemption of debentures
|
Beginning
March 1, 2009, we may redeem the debentures either in whole or in
part,
upon at least 30 and not more than 60 days’ notice, at a redemption price,
payable at our option in cash or, subject to certain conditions (see
“—
Payment of debentures in shares” below), shares of our common stock, equal
to 100% of the principal amount of the debentures to be redeemed,
plus
accrued and unpaid interest thereon to, but excluding, the redemption
date, if: (1) the closing sale prices of our common stock for at
least 20
of the 30 consecutive trading days ending on the trading day prior
to the
date we mail a notice of redemption, exceeds 115% of the adjusted
conversion price of the debenture; (2) our common stock is listed
on a
U.S. national securities exchange or the NASDAQ Stock Market; and
(3) a
registration statement covering resales of the debentures and the
common
stock issuable upon conversion of the debentures is effective and
expected
to remain effective and available for use during the 30 days following
the
redemption date, unless registration is no longer required. See
“Description of Debentures — Optional redemption by
LSB.”
|
|
Payment
of debentures in shares
|
We
may elect to pay the redemption price in shares of our common stock
if, on
the date of redemption: (1) our common stock is listed on a U.S.
national
securities exchange or the NASDAQ Stock Market; (2) the shares used
to pay
the redemption price are freely tradeable; and (3) we receive certain
required opinions of counsel. Payments made with shares of our common
stock will be valued at 95% of the weighted average of the closing
sale
prices of our common stock for the 20 consecutive trading days ending
on
the fifth trading day prior to the redemption date. We will publicly
announce the number of shares of our common stock to be paid as the
redemption price, per each $1,000 principal amount of debentures
to be
redeemed, not later than the fourth trading day prior to the redemption
date.
|
|
We
may elect to pay, at maturity, up to 50% of the principal amount
of the
debentures, plus accrued and unpaid interest due thereon at maturity,
in
shares of our common stock if, on the maturity date: (1) our common
stock
continues to be listed on a U.S. national securities exchange or
the
NASDAQ Stock Market, (2) the shares used to pay the debentures and
any
interest thereon are freely tradeable, and (3) we receive certain
required
opinions of counsel. Payments made with our shares of common stock
will be
valued at 95% of the weighted average of the closing prices of our
common
stock for the 20 consecutive trading days ending on the fifth trading
day
prior to the maturity date. We will publicly announce the number
of shares
of our common stock to be paid per
|
|
each
$1,000 principal amount of debentures on the maturity date, not later
than
the fourth trading day prior to the maturity
date.
|
|
of
the holder upon a designated event
|
If
a designated event (as described under “Description of Debentures —
Repurchase at option of the Holder upon a designated event”) occurs prior
to maturity, holders may require us to purchase, in cash, all or
part of
the holder’s debentures at a repurchase price equal to 101% of their
principal amount, plus accrued and unpaid interest thereon to, but
excluding, the repurchase date.
|
|
Make-whole
premium of debentures
|
If
a fundamental change occurs on or before September 1, 2009, we will
pay a
make-whole premium on the debentures converted in connection with
the
fundamental change, payable in shares of our common stock or the
consideration into which our common stock has been converted or exchanged
in connection with the fundamental change. The amount of the make-whole
premium, if any, will be based on the stock price in the fundamental
change transaction and the date of the fundamental change transaction.
A
description of how the make-whole premium will be determined and
a table
showing the make-whole premium that would apply at various stock
prices
and effective dates is set forth under “Description of Debentures -
Conversion of debentures—Make-whole
premium.”
|
|
No
proceeds
|
We
will not receive any proceeds from the sale made from time to time
under
this prospectus by the Selling Security Holders of the debentures
or our
common stock. See “No Proceeds.”
|
|
Registration
rights
|
We
entered into a registration rights agreement with each Selling Security
Holder and filed a registration statement with the SEC covering the
resale
of the debentures and the common stock issuable upon conversion of
the
debentures. The registration statement was declared effective by
the SEC
on May 26, 2006. We agreed to use commercially reasonable efforts
to keep
the registration statement effective until the earlier of the date
that
all registrable securities have ceased to be registrable securities
or
three years following the closing of the issuance of the debentures,
which
is March 3, 2009. This prospectus is part of the registration statement.
See “Description of Debentures — Registration rights of the debenture
holders.”
|
|
the
Debentures
|
We
cannot assure you that any active or liquid market will develop for
the
debentures. See “Plan of
Distribution.”
|
|
Trading
|
We
do not intend to apply to list the debentures on any national securities
exchange or to include the debentures in any automated quotation
system.
Qualified institutional buyers may trade the debentures in the Private
Offerings, Resale and Trading through Automated Linkages Market,
commonly
referred to as the PORTAL Market. The debentures sold using this
prospectus, however, will no longer be eligible for trading in the
PORTAL
Market.
|
|
Custodian
Agent for debentures
|
UMB
Bank, n.a.
|
|
for
our common stock
|
Our
common stock is quoted on the American Stock Exchange under the symbol
“LXU.”
|
|
Transfer
Agent for our common stock
|
UMB
Bank, n.a.
|
|
Risk
Factors
|
You
should read the “Risk Factors” section, beginning on page 6 of this
prospectus, to understand the risks associated with an investment
in the
debentures or our common stock.
|
|
|
·
|
will
rise to the level of an investigation or proceeding, or
|
|
·
|
will
result in an enforcement action, if any, by the SEC.
|
| · |
we
may be more vulnerable to a downturn in general economic
conditions.
|
| · |
funds
available to us for our operations and general corporate purposes
or for
capital expenditures will be reduced because a substantial portion
of our
consolidated cash flow from operations could be dedicated to
the payment
of the principal and interest on our
indebtedness;
|
| · |
we
may be more highly leveraged than some of our competitors, which
may place
us at a competitive
disadvantage;
|
| · |
the
agreements
governing our long-term indebtedness, including indebtedness
under the
debentures, and those of our subsidiaries (including indebtedness
under
the debentures) and bank loans contain certain restrictive
financial and
operating
covenants;
|
| · |
an
event of default, which is not cured or waived, under financial
and
operating covenants contained in these debt instruments could
occur and
have a material adverse effect on us;
and
|
| · |
we
may be more vulnerable to a downturn in general economic
conditions.
|
|
·
|
our
Climate Control Business has developed leadership positions in niche
markets by offering extensive product lines, customized products
and
improved technologies,
|
|
·
|
we
have developed the most extensive line of water source heat pumps
and
hydronic fan coils in the United States,
|
|
·
|
we
have used geothermal technology in the climate control industry to
create
the most energy efficient climate control systems commercially available
today,
|
|
·
|
we
are a leading provider of geothermal and water source heat pumps
to the
commercial construction and renovation markets in the United
States,
|
|
·
|
the
market for commercial water source heat pumps will continue to grow
due to
the relative efficiency and long life of such systems as compared
to other
air conditioning and heating systems, as well as to the emergence
of the
replacement market for those systems,
|
|
·
|
we
are the largest domestic merchant marketer of concentrated and blended
nitric acids,
|
|
·
|
the
longer life, lower cost to operate, and relatively short payback
periods
of geothermal systems, as compared with air-to-air systems, will
continue
to increase demand for our geothermal products,
|
|
·
|
our
Climate Control Business is a leading provider of hydronic fan
coils,
|
|
·
|
the
amount of capital expenditures relating to the Climate Control Business
and related increase in our capacity to produce and distribute Climate
Control products,
|
|
·
|
obtaining
raw materials for our Climate Control Business,
|
|
·
|
the
majority of raw material cost increases, if any, will be passed to
our
customers in the form of higher prices as product price increases
are
implemented and take effect and while we believe we will have sufficient
materials, a shortage of raw materials could impact production of
our
Climate Control products,
|
|
·
|
our
Climate Control Business manufactures a broader line of geothermal
and
water source heat pump and fan coil products than any other manufacturer
in the United States,
|
|
·
|
we
are competitive as to price, service, warranty and product performance
in
our Climate Control Business,
|
|
·
|
our
Climate Control Business will continue to launch new products and
product
upgrades in an effort to maintain and increase our current market
position
and to establish a presence in new markets,
|
|
·
|
shipping
substantially all of our backlog at December 31, 2006 within twelve
months,
|
|
·
|
utilizing
additional space at other facilities for distribution purposes for
the
Climate Control Business,
|
|
·
|
the
prospects for these new product lines in the Climate Control Business
are
improving and that these products will contribute favorably in the
future,
|
|
·
|
increasing
the sales and operating margins of all products, developing and
introducing new and energy efficient products, and increasing production
to meet customer demand in the Climate Control Business,
|
|
·
|
our
performance has been and will continue to be dependent upon the efforts
of
our principal executive officers and our future success will depend
in
large part on our continued ability to attract and retain highly
skilled
and qualified personnel,
|
|
·
|
our
net loss carryovers may be used to reduce the federal income tax
payments
which we would otherwise be required to make with respect to income,
if
any, generated in future years,
|
|
·
|
retain
most of our future earnings, if any, to provide funds for our operations
and/or expansion of our businesses, paying dividends on our common
stock,
|
|
·
|
the
concentration relating to receivable accounts of ten customers at
December
31, 2006 does not represent a significant credit risk due to the
financial
stability of these customers,
|
|
·
|
the
"E-2" brand ammonium nitrate fertilizer is recognized as a premium
product
within our primary market,
|
|
·
|
the
agricultural products are the only seasonal products,
|
|
·
|
competition
within the Chemical Business is primarily based on service, price,
location of production and distribution sites, and product quality
and
performance,
|
|
·
|
the
ADEQ allowing EDC to directly discharge its wastewater into the
creek,
|
|
·
|
the
ADEQ issuing the wastewater permit modification during the third
quarter
of 2007,
|
|
·
|
EDC
using the City’s sewer discharge system is a feasible option,
|
|
·
|
the
joint pipeline group and opposing residents will appeal the final
permit,
|
|
·
|
the
amount of and ability to obtain financing for discharging the wasterwater
at El Dorado,
|
|
·
|
the
amount of additional expenditures relating to the Air CAO,
|
|
·
|
the
amount of costs under the proposal submitted to the KDHE will be
substantially less than the cost of the soil excavation,
|
|
·
|
our
Chemical Business to focus on growing our non-seasonal industrial
customer
base with the emphasis on customers that accept the risk inherent
with raw
material costs, while maintaining a strong presence in the seasonal
agricultural sector,
|
|
·
|
obtaining
our requirements for raw materials in 2007,
|
|
·
|
the
amount of committed capital expenditures for 2007,
|
|
·
|
liquidity
and availability of funds,
|
|
·
|
anticipated
financial performance,
|
|
·
|
adequate
resources to meet our obligations as they come due,
|
|
·
|
ability
to make planned capital improvements,
|
|
·
|
new
and proposed requirements to place additional security controls over
ammonium nitrate and other nitrogen fertilizers will not materially
affect
the viability of ammonium nitrate as a valued product,
|
|
·
|
under
the terms of an agreement with a supplier, EDC purchasing a majority
of
its anhydrous ammonia requirements through December 31, 2008,
|
|
·
|
ability
to obtain anhydrous ammonia from other sources in the event of an
interruption of service under our existing purchase
agreement,
|
|
·
|
meeting
all required covenant tests for all quarters and the year ending
in
2007,
|
|
·
|
our
primary efforts to improve the results of our Chemical Business include
securing increased non-seasonal sales volumes with an emphasis on
customers that will accept the commodity risk with natural gas and
anhydrous ammonia, and
|
|
·
|
environmental
and health laws and enforcement policies thereunder could result,
in
compliance expenses, cleanup costs, penalties or other liabilities
relating to the handling, manufacture, use, emission, discharge or
disposal of pollutants or other substances at or from our facilities
or
the use or disposal of certain of its chemical
products.
|
|
·
|
decline
in general economic conditions, both domestic and
foreign
|
|
·
|
material
reduction in revenues,
|
|
·
|
material
increase in interest rates,
|
|
·
|
ability
to collect in a timely manner a material amount of
receivables,
|
|
·
|
increased
competitive pressures,
|
|
·
|
changes
in federal, state and local laws and regulations, especially environmental
regulations, or in interpretation of such, pending,
|
|
·
|
additional
releases (particularly air emissions) into the environment,
|
|
·
|
material
increases in equipment, maintenance, operating or labor costs not
presently anticipated by us,
|
|
·
|
the
requirement to use internally generated funds for purposes not presently
anticipated,
|
|
·
|
the
inability to secure additional financing for planned capital
expenditures,
|
|
·
|
the
cost for the purchase of anhydrous ammonia and natural gas,
|
|
·
|
changes
in competition,
|
|
·
|
the
loss of any significant customer,
|
|
·
|
changes
in operating strategy or development plans,
|
|
·
|
inability
to fund the working capital and expansion of our businesses,
|
|
·
|
adverse
results in any of our pending litigation,
|
|
·
|
inability
to obtain necessary raw materials,
|
|
·
|
other
factors described in "Management's Discussion and Analysis of Financial
Condition and Results of Operation" incorporated by reference into
in this
prospectus, and
|
|
·
|
other
factors described in “Risk Factors.”
|
|
·
|
Our
2006 Annual Report on Form 10-K, for the fiscal year ended December
31,
2006, which includes, without limitation, information with respect
to our
business, properties, legal proceedings, certain stockholder matters,
financial statements, selected financial data, supplementary financial
information, management’s discussion and analysis of financial condition
and results of operations, dividend policy, and quantitative and
qualitative disclosures about market risk;
|
|
·
|
Our
Current Reports on Form 8-K filed on January 12, January 29, February
9,
March 6, March 13, and March 26, 2007;
and
|
|
·
|
Our
Proxy Statement, filed on February 6, 2007, relating to the Special
Meeting of Stockholders held March 6,
2007.
|
|
Our
historical consolidated ratio of earnings to fixed charges as presented
below for the periods shown.
|
|
Calendar
Year ended December 31,
|
||||||||||||||||
|
2002
|
2003
|
2004
|
2005
|
2006
|
||||||||||||
|
Earnings:
|
||||||||||||||||
|
The
sum of:
|
||||||||||||||||
|
Pre-tax
income from continuing operations
|
$
|
2,739
|
$
|
2,894
|
$
|
1,238
|
$
|
5,119
|
$
|
16,263
|
||||||
|
Fixed
charges
|
13,476
|
10,882
|
11,955
|
15,936
|
16,570
|
|||||||||||
|
Amortization
of capitalized interest
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
|
Share
of distributed income of 50% owned affiliate
|
115 |
60
|
250
|
488 |
875
|
|||||||||||
|
Adjusted
Earnings
|
$
|
16,330
|
$
|
13,836
|
$
|
13,443
|
$
|
21,543
|
$
|
33,708
|
||||||
|
Fixed
Charges(1):
|
||||||||||||||||
|
The
sum of
|
||||||||||||||||
|
(i)
Interest expensed
|
$
|
8,218
|
$
|
6,097
|
$
|
7,393
|
$
|
11,407
|
$
|
11,915
|
||||||
|
(ii)
Amortized premiums, discounts and capitalized expenses related
to
indebtedness (included in interest)
|
-
|
-
|
-
|
-
|
-
|
|||||||||||
|
(iii)
Estimate of Interest inrental expense
|
5,258
|
4,785
|
4,562
|
4,529
|
4,655
|
|||||||||||
|
Fixed
Charges
|
$
|
13,476
|
$
|
10,882
|
$
|
11,955
|
$
|
15,936
|
$
|
16,570
|
||||||
|
Ratio
of earnings to fixed charges
|
1.2:1
|
1.3:1
|
1.1:1
|
1.4:1
|
2.0:1
|
|||||||||||
|
Common
stock price
|
|||
|
High
|
Low
|
||
|
Fiscal
year ending December 31, 2007:
|
|||
|
First
quarter
|
$15.71
|
$11.41
|
|
|
Fiscal
year ending December 31, 2006:
|
|||
|
Fourth
quarter
|
$13.20
|
$8.50
|
|
|
Third
quarter
|
$10.25
|
$8.25
|
|
|
Second
quarter
|
$9.19
|
$6.95
|
|
|
First
quarter
|
$7.48
|
$5.87
|
|
|
Fiscal
year ended December 31, 2005:
|
|||
|
Fourth
quarter
|
$6.70
|
$4.84
|
|
|
Third
quarter
|
$7.35
|
$6.05
|
|
|
Second
quarter
|
$7.50
|
$6.00
|
|
|
First
quarter
|
$7.93
|
$5.95
|
|
|
Conversion
Rate
(Number
of Shares Per
$1,000
Principal Amount
of
Debentures)
|
Approximate
Conversion
Price
|
Date
of Debenture Conversion
|
|
125.00
|
$8.00
|
before
September 1, 2006(1)
|
|
141.25
|
$7.08
|
on
or after September 1, 2006 and on or before February 28, 2007(1)
|
|
141.04
|
$7.09
|
on
or after March 1, 2007 and on or before August 31, 2007
|
|
137.27
|
$7.28
|
on
or after September 1, 2007 and on or before February 29,
2008
|
|
133.32
|
$7.50
|
on
or after March 1, 2008 and on or before August 31, 2008
|
|
129.23
|
$7.74
|
on
or after September 1, 2008 and on or before February 28,
2009
|
|
125.00
|
$8.00
|
on
or after March 1, 2009
|
| · |
complete
and manually sign the conversion notice on the back of the debenture
or
facsimile of the conversion notice and deliver this notice to the
conversion agent;
|
| · |
surrender
the debenture to the conversion
agent;
|
| · |
if
required, furnish appropriate endorsements and transfer
documents;
|
| · |
if
required, pay all transfer or similar taxes;
and
|
| · |
if
required, pay funds equal to interest payable on the next interest
payment
date.
|
| (1) |
the
payment or issuance of common stock as a dividend or distribution
on our
common stock;
|
| (2) |
the
issuance
to all holders of common stock of rights, warrants or options to
purchase
our common stock (other than pursuant to our preferred share rights
plan)
for a period expiring within 45 days of the record date for such
distribution at a price less than the average of the closing sale
price
for the 10 trading days preceding the declaration date for such
distribution; provided that the conversion price will be readjusted
to the
extent that such rights, warrants or options are not
exercised;
|
| (3) |
subdivisions,
splits or combinations of our common stock;
and
|
| (4) |
distributions
to
the holders of our common stock of a portion of our assets (including
shares of capital stock or assets of a subsidiary) or debt or other
securities issued by us or certain rights to purchase our securities
(excluding dividends or distributions covered by clauses (1) or
(2) above
or our preferred share rights plan); provided, however, that if
we
distribute capital stock of, or similar equity interests in, a
subsidiary
or other business unit of ours, the conversion rate will be adjusted
based
on the market value of the securities so distributed relative to
the
market value of our common stock, in each case based on the average
closing sale prices of those securities for the 10 trading days
commencing
on and including the fifth trading day after the date on which
“ex-dividend trading” commences for such distribution on the NASDAQ
National Market or such other national or regional exchange or
market on
which the securities are then listed or
quoted.
|
| · |
any
reclassification of our common
stock;
|
| · |
a
consolidation, merger or combination involving us;
or
|
| · |
a
sale or conveyance to another person or entity of all or substantially
all
of our property and assets in which holders of our common stock would
be
entitled to receive stock, other securities, other property, assets
or
cash for their common stock, upon conversion of a holder’s debentures the
holder will be entitled to receive the same type of consideration
that the
holder would have been entitled to receive if the holder had converted
the
debentures into our common stock immediately prior to any of these
events.
|
| (i) |
securities
that are traded on a U.S. national securities exchange or approved
for
quotation on the NASDAQ National Market or any similar system of
automated
dissemination of quotations of securities prices will be based on
100% of
the arithmetic average of the Closing Price of such securities during
each
of the ten (10) Trading Days ending on the Trading Day immediately
preceding the Effective Date;
|
| (ii) |
other
securities, assets or property (other than cash) will be valued on
100% of
the arithmetic average of the fair market value of such securities,
assets
or property (other than cash) as determined by two independent nationally
recognized investment banks selected by the Trustee;
and
|
| (iii) |
100%
of any cash.
|
|
Stock
Price
|
LSB
Industries
Make-Whole
Premium in Additional Shares of Common Stock
|
||||||
|
$7.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
0.00
|
|
$7.50
|
20.53
|
17.97
|
15.16
|
11.86
|
0.00
|
0.00
|
0.00
|
|
$8.00
|
22.66
|
20.15
|
17.40
|
14.15
|
10.16
|
3.62
|
0.00
|
|
$8.50
|
19.87
|
17.44
|
14.77
|
11.62
|
7.77
|
1.68
|
0.00
|
|
$9.00
|
17.54
|
15.20
|
12.63
|
9.62
|
5.99
|
0.76
|
0.00
|
|
$10.00
|
13.94
|
11.80
|
9.46
|
6.79
|
3.70
|
0.26
|
0.00
|
|
$15.00
|
6.06
|
4.79
|
3.52
|
2.23
|
1.08
|
0.14
|
0.00
|
|
$20.00
|
3.75
|
2.95
|
2.18
|
1.44
|
0.77
|
0.11
|
0.00
|
|
$25.00
|
2.76
|
2.20
|
1.66
|
1.13
|
0.61
|
0.09
|
0.00
|
|
$30.00
or Above
|
2.23
|
1.79
|
1.36
|
0.93
|
0.51
|
0.07
|
0.00
|
|
Effective
Date
|
3/1/2006
to
8/31/2006(1)
|
9/1/2006
to
2/28/2007(1)
|
3/1/2007
to
8/31/2007
|
9/1/2007
to
2/29/2008
|
3/1/2008
to
8/31/2008
|
9/1/2008
to
2/28/2009
|
After
3/1/2009
|
| (1) |
if
the stock price is between two stock price amounts in the table
on the
effective date and the effective date is between two dates in the
table,
the additional shares will be determined by straight-line interpolation
between the number of additional shares set forth for the higher
and lower
stock price amounts and the two dates, as applicable, based on
a 365-day
year (or 366-day year, if a leap
year);
|
| (2) |
if
the stock price is equal to or in excess of $30.00 per share of our
common
stock (subject to adjustment), the make-whole premium will be the
shares
in the table in the stock price row “$30.00 or above”;
and
|
| (3) |
if
the stock price is equal to or less than $7.00 per share of our common
stock (subject to adjustment), no additional make-whole premium will
be
issued upon conversion.
|
| · |
the
events constituting a designated event or fundamental
change;
|
| · |
the
date of the designated event or fundamental
change;
|
| · |
the
last date on which a holder may exercise the purchase right, which
may not
be less than 45 days after the date of mailing of our notice of the
designated event;
|
| · |
the
purchase price and date or repurchase, if
applicable;
|
| · |
the
name and address of the paying agent and the conversion
agent;
|
| · |
the
conversion rate and any adjustments to the conversion
rate;
|
| · |
that
the debentures with respect to which a purchase notice has been given
by
the holder may be converted only if the holder withdraws the purchase
notice in accordance with the terms of the
indenture;
|
| · |
the
procedures that holders must follow to require us to purchase their
debentures and to withdraw any surrendered debentures, if
applicable;
|
| · |
the
CUSIP number or numbers of the debentures (if then generally in
use);
|
| · |
in
the case of a fundamental change, the amount and availability of
the
make-whole premium of the debentures converted in connection with
a
fundamental change; and
|
| · |
in
the case of a fundamental change, whether such make-whole premium
will be
paid in shares of common stock or the property into which the common
stock
was converted in such fundamental change transaction or a combination
of
both.
|
| · |
if
certificated debentures have been issued, the debenture certificate
numbers (or, if the holder’s debentures are not certificated, the holder’s
repurchase notice must comply with appropriate DTC
procedures);
|
| · |
the
portion of the principal amount of debentures to be repurchased,
which
must be in $1,000 multiples; and
|
| · |
that
the debentures are to be repurchased by us pursuant to the applicable
provisions of the debentures and the
indenture.
|
| · |
the
principal amount of the withdrawn
debentures;
|
| · |
if
certificated debentures have been issued, the certificate numbers
of the
withdrawn debentures (or, if the holder’s debentures are not certificated,
the holder’s withdrawal notice must comply with appropriate DTC
procedures); and
|
| · |
the
principal amount, if any, which remains subject to the repurchase
notice.
|
| · |
the
debenture will cease to be
outstanding;
|
| · |
interest
will cease to accrue; and
|
| · |
all
other rights of the holder will terminate, other than the right to
receive
the repurchase price upon delivery of the
debenture.
|
| (1) |
a
“person” or “group” within the meaning of Section 13(d) of the Exchange
Act (other than us, our subsidiaries, our employee benefit plans,
or any
of the Golsen Group), files a Schedule TO or any schedule, form or
report
under the Exchange Act disclosing that such person or group has become
the
direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the
Exchange Act, of our common stock representing more than 50% of the
voting
power of our common stock entitled to vote generally in
|
|
the
election of directors; provided, however, that the Golsen Group,
as a
whole, is only excluded if their beneficial ownership of our voting
common
stock is 70% or less.
|
| (2) |
consummation
of any share exchange, consolidation or merger of us pursuant to
which our
common stock is converted into cash, securities or other property,
or any
sale, lease or other transfer in one transaction or a series of
transactions of all or substantially all of the consolidated assets
of us
and our subsidiaries, taken as a whole, to any person other than
us or one
or more of our subsidiaries; provided, however, that a transaction
where
the holders of our common stock immediately prior to such transaction
have, directly or indirectly, more than 50% of the aggregate voting
power
of the common stock of the continuing or surviving corporation or
transferee entitled to vote generally in the election of directors
immediately after such event shall not be a fundamental change;
or
|
| (3) |
continuing
directors (as defined below in this section) cease to constitute
at least
a majority of our board of
directors.
|
| (1) |
the
last reported sale price of our common stock for any five trading
days
within the 10 consecutive trading days ending immediately before
the later
of the fundamental change or the public announcement thereof, equals
or
exceeds 105% of the applicable conversion price of the debentures
in
effect immediately before the fundamental change or the public
announcement thereof; or
|
| (2) |
at
least 90% of the consideration, excluding cash payments for fractional
shares, in the transaction or transactions constituting the fundamental
change consists of shares of capital stock traded on a national securities
exchange or quoted on the NASDAQ National Market or which will be
so
traded or quoted when issued or exchanged in connection with a fundamental
change (these securities being referred to as “publicly traded
securities”) and as a result of this transaction or transactions the
debentures become convertible into such publicly traded securities,
excluding cash payments for fractional
shares.
|
| · |
a
default in the payment of designated senior indebtedness occurs and
is
continuing beyond any applicable period of grace (called a “payment
default”); or
|
| · |
a
default, other than a payment default, on any designated senior
indebtedness occurs and is continuing (or such default would occur
as a
result of such payment, provided, in this last case that we have
notified
the trustee that such default would result from such payment prior
to the
time the trustee is required to make such payment) that permits holders
of
designated senior indebtedness to accelerate its maturity, or in
the case
of a lease, a default occurs and is continuing that permits the lessor
to
either terminate the lease or require us to make an irrevocable offer
to
terminate the lease following an event of default under the lease,
and the
trustee receives a notice of such default (called “payment blockage
notice”) from any person permitted to give such notice under the indenture
(called a “non-payment default”).
|
| · |
in
case of a default in the payment of designated senior indebtedness,
upon
the date on which such default is cured or waived or ceases to exist;
or
|
| · |
in
case of a default, other than a payment default, on any designated
senior
indebtedness, the earlier of the date on which such nonpayment default
is
cured or waived or ceases to exist or 179 days after the date on
which the
payment blockage notice is received, if the maturity of the designated
senior indebtedness has not been accelerated, or in the case of any
lease,
179 days after notice is received if we have not received notice
that the
lessor under such lease has exercised its right to terminate the
lease or
require us to make an irrevocable offer to terminate the lease following
an event of default under the
lease.
|
| · |
any
indebtedness that by its express terms provides that it is not senior
to
the debentures or is pari passu or junior to the debentures;
or
|
| · |
any
indebtedness we owe to any of our majority-owned subsidiaries;
or
|
| · |
the
debentures.
|
| · |
we
are the surviving person, or the resulting, surviving or transferee
person, if other than us, is organized and existing under the laws
of the
United States, any state thereof or the District of
Columbia;
|
| · |
the
successor person assumes, by supplemental indenture satisfactory
in form
and substance to the trustee, all of our obligations under the debentures
and the indenture;
|
| · |
after
giving effect to such transaction, there is no event of default,
and no
event which, after notice or passage of time or both, would become
an
event of default; and
|
| · |
we
have delivered to the trustee an officers’ certificate and an opinion of
counsel each stating that such consolidation, merger, sale, conveyance,
transfer or lease complies with these
requirements.
|
| · |
failure
to pay principal or premium, if any, when due at maturity, upon
redemption, repurchase or otherwise on the debentures, whether or
not the
payment is prohibited by subordination provisions of the
indenture;
|
| · |
failure
to pay any interest, if any, on the debentures, when due and such
failure
continues for a period of 10 days, whether or not the payment is
prohibited by subordination provisions of the
indenture;
|
| · |
default
in our obligation to deliver shares of our common stock or other
property
upon conversion of the debentures;
|
| · |
failure
to provide notice of the occurrence of a designated event on a timely
basis;
|
| · |
failure
by us to pay any indebtedness for money borrowed or other senior
indebtedness (after giving effect to any applicable grace periods)
in an
outstanding principal amount in excess of $5,000,000 at interim or
final
maturity or upon acceleration, which indebtedness is not discharged,
or
such default in payment or acceleration is not cured or rescinded,
within
10 days after written notice as provided in the
indenture;
|
| · |
failure
to perform or observe any of the covenants in the indenture for 30
days
after written notice to us from the trustee (or to us and the trustee
from
(a) two or more holders holding at least 25% or (b) one holder holding
at
least 35%, in the aggregate principal amount of the debentures at
the time
outstanding); or
|
| · |
certain
events involving our bankruptcy, insolvency or
reorganization.
|
| · |
(a)
two or more holders holding at least 25% or (b) one holder holding
at
least 35%, in the aggregate principal amount of the debentures at
the time
outstanding has given the trustee written notice of an event of
default;
|
| · |
(a)
two or more holders holding at least 25% or (b) one holder holding
at
least 35%, in the aggregate principal amount of the debentures at
the time
outstanding make a written request, and offer reasonable indemnity,
to the
trustee to pursue the remedy;
|
| · |
the
trustee does not receive an inconsistent direction from the holders
of a
majority in principal amount of the
debentures;
|
| · |
the
holder or holders have offered reasonable security or indemnity to
the
trustee against any costs, liability or expense of the trustee;
and
|
| · |
the
trustee fails to comply with the request within 60 days after receipt
of
the request and offer of indemnity.
|
| · |
extend
the fixed maturity of any
debenture;
|
| · |
reduce
the rate or extend the time for payment of interest, if any, of any
debenture;
|
| · |
reduce
the principal amount or premium of any
debenture;
|
| · |
reduce
any amount payable upon redemption or repurchase of any
debenture;
|
| · |
adversely
change our obligation to repurchase any debenture at the option of
the
holder;
|
| · |
adversely
change our obligation to repurchase any debenture upon a designated
event;
|
| · |
impair
the right of a holder to institute suit for payment on any
debenture;
|
| · |
change
the currency in which any debenture is
payable;
|
| · |
impair
the right of a holder to convert any debenture or reduce the number
of
shares of common stock or any other property receivable upon
conversion;
|
| · |
adversely
modify, in any material respect, the subordination provisions of
the
indenture;
|
| · |
reduce
the quorum or voting requirements under the indenture;
or
|
| · |
subject
to specified exceptions, modify certain of the provisions of the
indenture
relating to modification or waiver of provisions of the
indenture.
|
| · |
in
fully registered form;
|
| · |
without
interest coupons; and
|
| · |
in
denominations of $1,000 principal amount and multiples of
$1,000.
|
| · |
not
be entitled to have certificates registered in their
names;
|
| · |
not
receive physical delivery of certificates in definitive registered
form;
and
|
| · |
not
be considered holders of the global
debenture.
|
| · |
for
the records relating to, or payments made on account of, beneficial
ownership interests in a global debenture;
or
|
| · |
for
maintaining, supervising or reviewing any records relating to the
beneficial ownership interests.
|
| · |
a
limited purpose trust company organized under the laws of the State
of New
York and a member of the Federal Reserve
System;
|
| · |
“clearing
corporation” within the meaning of the Uniform Commercial Code;
and
|
| · |
a
“clearing agency” registered pursuant to the provisions of Section 17A of
the Exchange Act.
|
| · |
DTC
notifies us that it is unwilling or unable to continue as depositary
or
DTC ceases to be a clearing agency registered under the Securities
and
Exchange Act of 1934, as amended, and a successor depositary is not
appointed by us within 90 days;
|
| · |
an
event of default shall have occurred and the maturity of the debentures
shall have been accelerated in accordance with the terms of the debentures
and any holder shall have requested in writing the issuance of definitive
certificated debentures; or
|
| · |
we
have determined in our sole discretion that debentures shall no longer
be
represented by global debentures.
|
| · |
be
named as a Selling Security Holder in the
prospectus;
|
| · |
deliver
a prospectus to purchasers; and
|
| · |
be
subject to the provisions of the registration rights agreement, including
indemnification provisions.
|
| · |
are
entitled to receive dividends, when and as declared by the board
of
directors, from legally available
funds;
|
| · |
are
entitled, upon our liquidation, dissolution or winding up, to a pro
rata
distribution of the assets and funds available for distribution to
stockholders;
|
| · |
are
entitled to one vote per share on all matters on which stockholders
generally are entitled to vote; and
|
| · |
do
not have preemptive rights to subscribe for additional shares of
common
stock or securities convertible into shares of common
stock.
|
| · |
4,662
shares of our convertible, noncumulative preferred stock, $100 par
value
(“Noncumulative Preferred”), of which 611.5 shares are issued and
outstanding;
|
| · |
20,000
shares of our Series B 12% cumulative, convertible preferred stock,
$100
par value (“Series B Preferred”), of which 20,000 shares are issued and
outstanding;
|
| · |
920,000
shares of our Series 2 $3.25 convertible, exchangeable Class C preferred
stock, no par value (“Series 2 Class C Preferred”) (excluding 18,300
shares held in treasury) of which 193,295
shares
are issued and outstanding; and
|
| · |
1,000,000
shares of our Series D 6% cumulative, convertible Class C preferred
stock
no par value (“Series D Class C Preferred”), of which 1,000,000 shares are
issued and outstanding.
|
| · |
is
entitled to receive noncumulative cash dividends, when and as declared
by
our board of directors, at the rate of 10% per year of the par
value;
|
| · |
is
entitled to one vote for each outstanding share (or one-half of one
vote
for each fractional one-half share) on all matters submitted to a
vote of
the shareholders and votes together with the common stock and each
series
of voting preferred stock as a single class or as otherwise required
by
law;
|
| · |
is
convertible, at anytime and at the option of the holder, into 40
shares of
our common stock (or each fractional one-half share is convertible
into 20
shares of our common stock), subject to adjustment under certain
conditions;
|
| · |
is
redeemable by us at par value (or each fractional one-half share
at
one-half of the par value) at the option of the holder to the extent
we
earn net income (as determined under GAAP) after all debt owed by
us to
our senior lenders (as defined) has been paid in
full;
|
| · |
is
redeemable by us, in whole or in part, by paying the holders in cash
the
par value (one-half of par value for a fractional share);
and
|
| · |
in
the event of our liquidation or dissolution, will be entitled to
be paid
the par value (for each fractional share, one-half of par value)
to the
extent funds are available before any payment is made to the holders
of
our common stock, but will not be entitled to participate any further
in
our assets.
|
| · |
is
entitled to receive cumulative cash dividends, when and as declared
by our
board of directors, at the annual rate of 12% of the par value of
each
outstanding share;
|
| · |
is
entitled to one vote for each outstanding share on all matters submitted
to a vote of shareholders and votes together with our common stock
and
each series of voting preferred stock as a single class or as otherwise
required by law;
|
| · |
is
convertible, at any time and at the option of the holder, into 33.3333
shares of our common stock, subject to adjustment under certain
conditions; and
|
| · |
in
the event of our liquidation each outstanding share, will be entitled
to
be paid its par value, plus accrued and unpaid dividends, before
any
payment is made to holders of our common stock, but will not be entitled
to participate any further in our
assets.
|
| · |
has
a stated value of $50 per share;
|
| · |
is
entitled to receive cumulative cash dividends, when and as declared
by our
board of directors, at the rate of $3.25 per
annum;
|
| · |
does
not have any voting rights, except as otherwise required by law or
if
dividends are in arrears and unpaid, whether or not declared, in
an amount
equal to at least six quarterly dividends elect (voting separately
as
class with all other affected classes or series of parity stock upon
which
like voting rights have been conferred) two additional directors
to our
board of directors, if and as long as at least 140,000 shares of
the
Series 2 Class C Preferred remain
outstanding;
|
| · |
is
convertible into that number of shares of our common stock, obtained
by
dividing the stated value by the conversion price then in effect,
with the
initial conversion price set at $11.55 per share, subject to adjustment
under certain conditions;
|
| · |
is
subject to special conversion rights upon a change in control or
ownership
change (as such terms are defined in the terms of the Series 2 Class
C
Preferred);
|
| · |
in
the event of our liquidation, dissolution or winding up, is entitled
to be
paid its stated value plus accrued and unpaid dividends, before any
payment shall be made on our common
stock;
|
| · |
in
addition, the terms of the Series 2 Perferred permit us to purchase
or
otherwise acquire shares of our common stock for a five year period,
commencing March 13, 2007, even though cumulative accrued and unpaid
dividends exist on the Series 2
Preferred;
|
| · |
is
redeemable by us at its stated value plus all accrued and unpaid
dividends; and
|
| · |
is
exchangeable at our option in whole, but not in part, for our 6.50%
convertible subordinated
debentures.
|
| · |
has
a liquidation preference of $1.00 per
share;
|
| · |
is
to receive cumulative cash dividends, when and if declared by our
board of
directors, at the rate of 6% per annum of the liquidation preferences,
except if the dividends on the Series 2 Class C Preferred are in
default,
in whole or in part, no dividends shall be paid on this stock until
all
accrued and unpaid dividends on the Series 2 Class C Preferred have
been
paid;
|
| · |
shall
be entitled to .875 votes on all matters submitted to a vote of
shareholders and vote together with our common stock and each series
of
voting preferred stock as a single class or as otherwise required
by
law;
|
| · |
shall
have the right to convert four shares of Series D Class C Preferred
into
one share of our common stock (equivalent to a conversion price of
$4 per
share of our common stock), subject to adjustment under certain
conditions;
|
| · |
in
the event of our liquidation, dissolution or winding up or any reduction
in our capital resulting from any distribution of assets to our
shareholders, shall receive the sum $1.00, plus all accrued and unpaid
dividends, before any amount is paid to holders of our common stock;
and
|
| · |
there
shall be no mandatory or optional redemption of these
shares.
|
| · |
cash
or cashier’s certified check; or
|
| · |
holder
surrendering to us that number of shares of common stock issuable
upon
exercise of the Lender Warrant having an aggregate market value equal
to
the aggregate exercise price; or
|
| · |
a
combination thereof.
|
| · |
1993
Stock Option and Incentive Plan (the “1993 Plan”) and 1998 Stock Option
Plan (the “1998 Plan”). As of March 29, 2007, 38,000 shares are issuable
under outstanding options granted under the 1993 Plan, and no additional
shares are available for future issuance. As of March 29, 2007,
468,304
shares are issuable under outstanding options granted under the 1998
Plan,
and 8,000
additional shares are available for future issuance. The 1993 Plan
and
1998 Plan each authorize us to grant options to purchase common stock
to
our employees. All outstanding options granted to employees under
these
plans have a term of ten years and become exercisable as to 20% of
the
underlying shares after one year from date of grant, 40% after two
years,
70% after three years, and 100% after four years. However, our board
of
directors accelerated the vesting of all options outstanding as of
December 31, 2005, and outstanding options under the 1993 Plan and
1998
Plan are fully exercisable. The exercise price of outstanding options
granted under these plans is equal to the market value of our common
stock
at the date of grant. However, with respect to participants who own
10% or
more of our common stock at the date of grant, the options have a
term of
five years, and the exercise price is 110% of the market value at
the date
of grant.
|
| · |
Outside
Directors Stock Option Plan (the “Outside Directors Plan”). As of March
29, 2007, 90,000 shares are issuable under outstanding options granted
under the Outside Directors Plan and 295,000 additional shares are
available for future issuance. The Outside Directors Plan authorizes
us to
grant options to purchase common stock to each member of our board
of
directors who is not an officer or employee of ours or our subsidiaries.
These options become fully exercisable after six months and one day
from
the date of grant and lapse at the end of ten years. The exercise
price of
options granted under the Outside Directors Plan is equal to the
market
value of our common stock at the date of grant.
|
|
Name
of Selling
Security Holder |
Amount
of Debentures Beneficially
Owned ($) |
Percentage
of Debentures
Beneficially Owned |
Amount
of Debentures
Offered |
Shares
of
Common Stock Beneficially Owned |
Shares of
Common Stock
Offered |
Shares
of
Common Stock
Owned
After
Offering |
|
Alexandra
Global
Master Fund Ltd.(2) |
*
|
0%
|
*
|
279,539
|
279,539
|
0
|
|
Bancroft
Fund Ltd.(3)
|
*
|
0%
|
*
|
150,000
|
150,000
|
0
|
|
Context
Advantage
Master Fund, L.P.(4) |
*
|
0%
|
*
|
305,625
|
305,625
|
0
|
|
Ellsworth
Fund Ltd.(3)
|
*
|
0%
|
*
|
150,000
|
150,000
|
0
|
|
Highbridge
International, LLC(5) |
*
|
0%
|
*
|
706,250
|
706,250
|
0
|
|
Jayhawk
Institutional
Partners, L.P. (Kent C. McCarthy)(6) |
$
1,000,000
|
100%
|
$
1,000,000
|
3,444,617(1)
(6)
|
141,040
|
3,303,577(6)
|
|
Technology
Yield Fund(7)
|
*
|
0%
|
*
|
35,313
|
35,313
|
0
|
| * | The Debentures originally purchased by the Selling Security Holder were converted into shares of common stock prior to the date of this prospectus at the conversion rate of 141.25 shares of common stock per $1,000 principal amount of debentures, representing a conversion price of $7.08 per share, and the Selling Security Holder no longer owns any Debentures. |
| (1) |
Assumes
conversion of the debentures at a conversion rate of 141.04 shares
per
$1,000 principal amount of debentures, representing a conversion
price of
approximately $7.09 per share. The actual conversion rate will vary
from
141.04 to 125 per $1,000 principal amount of debentures, based on
the date
on which conversion occurs. See “Description of debentures—Conversion of
debentures.”
|
| (2) |
Alexandra
Investment Management, LLC, a Delaware limited liability company
(“Alexandra”), as the investment adviser to Alexandra Global Master Fund
Ltd., a British Virgin Islands company (“Master Fund”), may be deemed to
share dispositive power over the debentures and shares of common
stock
stated as
|
|
beneficially
owned by Master Fund and to share voting power over such shares of
common
stock. Alexandra disclaims beneficial ownership of such debentures
and
shares of common stock. Messrs. Mikhail A. Filimonov (“Filimonov”) and
Dimitri Sogoloff (“Sogoloff”), as the managing members of Alexandra, may
be deemed to share dispositive power over the debentures and shares
of
common stock beneficially owned by Master Fund and to share voting
power
over such shares of common stock. Filimonov and Sogoloff disclaim
beneficial ownership of such debentures and shares of common stock.
This
amount does not include 144,211 shares of common stock sold previously
pursuant to our prospectus, dated May 26, 2006. The address of Master
Fund
is 767 Third Avenue, 39th
Floor, New York, NY 10017.
|
| (3) |
Thomas
H. Dinsmore has sole voting and dispositive power over the securities
held
by Bancroft Convertible Fund (“Bancroft”) and Ellsworth Fund Ltd.
(“Ellsworth”). The amount shown does not include 54,812 shares of common
stock sold previously by Bancroft and 54,812 shares of common stock
sold
previously by Ellsworth pursuant to our prospectus, dated May 26,
2006.
The address of Bancroft and Ellsworth is 65 Madison Avenue, Morristown,
New Jersey 07960.
|
| (4) |
Context
Capital Management LLC, as investment advisor, has sole voting and
dispositive power over the securities held by Context Advantage Fund
Master, L.P. (“Context Master”). The amount shown does not include 400,625
shares of common stock sold previously by Context Master’s affiliates,
Context Advantage Fund, Ltd. and Context Advantage Fund Offshore,
Ltd.,
pursuant to our prospectus, dated May 26, 2006. The address of Context
Master is 12626 High Bluff Drive, Suite 440, San Diego, California
92130.
|
| (5) |
Highbridge
Capital Management, LLC (“Highbridge”), is the trading manager of
Highbridge International LLC (“HIC”), and consequently has voting control
and investment discretion over securities held by HIC. Glenn Dubin
and
Henry Swieca control Highbridge. Each of Highbridge, Glenn Dubin
and Henry
Swieca disclaims beneficial ownership of the securities held by HIC.
The
address of HIC is 9 West 57th
Street, New York, NY 10019.
|
| (6) |
Jayhawk
Institutional Partners, L.P. (“Jayhawk Institutional”), Kent C. McCarthy,
Jayhawk Capital Management Company, LLC (“Jayhawk Capital”), and Jayhawk
Investments, L.P. (“Jayhawk Investments”) (collectively, the “Jayhawk
Group”) as a group beneficially own 3,444,617 shares of our common stock,
which includes 671,047 shares of common stock receivable upon conversion
of 155,012 shares of Series 2 Preferred, 112,500 shares of common
stock
that may be acquired upon exercise of warrants, and 141,040 shares
of
common stock that may be acquired upon conversion of $1 million principal
amount of the debentures. See “Recent Development” for a discussion of the
Jayhawk Group’ intent to convert such debentures. The common stock
beneficially owned by the Jayhawk Group includes (a) 2,327,788 shares
of
common stock that Jayhawk Institutional owns or has the right to
acquire,
including (i) 349,220 shares of common stock receivable upon the
conversion of 80,670 shares of Series 2 Preferred, (ii) 112,500 shares
of
common stock receivable upon the exercise of warrants, and (iii)
141,040
shares of common stock receivable upon the conversion of $1 million
principal amount of the debentures (See “Recent Development”), (b) 892,589
shares of common stock that Jayhawk Investments owns or has the right
to
acquire, including 321,827 shares of common stock receivable by Jayhawk
Investments upon conversion of 74,342 shares of Series 2 Preferred,
and
(c) 224,240 shares Mr. McCarthy holds through a revocable trust.
The
3,444,617 shares of common stock owned represents 16.9% of our issued
and
outstanding common stock, based on 19,483,139 shares outstanding
on March
29, 2007 (excluding 3,447,754 shares held in treasury), calculated
pursuant to Rule 13d-3 of the Securities Act of 1934, as amended.
Jayhawk
Capital, as the investment advisor and manager of Jayhawk Institutional
and the investment advisor and general partner of Jayhawk Investments,
is
deemed to beneficially own the securities held by Jayhawk Institutional
and Jayhawk Investments. Mr. McCarthy, as the manager and sole member
of
Jayhawk Capital, has sole voting and dispositive power over our securities
held by Jayhawk Capital, Jayhawk Institutional and Jayhawk Investments.
Mr. McCarthy disclaims beneficial ownership of all such shares and
debentures other than his personal holdings. Mr. McCarthy’s address is
5410
West 61st
Place, Suite 100, Mission, Kansas 66205.
|
| (7) |
James
A. Bitzer, Michael I. Mahoney, and William E. Grayson, as the general
partners of EGM Capital, LLC, the general partner of Technology Yield
Fund
(“Technology”), have shared voting and dispositive power over the
securities held by Technology Yield Fund. The amount shown does not
include 105,937 shares of common stock sold previously pursuant to
our
prospectus, dated May 26, 2006. The address of Technology Yield Fund
is 2
Embarcadero Centre, Suite 1300, San Francisco, California
94111.
|
|
•
|
on
any national securities exchange or quotation service on which the
debentures or the common stock issuable upon conversion of the debentures
are listed or quoted at the time of sale;
|
|
•
|
in
the over-the-counter market;
|
|
•
|
in
ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
|
|
•
|
in
purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
|
|
•
|
in
an exchange distribution in accordance with the rules of the applicable
exchange;
|
|
•
|
through
the writing of options (including the issuance by the Selling Security
Holders of derivative securities);
|
|
•
|
through
the settlement of short sales;
|
|
•
|
pursuant
to Rule 144;
|
|
•
|
in
a combination of any such methods of sale; or
|
|
•
|
in
any other method permitted pursuant to applicable law.
|
|
•
|
enter
into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the securities
in
the course of hedging positions they assume;
|
|
•
|
sell
the securities short;
|
|
•
|
loan
or pledge the securities to broker-dealers or other financial institutions
that in turn may sell the securities;
|
|
•
|
enter
into option or other transactions with broker-dealers or other financial
institutions that require the delivery by the Selling Security Holders
of
debentures or the common stock issuable upon conversion of the debentures,
which the broker-dealer or other financial institution may resell
pursuant
to this prospectus; or
|
|
•
|
enter
into transactions in which a broker-dealer makes purchases as a principal
for resale for its own account or through other types of
transactions.
|
| · |
the
number of members of the Board of Directors of the Company shall
be
increased by two effective as of the time of election of such directors;
|
| · |
the
Company shall, upon the written request of the record holder of 10%
of the
shares of Series 2 Preferred, call a special meeting of the Series
2
Preferred holders for the purpose of electing such two additional
directors; and
|
| · |
the
Series 2 Preferred holders have the exclusive right to vote for and
elect
such two additional directors.
|
| · |
establish
the base salary, incentive compensation and any other compensation
for the
Company’s executive officers;
|
| · |
administer
the Company’s management incentive and stock-based compensation plans,
non-qualified death benefits, salary continuation and welfare plans,
and
discharge the duties imposed on the Committee by the terms of those
plans;
and
|
| · |
perform
other functions or duties deemed appropriate by the
Board.
|
| · |
Compensation
should be based on the level of job responsibility, executive performance,
and Company performance.
|
| · |
Compensation
should enable the Company to attract and retain key
talent.
|
| · |
Compensation
should be competitive with compensation offered by other companies
that
compete with us for talented
individuals.
|
| · |
Compensation
should reward performance.
|
| · |
Compensation
should motivate executives to achieve the Company’s strategic and
operational goals.
|
| · |
base
salary;
|
| · |
cash
bonus;
|
| · |
salary
continuation and death benefit programs;
and
|
| · |
perquisites
and other personal benefits.
|
| · |
enabling
the Company to retain its named executive
officers;
|
| · |
encouraging
our named executive officers to render outstanding service; and
|
| · |
maintaining
competitive levels of total compensation.
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan Compensation
($)
|
Change
in
Pension
Value
and Nonqualified Deferred Compensation Earnings
($)
|
All
Other Compensation
($)
(1)
|
Total
($)
|
|
Jack
E. Golsen,
Chairman
of the Board
of
Directors and
Chief
Executive Officer
|
2006
|
497,400
|
-
|
-
|
-
|
-
|
-
|
615,168
|
1,112,568
|
|
Tony
M. Shelby,
Executive
Vice President
of
Finance and Chief Financial Officer
|
2006
|
245,000
|
40,000
|
-
|
-
|
-
|
-
|
22,428
|
307,428
|
|
Barry
H. Golsen,
Vice
Chairman of the Board of Directors, President, and President of the
Climate Control Business
|
2006
|
413,600
|
40,000
|
-
|
-
|
-
|
-
|
9,515
|
463,115
|
|
David
R. Goss,
Executive
Vice President
of
Operations
|
2006
|
233,000
|
35,000
|
-
|
-
|
-
|
-
|
14,146
|
282,146
|
|
David
M. Shear,
Senior
Vice President and General Counsel
|
2006
|
225,000
|
35,000
|
-
|
-
|
-
|
-
|
4,628
|
264,628
|
| · |
the
expense incurred associated with our accrued death benefit liability
or
|
| · |
the
prorata portion of life insurance premium expense to fund the undiscounted
death benefit.
|
| · |
the
expense incurred associated with our accrued benefit liability
or
|
| · |
the
prorata portion of life insurance premium expense to fund the undiscounted
death benefit.
|
|
1981
Agreements
|
1992
Agreements
|
2005
Agreements
|
Automobiles
|
Country
Club
Dues
|
Cell
Phones
|
Total
|
|
|
Jack
E. Golsen
|
$185,584
|
$-
|
$422,645
|
$4,875
|
$1,618
|
$446
|
$615,168
|
|
Tony
M. Shelby
|
$6,416
|
$9,825
|
$-
|
$3,175
|
$2,667
|
$345
|
$22,428
|
|
Barry
H. Golsen
|
$477
|
$3,951
|
$-
|
$4,375
|
$-
|
$712
|
$9,515
|
|
David
R. Goss
|
$868
|
$9,953
|
$-
|
$2,925
|
$-
|
$400
|
$14,146
|
|
David
M. Shear
|
$-
|
$1,146
|
$-
|
$2,925
|
$-
|
$557
|
$4,628
|
| · |
be
paid an annual base salary at his 1995 base rate, as adjusted from
time to
time by the Compensation and Stock Option Committee, but such shall
never
be adjusted to an amount less than Mr. Golsen’s 1995 base salary,
|
| · |
be
paid an annual bonus in an amount as determined by the Compensation
and
Stock Option Committee, and
|
| · |
receive
from the Company certain other fringe benefits (vacation; health
and
disability insurance).
|
| · |
upon
conviction of a felony involving moral turpitude after all appeals
have
been exhausted (“Conviction”),
|
| · |
Mr.
Golsen’s serious, willful, gross misconduct or willful, gross negligence
of duties resulting in material damage to the Company and its
subsidiaries, taken as a whole, unless Mr. Golsen believed, in good
faith,
that such action or failure to act was in the Company’s or its
subsidiaries’ best interest (“Misconduct”), and
|
| · |
Mr.
Golsen’s death.
|
| · |
a
cash payment, on the date of termination, a sum equal to the amount
of Mr.
Golsen’s annual base salary at the time of such termination and the amount
of the last bonus paid to Mr. Golsen prior to such termination times
the
number of years remaining under the then current term of the employment
agreement, and
|
| · |
provide
to Mr. Golsen all of the fringe benefits that the Company was obligated
to
provide during his employment under the employment agreement for
the
remainder of the term of the employment agreement.
|
|
Name
of Individual
|
Amount
of Annual
Payment
|
|
Jack
E. Golsen
|
$
|
175,000
|
||
|
Tony
M. Shelby
|
$
|
35,000
|
||
|
Barry
H. Golsen
|
$
|
30,000
|
||
|
David
R. Goss
|
$
|
35,000
|
|
|
Name
of Individual
|
Amount
of
Annual
Benefit
|
Amount
of
Annual
Death
Benefit
|
Amount
of
Net
Cash
Surrender
Value
|
|
Jack
E. Golsen
|
N/A
|
N/A
|
N/A
|
|||||||
|
Tony
M. Shelby
|
$
|
15,605
|
N/A
|
$
|
43,119
|
|||||
|
Barry
H. Golsen
|
$
|
17,480
|
$
|
11,596
|
$
|
18,201
|
||||
|
David
R. Goss
|
$
|
17,403
|
N/A
|
$
|
43,713
|
|||||
|
David
M. Shear
|
$
|
17,822
|
$
|
7,957
|
$
|
8,023
|
|
Options
Awards
|
Stock
Awards
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
|
Name
|
Number
of Securities Underlying Unexercised Options
(#)
Exercisable(1)
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
(#)
|
Option
Exercise Price
($)
|
Option
Expiration Date(1)
|
Number
of Shares or Units of Stock That Have Not Vested
(#)
|
Market
Value of Shares or Units of Stock That HaveNot Vested
($)
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other
Rights
That Have Not Vested
(#)
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares,
Units or
Other Rights That Have Not Vested
($)
|
|
Jack
E. Golsen
|
176,500
|
-
|
-
|
1.25
|
7/8/2009
|
-
|
-
|
-
|
-
|
|
Tony
M. Shelby
|
100,000
15,000
|
-
-
|
-
-
|
1.25
2.73
|
7/8/2009
11/29/2011
|
-
-
|
-
-
|
-
-
|
-
-
|
|
Barry
H. Golsen
|
55,000
11,250
|
-
-
|
-
-
|
1.25
2.73
|
7/8/2009
11/29/2011
|
-
-
|
-
-
|
-
-
|
-
-
|
|
David
R. Goss
|
100,000
15,000
|
-
-
|
-
-
|
1.25
2.73
|
7/8/2009
11/26/2011
|
-
-
|
-
-
|
-
-
|
-
-
|
|
David
M. Shear
|
85,544
15,000
|
-
-
|
-
-
|
1.25
2.73
|
7/8/2009
11/29/2011
|
-
-
|
-
-
|
-
-
|
-
-
|
|
Option
Exercises and Stock Vested in 2006
|
||||||||
|
Option
Awards
|
Stock
Awards
|
|||||||
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
||||
|
Name
|
Number
of
Shares
Acquired
on
Exercise
(#)
|
Value
Realized
on
Exercise
($)
|
Number
of
Shares
Acquired
on
Vesting
(#)
|
Value
Realized
on
Vesting
($)
|
||||
|
Jack
E. Golsen
|
-
|
-
|
-
|
-
|
||||
|
Tony
M. Shelby
|
85,000
|
410,125
|
-
|
-
|
||||
|
Barry
H. Golsen
|
8,750
|
63,000
|
-
|
-
|
||||
|
David
R. Goss
|
85,000
|
410,325
|
-
|
-
|
||||
|
David
M. Shear
|
64,000
|
351,671
|
-
|
-
|
||||
|
Name
and
Executive
Benefit
and
Payments
Upon
Separation
|
Voluntary
Termination
($)
|
Involuntary
Other Than
For
Cause
Termination
($)
|
Involuntary
For
Cause Termination
($)
|
Involuntary
Other
Than
For
Cause
Termination
-
Change of
Control
($)
|
Voluntary
For
Good
Reason
Termination
-
Change of Control
($)
|
Disability/
Incapacitation
($)
|
Death
($)
|
|
Jack
E. Golsen:
|
|||||||
|
Salary
|
-
|
621,750
|
-
|
1,464,830
|
1,464,830
|
2,845,128
|
-
|
|
Bonus
|
-
|
125,000
|
-
|
-
|
-
|
-
|
-
|
|
Death
Benefits
|
-
|
-
|
-
|
-
|
-
|
-
|
4,250,000
|
|
Other
|
-
|
44,336
|
-
|
-
|
-
|
-
|
44,336
|
|
Tony
M. Shelby:
|
|||||||
|
Salary
|
-
|
-
|
-
|
778,347
|
778,347
|
-
|
-
|
|
Death
Benefits
|
-
|
-
|
-
|
-
|
-
|
-
|
350,000
|
|
Other
|
259,043
|
-
|
-
|
-
|
-
|
-
|
|
|
Barry
H. Golsen:
|
|||||||
|
Salary
|
-
|
-
|
-
|
1,253,344
|
1,253,344
|
-
|
-
|
|
Death
Benefits
|
-
|
-
|
-
|
-
|
-
|
-
|
415,962
|
|
David
R. Goss:
|
|||||||
|
Salary
|
-
|
-
|
-
|
756,847
|
756,847
|
-
|
-
|
|
Death
Benefits
|
-
|
-
|
-
|
-
|
-
|
-
|
350,000
|
|
Other
|
276,708
|
-
|
-
|
-
|
-
|
-
|
-
|
|
David
M. Shear:
|
|||||||
|
Salary
|
-
|
-
|
-
|
669,177
|
669,177
|
-
|
-
|
|
Death
Benefits
|
-
|
-
|
-
|
-
|
-
|
-
|
79,567
|
| · |
any
individual, firm, corporation, entity, or group (as defined in
Section
13(d)(3) of the Securities Exchange Act of 1934, as amended) becomes
the
beneficial owner, directly or indirectly, of 30% or more
|
|
of
the combined voting power of the Company’s outstanding voting securities
having the right to vote for the election of directors, except
acquisitions by:
|
| · |
any
person, firm, corporation, entity, or group which, as of the date
of the
severance agreement, has that ownership, or
|
| · |
Jack
E. Golsen, his wife; his children and the spouses of his children;
his
estate; executor or administrator of any estate, guardian or custodian
for
Jack E. Golsen, his wife, his children, or the spouses of his children,
any corporation, trust, partnership, or other entity of which Jack
E.
Golsen, his wife, children, or the spouses of his children own at
least
80% of the outstanding beneficial voting or equity interests, directly
or
indirectly, either by any one or more of the above-described persons,
entities, or estates; and certain affiliates and associates of any
of the
above-described persons, entities, or estates;
|
| · |
individuals
who, as of the date of the severance agreement, constitute the Board
of
Directors of the Company (the “Incumbent Board”) and who cease for any
reason to constitute a majority of the Board of Directors except
that any
person becoming a director subsequent to the date of the severance
agreement, whose election or nomination for election is approved
by a
majority of the Incumbent Board (with certain limited exceptions),
will
constitute a member of the Incumbent Board; or
|
| · |
the
sale by the Company of all or substantially all of its
assets.
|
| · |
the
mental or physical disability from performing the officer’s duties for a
period of 120 consecutive days or one hundred eighty days (even though
not
consecutive) within a 360 day period;
|
| · |
the
conviction of a felony;
|
| · |
the
embezzlement by the officer of Company assets resulting in substantial
personal enrichment of the officer at the expense of the Company;
or
|
| · |
the
willful failure (when not mentally or physically disabled) to follow
a
direct written order from the Company’s Board of Directors within the
reasonable scope of the officer’s duties performed during the 60 day
period prior to the change in control.
|
| · |
the
conviction of Mr. Golsen of a felony involving moral turpitude after
all
appeals have been completed; or
|
| · |
if
due to Mr. Golsen’s serious, willful, gross misconduct or willful, gross
neglect of his duties has resulted in material damages to the Company
and
its subsidiaries, taken as a whole, provided that:
|
| · |
no
action or failure to act by Mr. Golsen will constitute a reason for
termination if he believed, in good faith, that such action or failure
to
act was in the Company’s or its subsidiaries’ best interest, and
|
| · |
failure
of Mr. Golsen to perform his duties hereunder due to disability shall
not
be considered willful, gross misconduct or willful, gross negligence
of
his duties for any purpose.
|
| · |
the
assignment to the officer of duties inconsistent with the officer’s
position, authority, duties, or responsibilities during the 60 day
period
immediately preceding the change in control of the Company or any
other
action which results in the diminishment of those duties, position,
authority, or responsibilities;
|
| · |
the
relocation of the officer;
|
| · |
any
purported termination by the Company of the officer’s employment with the
Company otherwise than as permitted by the severance agreement; or
|
| · |
in
the event of a change in control of the Company, the failure of the
successor or parent company to agree, in form and substance satisfactory
to the officer, to assume (as to a successor) or guarantee (as to
a
parent) the severance agreement as if no change in control had
occurred.
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
|
Name
|
Fees
Earned
or
Paid
in
Cash
($)
(1)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-Equity
Incentive
Plan Compensation
($)
|
Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
|
All
Other Compensation
($)
|
Total
($)
|
|
Raymond
B. Ackerman
|
32,500
|
-
|
-
|
-
|
-
|
-
|
32,500
|
|
Robert
C. Brown, M.D.
|
32,000
|
-
|
-
|
-
|
-
|
-
|
32,000
|
|
Charles
A. Burtch
|
32,500
|
-
|
-
|
-
|
-
|
-
|
32,500
|
|
Grant
J. Donovan
|
12,500
|
-
|
-
|
-
|
-
|
-
|
12,500
|
|
N.
Allen Ford
|
12,000
|
-
|
-
|
-
|
-
|
-
|
12,000
|
|
Bernard
G. Ille
|
32,000
|
-
|
-
|
-
|
-
|
-
|
32,000
|
|
Donald
W. Munson
|
55,833
|
-
|
-
|
-
|
-
|
-
|
55,833
|
|
Horace
G. Rhodes
|
32,500
|
-
|
-
|
-
|
-
|
-
|
32,500
|
|
John
A. Shelley
|
32,500
|
-
|
-
|
-
|
-
|
-
|
32,500
|
|
Equity
Compensation Plan
Information
|
|
Plan
Category
|
Number
of securities
to
be issued upon
exercise
of outstanding options, warrants
and
rights
(a)
|
Weighted-average
exercise
price of outstanding options, warrants and rights
(b)
|
Number
of securities
remaining
available
for
future issuance
under
equity
compensation
plans
(excluding
securities
reflected
in column (a))
(c)
|
||
|
Equity
compensation plans approved by stockholders
|
615,304
|
$
|
1.86
|
303,000
|
|||
|
Equity
compensation plans not approved by stockholders (1)
|
890,600
|
$
|
2.06
|
-
|
|||
|
Total
|
1,505,904
|
$
|
1.98
|
303,000
|
| · |
Effective
December 1, 2002, we granted nonqualified options to purchase up
to an
aggregate 112,000 shares of common stock to former employees of two
former
subsidiaries. These options were part of the employees’ severance
compensation arising from the sale of the former subsidiaries’ assets.
Each recipient of a grant received options for the same number of
shares
and having the same exercise price as under the recipient’s vested
incentive stock options which expired upon the sale. Each nonqualified
option was exercisable as of the date of grant and has a term of
ten years
from the original date of grant. As of December 31, 2006, 7,000 shares
are
issuable under the following options: 3,000 have an exercise price
of
$4.188 per share and expire April 22, 2008 and 4,000 have an exercise
price of $2.73 per share and expire November 21, 2011.
|
| · |
On
November 7, 2002, we granted to an employee of the Company a nonqualified
stock option to acquire 50,000 shares of common stock in consideration
of
services rendered to the Company. As of December 31, 2006, 20,000
shares
are issuable at an exercise price of $2.62 per
share.
|
| · |
On
November 29, 2001, we granted to employees of the Company nonqualified
stock options to acquire 102,500 shares of common stock in consideration
of services to the Company. As of December 31, 2006, 62,500 shares
are
issuable at an exercise price of $2.73 per
share.
|
| · |
On
July 20, 2000, we granted nonqualified options to a former employee
of the
Company to acquire 185,000 shares of common stock in consideration
of
services to the Company. As of December 31, 2006, 185,000 shares
are
issuable under the following options: 5,000 shares at $5.362; 80,000
shares at $4.538; 60,000 shares at $1.375; and 40,000 shares at $1.25.
These options were for the same number of shares and the same exercise
prices as under the stock options held by the former employee prior
to
leaving the Company. These options were fully vested at the date
of grant
and expire, as to 100,000 shares, nine years from the date of grant
and as
to the remaining 85,000 shares, seven years from the date of grant.
|
| · |
On
July 8, 1999, in consideration of services to the Company, we granted
nonqualified stock options to acquire 371,500 shares of common stock
at an
exercise price of $1.25 per share to Jack E. Golsen (176,500 shares),
Barry H. Golsen (55,000 shares) and Steven J. Golsen (35,000 shares),
David R. Goss (35,000 shares), Tony M. Shelby (35,000 shares), and
David
M. Shear (35,000 shares) and also granted to certain other employees
nonqualified stock options to acquire a total of 165,000 shares of
common
stock at an exercise price of $1.25 per share in consideration of
services
to the Company. As of December 31, 2006, 516,500 shares are
issuable.
|
| · |
On
April 22, 1998, we granted to certain employees nonqualified stock
options
to acquire shares of common stock at an exercise price of $4.1875
per
share in consideration of services to the Company. As of December
31,
2006, 99,600 shares are issuable under outstanding options under
these
agreements.
|
|
Name
and Address
of
Beneficial
Owner
|
Title
of
Class
|
Amounts
of
Shares
Beneficially
owned
(1)
|
Percent
of
Class+
|
|
Jack
E. Golsen and certain
members
of his family (2)
|
Common
Voting
Preferred
|
4,767,015
1,020,000
|
(3)
(4) (6)
(5)
(6)
|
22.9%
99.9%
|
||
|
Kent
C. McCarthy & affiliates (7)
|
Common
|
3,444,617
|
(8)
|
16.9%
|
||
|
Paul
J. Denby (9)
|
Common
|
1,270,400
|
(9)
|
6.5%
|
||
|
James
W. Sight (10)
|
Common
|
966,320
|
(10)
|
5.0%
|
|
Name
of
Beneficial
Owner
|
Title
of Class
|
Amount
of Shares
Beneficially
Owned (1)
|
Percent
of Class+
|
|
Raymond
B. Ackerman
|
Common
|
21,000
|
(2)
|
*
|
||||
|
Robert
C. Brown, M.D.
|
Common
|
208,329
|
(3)
|
1.1
|
%
|
|||
|
Charles
A. Burtch
|
Common
|
15,000
|
(4)
|
*
|
||||
|
Grant
J. Donovan
|
Common
|
63,911
|
(5)
|
*
|
||||
|
N.
Allen Ford
|
Common
|
1,740
|
(6)
|
*
|
||||
|
Barry
H. Golsen
|
Common
Voting
Preferred
|
3,250,741
1,016,000
|
(7)
(17)
(7)
|
15.9
99.5
|
%
%
|
|||
|
Jack
E. Golsen
|
Common
Voting
Preferred
|
3,900,422
1,020,000
|
(8)
(17)
(8)
|
18.9
99.9
|
%
%
|
|||
|
|
||||||||
|
David
R. Goss
|
Common
|
263,641
|
(9)
|
1.3
|
%
|
|||
|
Bernard
G. Ille
|
Common
|
45,000
|
(10)
|
*
|
||||
|
Jim
D. Jones
|
Common
|
186,352
|
(11)
|
1.0
|
%
|
|||
|
Donald
W. Munson
|
Common
|
16,740
|
(12)
|
*
|
||||
|
Horace
G. Rhodes
|
Common
|
20,000
|
(13)
|
*
|
||||
|
David
M. Shear
|
Common
|
165,756
|
(14)
|
*
|
||||
|
Tony
M. Shelby
|
Common
|
316,910
|
(15)
|
1.6
|
%
|
|||
|
John
A. Shelley
|
Common
|
-
|
-
|
|||||
|
Directors
and Executive Officers as a group number
(15
persons)
|
Common
Voting
Preferred
|
5,796,229
1,020,000
|
(16)
|
27.2
99.9
|
%
%
|
| SEC registration fee |
$
|
1,926
|
|||
| Printing expenses |
3,859
|
||||
| Legal fees and expenses |
100,000
|
(1) | |||
| Accounting fees and expenses |
29,000
|
||||
| Miscellaneous expenses |
14,219
|
||||
| TOTAL EXPENSES |
$
|
149,004
|
|||
| (1) |
These
amounts include $7,476 in fees and expenses that the Registrant has
paid
to special counsel for the Selling Security Holders pursuant to the
registration rights agreement in connection with this Registration
Statement.
|
| 1. |
Private
Placement of Common Stock and Warrants.
Effective March 25, 2003, the Company completed a private placement
to
Jayhawk Institutional Partners, L.P. ("Jayhawk") of 450,000 shares
of the
Company's common stock and a five year warrant to purchase up to
112,500
share of the Company's common stock at an exercise price of $3.49
per
share, subject to anti-dilution adjustments under certain conditions.
Jayhawk was also granted certain registration rights, which Jayhawk
elected not to exercise in connection with this Registration Statement.
The total price paid by Jayhawk to the Company for the shares of
common
stock and the warrant was $1,570,500. The average closing price of
the
Company's common stock over the 30-day period prior to the transaction
was
$3.49. The net proceeds of the private placement were used to repay
certain debt of the Company. Jayhawk represented to the Company that
it is
an accredited investor, as such term is defined in Rule 501 of Regulation
D promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). In addition, Jayhawk received all information
as
required under Rule 502 of Regulation D. In reliance upon these and
other
representations made by Jayhawk, the private placement was exempt
from
registration as a nonpublic offering pursuant to Section 4(2) of
the
Securities Act and pursuant to Rule 506 of Regulation D promulgated
under
the Securities Act.
|
| 2. |
Private
Placement of Debentures.
On March 14, 2006, the Company completed a private placement, effective
as
of March 3, 2006, to seven qualified institutional buyers (“QIBs”),
pursuant to which the Company sold $18 million aggregate principal
amount
of its 7% Convertible Senior Subordinated Debentures due 2011 pursuant
to
the exemptions from the registration requirements of the Securities
Act of
1933, as amended (the “Act”), afforded by Section 4(2) of the Act and/or
Regulation D promulgated under the Act. The debentures are eligible
for
resale by the investors under Rule144A under the Act prior to registration
of the debentures. J Giordano Securities Group acted as the Company’s
exclusive placement agent for this transaction and was paid an aggregate
of 6% of the aggregate gross proceeds in the financing. Aggregate
estimated offering expenses in connection with the transaction, including
discounts and commissions, were approximately $.4 million. In connection
with the closing, the Company entered into an indenture (the “Indenture”)
with UMB Bank, n.a., as trustee (the “Trustee”), governing the debentures.
The Trustee is also the Company’s transfer agent. The Trustee receives
customary compensation from the Company for such services. Pursuant
to the
terms and conditions of a registration rights agreement entered into
between us and each of the QIBs, the Company has registered for resale
the
debentures and the common stock issuable upon conversion of the
debentures. This post effective amendment is filed to requirements
of the
registration rights agreement.
|
| 3. |
Exchange
Agreements.
The Company issued a total of 773,655 shares of common stock upon
separate
exchanges of shares of the Company’s outstanding Series 2 Preferred for
shares of common stock. Each exchange was completed pursuant to separate
Exchange Agreements with the holder of the Series 2 Preferred, each
of
which provided for (a) the issuance of 7.4 shares of common stock
in
exchange for each share of the Series 2 Preferred beneficially owned
by
the holder and (b) the waiver by the holder of all of the holders
rights
to all accrued and unpaid dividends on the Series 2 Preferred. Each
Exchange Agreement was solicited by and negotiated with each holder.
Neither the Company nor any holder paid or gave, or agreed to pay
or give,
directly or indirectly, any commission or other remuneration for
soliciting each exchange. The exchanges were conducted under the
exemption
from registration provided by Section 3(a)(9) the Securities Act.
No
fractional shares were issued, so cash was paid in lieu of any additional
shares. The following lists:
|
| · |
the
name of each holder of Series 2 Preferred that solicited the exchange
from
the Company and entered into an Exchange
Agreement,
|
| · |
the
date of the respective Exchange
Agreement,
|
| · |
the
number of shares of Series 2 Preferred surrended pursuant to each
Exchange
Agreement,
|
| · |
the
number of shares of common stock issued to the holder upon the exchange,
and
|
| · |
the
amount of dividends waived by each holder on the Series 2 Preferred
surrendered to the Company pursuant to each Exchange Agreement:
|
|
Name
of Holder
|
Date
of
Exchange |
Series
2
Preferred Surrendered |
Common
Stock Issued |
Dividends
Waived(1) |
|||||||||
|
James
W. Sight
|
10/6/06
|
35,428
|
262,167
|
$ | 824,143.85 | ||||||||
|
Paul
Denby Revocable Trust, U/A/D 10/12/93
|
10/6/06
|
25,000
|
185,000
|
581,562.50
|
|||||||||
|
Paul
J. Denby IRA
|
10/6/06
|
11,000
|
81,400
|
255,887.50
|
|||||||||
|
Denby
Enterprises, Inc.
|
10/6/06
|
4,000
|
29,600
|
93,050.00
|
|||||||||
|
Tracy
Denby
|
10/6/06
|
1,000
|
7,400
|
23,262.50
|
|||||||||
|
Brent
Cohen
|
10/11/06
|
4,000
|
29,600
|
93,050.00
|
|||||||||
|
Brian
J. Denby and Mary Denby
|
10/11/06
|
1,200
|
8,880
|
27,915.00
|
|||||||||
|
Brian
Denby, Inc. Profit Sharing Plan
|
10/11/06
|
600
|
4,440
|
13,957.50
|
|||||||||
|
Brian
J. Denby, Trustee, Money Purchase Pension Plan
|
10/11/06
|
5,200
|
38,480
|
120,965.00
|
|||||||||
|
Harold
Seidel
|
10/12/06
|
10,000
|
74,000
|
232,625.00
|
|||||||||
|
William
M. and Laurie Stern
|
10/25/06
|
400
|
2,960
|
9,305.00
|
|||||||||
|
William
M. Stern Revocable Trust, UTD July, 9, 1992
|
10/25/06
|
1,570
|
11,618
|
36,522.13
|
|||||||||
|
William
M. Stern IRA
|
10/25/06
|
2,000
|
14,800
|
46,525.00
|
|||||||||
|
William
M. Stern, Custodian for David Stern
|
10/25/06
|
1,300
|
9,620
|
30,241.25
|
|||||||||
|
John
Cregan
|
10/25/06
|
500
|
3,700
|
11,631.25
|
|||||||||
|
Frances
Berger
|
10/25/06
|
1,350
|
9,990
|
31,404.38
|
|||||||||
|
Total
|
104,548
|
773,655
|
$
|
2,432,047.85
|
|||||||||
| 4. |
Company
Tender Offer.
On November 10, 2006, the Company entered into an agreement (“Jayhawk
Agreement”) with the Jayhawk Group. Under the Jayhawk Agreement, the
Jayhawk Group agreed, if the Company made an exchange offer for the
Series
2 Preferred, to tender (discussed below) 180,450 shares of the 346,662
shares of Series 2 Preferred owned by the Jayhawk Group. In addition,
as a
condition to the Jayhawk Group’s obligation to tender such shares of
Series 2 Preferred in an exchange offer, the Jayhawk Agreement further
provided that Jack E. Golsen (Chairman of the Board and CEO of the
Company), his wife, children and certain entities controlled by them
(the
“Golsen Group”) would exchange only 26,467 of the 49,550 shares of Series
2 Preferred beneficially owned by them. As a result, only 309,807
of the
499,102 shares of Series 2 Preferred outstanding would be eligible
to
participate in an exchange offer, with the remaining 189,295 being
held by
the Jayhawk Group and the Golsen Group. On January 26, 2007, our
Board of
Directors approved and on February 9, 2007, we began a tender offer
to
exchange shares of our common stock for up to 309,807 of the 499,102
outstanding shares of the Series 2 Preferred. The tender offer expired
on
March 12, 2007. Our Board of Directors accepted the shares so tendered
on
March 13, 2007. The terms of the exchange offer provided for
|
| 5. |
Conversions
of Debentures.
Since the issuance of the debentures effective March 3, 2006, the
Company
has issued a total of 2,401,248 shares of common stock upon conversions
of
an aggregate of $17 million principal amount of the debentures. The
issuances of the shares of common stock by as a result of the debentures
conversions were not registered under the Securities Act pursuant
to an
exemption from registration under Section 3(a)(9) of the Securities
Act.
No fractional shares were issued so cash was paid in lieu of any
additional shares. As set forth below, the Company agreed to pay
the
amount of interest that would have been owing on the debentures as
of
March 1, 2007. The following lists:
|
| · |
the
name of each debenture holder that was issued shares of common stock
upon
the conversion of the debentures,
|
| · |
the
aggregate principal amount of debentures converted by such
holder,
|
| · |
the
date of the respective conversion,
|
| · |
the
number of shares of common stock issued to the holder upon conversion
of
the debentures, and
|
| · |
the
amount of prepaid interest paid to the holder upon conversion of
the
debenture, if any:
|
|
Name
of debenture holder
|
Principal
Amount of Debentures Converted |
Approximate
Date of Conversion |
Shares
of
Common Stock Issued |
Prepaid
Interest |
||||||||
|
Alexandra
Global Master Fund Ltd.
|
$
|
1,000,000
|
09/06/06
|
141,250
|
$
|
35,000
|
||||||
|
Alexandra
Global Master Fund Ltd.
|
2,000,000
|
11/24/06
|
282,500
|
70,000
|
||||||||
|
Bancroft
Fund Ltd.
|
1,450,000
|
02/13/07
|
204,812
|
50,750
|
||||||||
|
Context
Advantage Fund, L.P.
|
1,000,000
|
09/15/06
|
141,250
|
35,000
|
||||||||
|
Context
Offshore Advantage Fund, Ltd.
|
1,500,000
|
09/15/06
|
211,875
|
52,500
|
||||||||
|
Ellsworth
Fund Ltd
|
1,450,000
|
02/13/07
|
204,812
|
50,750
|
||||||||
|
Highbridge
International, LLC
|
5,000,000
|
11/24/06
|
706,250
|
175,000
|
||||||||
|
Technology
Yield Fund
|
250,000
|
09/22/06
|
35,312
|
-
|
||||||||
|
Technology
Yield Fund
|
250,000
|
11/24/06
|
35,312
|
8,750
|
||||||||
|
Technology
Yield Fund
|
500,000
|
12/20/06
|
70,625
|
17,500
|
||||||||
|
J
Giordano Securities
|
100,000
|
02/08/07
|
14,125
|
-
|
||||||||
|
Context
Advantage Master Fund, Ltd.
|
2,500,000
|
11/21/06
|
353,125
|
87,500
|
||||||||
|
$
|
17,000,000
|
2,401,248
|
$
|
582,750
|
||||||||
| 6. |
Proposed
Conversion.
|
|
3(i).1
|
Restated
Certificate of Incorporation, filed September 2, 1987 (previously
filed as
Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K for the year
ended December 31, 2006, filed on March 27, 2007, and incorporated
by
reference herein).
|
|
3(i).2
|
Certificate
of Designations, filed February 21, 1989 (previously filed as Exhibit
3.2
to the Registrant’s Annual Report on Form 10-K for the year ended December
31, 2006, filed on March 27, 2007, and incorporated by reference
herein).
|
|
3(i).3
|
Certificate
of Elimination, filed May 13, 1993 (previously filed as Exhibit 3.3
to the
Registrant’s Annual Report on Form 10-K for the year ended December 31,
2006, filed on March 27, 2007, and incorporated by reference
herein).
|
|
3(i).4
|
Certificate
of Designations, filed May 21, 1993 (previously filed as Exhibit
3.4 to
the Registrant’s Annual Report on Form 10-K for the year ended December
31, 2006, filed on March 27, 2007, and incorporated by reference
herein).
|
|
3(i).5
|
Certificate
of Amendment, filed September 3, 1993 (previously filed as Exhibit
3.5 to
the Registrant’s Annual Report on Form 10-K for the year ended December
31, 2006, filed on March 27, 2007, and incorporated by reference
herein)..
|
|
3(i).6
|
Certificate
of Change of Registered Agent, filed November 24, 1998 (previously
filed
as Exhibit 3.6 to the Registrant’s Annual Report on Form 10-K for the year
ended December 31, 2006, filed on March 27, 2007, and incorporated
by
reference herein).
|
|
3(i).7
|
Certificate
of Designations, filed February 5, 1999 (previously filed as Exhibit
3.7
to the Registrant’s Annual Report on Form 10-K for the year ended December
31, 2006, filed on March 27, 2007, and incorporated by reference
herein).
|
|
3(i).8
|
Certificate
of Elimination, filed April 16, 1999 (previously filed as Exhibit
3.8 to
the Registrant’s Annual Report on Form 10-K for the year ended December
31, 2006, filed on March 27, 2007, and incorporated by reference
herein).
|
|
3(i).9
|
Certificate
of Designations, filed November 15, 2001 (previously filed as Exhibit
3.9
to the Registrant’s Annual Report on Form 10-K for the year ended December
31, 2006, filed on March 27, 2007, and incorporated by reference
herein).
|
|
3(i).10
|
Certificate
of Amendment to Certificate of Designations of the $3.25 Convertible
Exchangeable Class C Preferred Stock, Series 2, filed March 6, 2007
(previously filed as Exhibit 3.10 to the Registrant’s Annual Report on
Form 10-K for the year ended December 31, 2006, filed on March 27,
2007,
and incorporated by reference herein).
|
|
3(i).11
|
Bylaws,
as amended, which the Company hereby incorporates by reference from
Exhibit 3(ii) to the Company's Form 10-Q for the quarter ended June
30,
1998. See SEC file number
001-07677.
|
|
4.1
|
Specimen
Certificate for the Company's Non-cumulative Preferred Stock, having
a par
value of $100 per share which the Company incorporates by reference
from
Exhibit 4.1 to the company’s Form 10-K for the fiscal year ended December
31, 2005.
|
|
4.2
|
Specimen
Certificate for the Company's Series B Preferred Stock, having a
par value
of $100 per share, which the Company hereby incorporates by reference
from
Exhibit 4.27 to the Company's Registration Statement No.
33-9848.
|
|
4.3
|
Specimen
Certificate for the Company's Series 2 Preferred, which the Company
hereby
incorporates by reference from Exhibit 4.5 to the Company's Registration
Statement No. 33-61640.
|
|
4.4
|
Specimen
of Certificate of Series D 6% Cumulative, Convertible Class C Preferred
Stock which the Company hereby incorporates by reference from Exhibit
4.1
to the Company's Form 10-Q for the fiscal quarter ended September
30,
2001.
|
|
4.5
|
Specimen
Certificate for the Company's Common Stock, which the Company incorporates
by reference from Exhibit 4.4 to the Company's Registration Statement
No.
33-61640.
|
|
4.6
|
Renewed
Rights Agreement, dated January 6, 1999 between the Company and Bank
One,
N.A., which the Company hereby incorporates by reference from Exhibit
No.
1 to the Company's Form 8-A Registration Statement, dated January
27,
1999.
|
|
4.7
|
Loan
and Security Agreement, dated April 13, 2001 by and among LSB Industries,
Inc., ThermaClime and each of its Subsidiaries that are Signatories,
the
Lenders that are Signatories and Foothill Capital Corporation, which
the
Company hereby incorporates by reference from Exhibit 10.51 to
ThermaClime, Inc.'s amendment No. 1 to Form 10-K for the fiscal year
ended
December 31, 2000. See SEC file number
001-07677
|
|
4.8
|
Second
Amendment to Loan and Security Agreement, dated May 24, 2002 by and
among
the Company, LSB, certain subsidiaries of the Company, Foothill Capital
Corporation and Congress Financial Corporation (Southwest), which
the
Company hereby incorporates by reference from Exhibit 4.1 to the
Company's
Form 8-K, dated May 24, 2002. Omitted are exhibits and schedules
attached
thereto. The Agreement contains a list of such exhibits and schedules,
which the Company agrees to file with the Commission supplementally
upon
the Commission's request.
|
|
4.9
|
Third
Amendment, dated as of November 18, 2002 to the Loan and Security
Agreement dated as of April 13, 2001 as amended by the First Amendment
dated as of August 3, 2001 and the second Amendment dated as of May
24,
2002 by and among LSB Industries, Inc., ThermaClime, Inc., and certain
subsidiaries of ThermaClime, Congress Financial Corporation (Southwest)
and Foothill Capital Corporation which the Company hereby incorporates
by
reference from Exhibit 4.1 to the Company's Form 10-Q for the fiscal
quarter ended September 30, 2002.
|
|
4.10
|
Fourth
Amendment, dated as of March 3, 2003 to the Loan and Security Agreement
dated as of April 13, 2001 as amended by the First, Second, and Third
Amendments, by and among LSB Industries, Inc., ThermaClime, Inc.,
and
certain subsidiaries of ThermaClime, Inc., Congress Financial Corporation
(Southwest) and Foothill Capital Corporation, which the Company hereby
incorporates by reference from Exhibit 4.18 to the Company's Form
10-K for
the fiscal year ended December 31,
2002.
|
|
4.11
|
Fifth
Amendment, dated as of December 31, 2003 to the Loan and Security
Agreement dated as of April 13, 2001 as amended by the First, Second,
Third and Fourth Amendments, by and among LSB Industries, Inc.,
ThermaClime, Inc., and certain subsidiaries of ThermaClime, Inc.,
Congress
Financial Corporation (Southwest) and Wells Fargo Foothill, Inc.,
which
the Company hereby incorporates by reference from Exhibit 4.15 to
the
Company’s Form 10-K for the fiscal year ended December 31, 2004.
|
|
4.12
|
Waiver
and Consent, dated March 25, 2004 to the Loan and Security Agreement,
dated as of April 13, 2001 (as amended to date), by and among LSB
Industries, Inc., ThermaClime, Inc., and certain subsidiaries of
ThermaClime, Inc. and Wells Fargo Foothill, Inc. which the Company
hereby
incorporates by reference from Exhibit 4.16 to the Company’s Form 10-K for
the fiscal year ended December 31, 2004.
|
|
4.13
|
Sixth
Amendment, dated as of June 29, 2004 to the Loan and Security Agreement
dated as of April 13, 2001 as amended, by and among LSB Industries,
Inc.,
ThermaClime, Inc. and certain subsidiaries of ThermaClime, Inc.,
Congress
Financial Corporation (Southwest) and Wells Fargo Foothill, Inc.,
which
the Company hereby incorporates by reference from Exhibit 4.1 to
the
Company’s Form 10-Q for the fiscal quarter ended September 30, 2004.
|
|
4.14
|
Seventh
Amendment, dated as of September 15, 2004 to the Loan and Security
Agreement dated as of April 13, 2001 as amended, by and among LSB
Industries, Inc., ThermaClime, Inc. and certain subsidiaries of
ThermaClime, Inc., Congress Financial Corporation (Southwest) and
Wells
Fargo Foothill, Inc., which the Company hereby incorporates by reference
from Exhibit 4.2 to the Company’s Form 10-Q for the fiscal quarter ended
September 30, 2004.
|
|
4.15
|
Eighth
Amendment to Loan and Security Agreement, dated February 28, 2005,
between
LSB Industries, Inc., ThermaClime, Inc., the subsidiaries of ThermaClime,
Inc. that are signatories thereto, and Wells Fargo Foothill, Inc.,
as
arranger and administrative agent for various lenders, which the
Company
hereby incorporates by reference from Exhibit 10.1 to the Company’s Form
8-K, dated February 28, 2005.
|
|
4.16
|
Ninth
amendment to Loan and Security Agreement, dated February 22, 2006,
between
LSB Industries, Inc., ThermaClime, Inc., the subsidiaries of ThermaClime,
Inc. that are signatories thereto, and Wells Fargo Foothill, Inc.,
as
arranger and administrative agent for various lenders which the Company
hereby incorporates by reference from Exhibit 4.20 to the Company’s Form
10-K for the year ended December 31,
2005.
|
|
4.17
|
Wells
Fargo Foothill consent, dated May 5, 2006 to the redemption of the
Senior
Notes by ThermaClime which the Company hereby incorporates by reference
from Exhibit 4.1 to the Company’s Form 10-Q for the fiscal quarter ended
June 30, 2006.
|
|
4.18
|
Tenth
amendment to Loan and Security Agreement, dated March 21, 2007, between
LSB Industries, Inc., ThermaClime, Inc., the subsidiaries of ThermaClime,
Inc. that are signatories thereto, and Wells Fargo Foothill, Inc.,
as
arranger and administrative agent for various lenders (previously
filed as
Exhibit 4.18 to the Registrant’s Annual Report on Form 10-K for the year
ended December 31, 2006, filed on March 27, 2007, and incorporated
by
reference herein).
|
|
4.19
|
Loan
Agreement, dated September 15, 2004 between ThermaClime, Inc. and
certain
subsidiaries of ThermaClime, Inc., Cherokee Nitrogen Holdings, Inc.,
Orix
Capital Markets, L.L.C. and LSB Industries, Inc. (“Loan Agreement”) which
the Company hereby incorporates by reference from Exhibit 4.1 to
the
Company’s Form 8-K, dated September 16, 2004. The Loan Agreement lists
numerous Exhibits and Schedules that are attached thereto, which
will be
provided to the Commission upon the commission’s
request.
|
|
4.20
|
First
Amendment, dated February 18, 2005 to Loan Agreement, dated as of
September 15, 2004, among ThermaClime, Inc., and certain subsidiaries
of
ThermaClime, Cherokee Nitrogen Holdings, Inc., and Orix Capital Markets,
L.L.C. which the Company hereby incorporates by reference from Exhibit
4.21 to the Company’s Form 10-K for the year ended December 31, 2004.
|
|
4.21
|
Waiver
and Consent, dated as of January 1, 2006 to the Loan Agreement dated
as of
September 15, 2004 among ThermaClime, Inc., and certain subsidiaries
of
ThermaClime, Inc., Cherokee Nitrogen Holdings, Inc., Orix Capital
Markets,
L.L.C. and LSB Industries, Inc. which the Company hereby incorporates
by
reference from Exhibit 4.23 to the Company’s Form 10-K for the year ended
December 31, 2005.
|
|
4.22
|
Consent
of Orix Capital Markets, LLC and the Lenders of the Senior Credit
Agreement, dated May 12, 2006, to the interest rate of a loan between
LSB
and ThermaClime and the utilization of the loan proceeds by ThermaClime
and the waiver of related covenants which the Company hereby incorporates
by reference from Exhibit 4.2 to the Company’s Form 10-Q for the fiscal
quarter ended June 30, 2006.
|
|
4.23
|
Indenture,
dated March 3, 2006, by and among the Company and UMB Bank, which
the
Company hereby incorporates by reference from Exhibit 99.2 to the
Company’s Form 8-K, dated March 14,
2006.
|
|
4.24
|
Certificate
of 7% Senior Subordinated Convertible Debentures which the Company
hereby
incorporates by reference from Exhibit 4.1 to the Company’s Form 8-K,
dated March 14, 2006.
|
|
10.1
|
Limited
Partnership Agreement dated as of May 4, 1995 between the general
partner,
and LSB Holdings, Inc., an Oklahoma Corporation, as limited partner
which
the Company hereby incorporates by reference from Exhibit 10.11 to
the
Company's Form 10-K for the fiscal year ended December 31, 1995.
See SEC
file number 001-07677.
|
|
10.2
|
Form
of Death Benefit Plan Agreement between the Company and the employees
covered under the plan, which the Company incorporates by reference
from
Exhibit 10.2 to the Company’s Form 10-K for the fiscal year ended December
31, 2005.
|
|
10.3
|
The
Company's 1993 Stock Option and Incentive Plan, which the Company
incorporates by reference, which the Company incorporates by reference
from Exhibit 10.3 to the Company’s Form 10-K for the fiscal year ended
December 31, 2005.
|
|
10.4
|
First
Amendment to Non-Qualified Stock Option Agreement, dated March 2,
1994 and
Second Amendment to Stock Option Agreement, dated April 3, 1995 each
between the Company and Jack E. Golsen, which the Company hereby
incorporates by reference from Exhibit 10.1 to the Company's Form
10-Q for
the fiscal quarter ended March 31, 1995. See SEC file number
001-07677.
|
|
10.5
|
Non-Qualified
Stock Option Agreement, dated April 22, 1998 between the Company
and
Robert C. Brown, M.D., which the Company hereby incorporates by reference
from Exhibit 10.43 to the Company’s Form 10-K for the fiscal year ended
December 31, 1998. The Company entered into substantially identical
agreements with Bernard G. Ille, Raymond B. Ackerman, Horace G. Rhodes,
and Donald W. Munson. The Company will provide copies of these agreements
to the Commission upon request. See SEC file number
001-07677.
|
|
10.6
|
The
Company's 1998 Stock Option and Incentive Plan, which the Company
hereby
incorporates by reference from Exhibit 10.44 to the Company's Form
10-K
for the year ended December 31, 1998. See SEC file number
001-07677.
|
|
10.7
|
LSB
Industries, Inc. 1998 Stock Option and Incentive Plan, which the
Company
hereby incorporates by reference from Exhibit "B" to the LSB Proxy
Statement, dated May 24, 1999 for Annual Meeting of Stockholders.
See SEC
file number 001-07677.
|
|
10.8
|
LSB
Industries, Inc. Outside Directors Stock Option Plan, which the Company
hereby incorporates by reference from Exhibit "C" to the LSB Proxy
Statement, dated May 24, 1999 for Annual Meeting of Stockholders.
See SEC
file number 001-07677.
|
|
10.9
|
Nonqualified
Stock Option Agreement, dated November 7, 2002 between the Company
and
John J. Bailey Jr, which the Company hereby incorporates by reference
from
Exhibit 10.55 to the Company's Form 10-K/A Amendment No.1 for the
fiscal
year ended December 31, 2002.
|
|
10.10
|
Nonqualified
Stock Option Agreement, dated November 29, 2001 between the Company
and
Dan Ellis, which the Company hereby incorporates by reference from
Exhibit
10.56 to the Company's Form 10-K/A Amendment No.1 for the fiscal
year
ended December 31, 2002.
|
|
10.11
|
Nonqualified
Stock Option Agreement, dated July 20, 2000 between the Company and
Claude
Rappaport for the purchase of 80,000 shares of common stock, which
the
Company hereby incorporates by reference from Exhibit 10.57 to the
Company's Form 10-K/A Amendment No.1 for the fiscal year ended December
31, 2002. Substantially similar nonqualified stock option agreements
were
entered into with Mr. Rappaport
|
|
|
(40,000
shares at an exercise price of $1.25 per share, expiring on July
20,
2009), (5,000 shares at an exercise price of $5.362 per share,
expiring on
July 20, 2007), and (60,000 shares at an exercise price of $1.375
per
share, expiring on July 20, 2009), copies of which will be provided
to the
Commission upon request.
|
|
10.12
|
Nonqualified
Stock Option Agreement, dated July 8, 1999 between the Company and
Jack E.
Golsen, which the Company hereby incorporates by reference from Exhibit
10.58 to the Company's Form 10-K/A Amendment No.1 for the fiscal
year
ended December 31, 2002. Substantially similar nonqualified stock
options
were granted to Barry H. Golsen (55,000 shares), Stephen J. Golsen
(35,000
shares), David R. Goss (35,000 shares), Tony M. Shelby (35,000 shares),
David M. Shear (35,000 shares), Jim D. Jones (35,000 shares), and
four
other employees (130,000 shares), copies of which will be provided
to the
Commission upon request.
|
|
10.13
|
Severance
Agreement, dated January 17, 1989 between the Company and Jack E.
Golsen
which the Company hereby incorporates by reference from Exhibit 10.13
to
the Company’s Form 10-K for the year ended December 31, 2005.The Company
also entered into identical agreements with Tony M. Shelby, David
R. Goss,
Barry H. Golsen, David M. Shear, and Jim D. Jones and the Company
will
provide copies thereof to the Commission upon request.
|
|
10.14
|
Employment
Agreement and Amendment to Severance Agreement dated January 12,
1989
between the Company and Jack E. Golsen, dated March 21, 1996 which
the
Company hereby incorporates by reference from Exhibit 10.15 to the
Company's Form 10-K for fiscal year ended December 31, 1995. See
SEC file
number 001-07677.
|
|
10.15
|
First
Amendment to Employment Agreement, dated April 29, 2003 between the
Company and Jack E. Golsen, which the Company hereby incorporates
by
reference from Exhibit 10.52 to the Company's Form 10-K/A Amendment
No.1
for the fiscal year ended December 31,
2002.
|
|
10.16
|
Baytown
Nitric Acid Project and Supply Agreement dated June 27, 1997 by and
among
El Dorado Nitrogen Company, El Dorado Chemical Company and Bayer
Corporation which the Company hereby incorporates by reference from
Exhibit 10.2 to the Company's Form 10-Q for the fiscal quarter ended
June
30, 1997. CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED
AS IT
IS THE SUBJECT OF COMMISSION ORDER CF #5551, DATED SEPTEMBER 25,
1997
GRANTING A REQUEST FOR CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF
INFORMATION ACT AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
See
SEC file number 001-07677.
|
|
10.17
|
First
Amendment to Baytown Nitric Acid Project and Supply Agreement, dated
February 1, 1999 between El Dorado Nitrogen Company and Bayer Corporation,
which the Company hereby incorporates by reference from Exhibit 10.30
to
the Company's Form 10-K for the year ended December 31, 1998. CERTAIN
INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT
OF
COMMISSION ORDER CF #7927, DATED JUNE 9, 1999 GRANTING A REQUEST
FOR
CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF INFORMATION ACT AND THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. See SEC file number
001-07677.
|
|
10.18
|
Service
Agreement, dated June 27, 1997 between Bayer Corporation and El Dorado
Nitrogen Company which the Company hereby incorporates by reference
from
Exhibit 10.3 to the Company's Form 10-Q for the fiscal quarter ended
June
30, 1997. CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED
AS IT
IS THE SUBJECT OF COMMISSION ORDER CF #5551, DATED SEPTEMBER 25,
1997,
GRANTING A REQUEST FOR CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF
INFORMATION ACT AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
See
SEC file number 001-07677.
|
|
10.19
|
Ground
Lease dated June 27, 1997 between Bayer Corporation and El Dorado
Nitrogen
Company which the Company hereby incorporates by reference from Exhibit
10.4 to the Company's Form 10-Q for the fiscal quarter ended June
30,
1997. CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS
IT IS
THE SUBJECT OF COMMISSION ORDER CF #5551, DATED SEPTEMBER 25, 1997
GRANTING A REQUEST FOR CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF
|
|
|
INFORMATION
ACT AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. See SEC
file
number 001-07677.
|
|
10.20
|
Participation
Agreement, dated as of June 27, 1997 among El Dorado Nitrogen Company,
Boatmen's Trust Company of Texas as Owner Trustee, Security Pacific
Leasing Corporation, as Owner Participant and a Construction Lender,
Wilmington Trust Company, Bayerische Landes Bank, New York Branch,
as a
Construction Lender and the Note Purchaser, and Bank of America National
Trust and Savings Association, as Construction Loan Agent which the
Company hereby incorporates by reference from Exhibit 10.5 to the
Company's Form 10-Q for the fiscal quarter ended June 30, 1997. CERTAIN
INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT
OF
COMMISSION ORDER CF #5551, DATED SEPTEMBER 25, 1997 GRANTING A REQUEST
FOR
CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF INFORMATION ACT AND THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. See SEC file number
001-07677.
|
|
10.21
|
Lease
Agreement, dated as of June 27, 1997 between Boatmen's Trust Company
of
Texas as Owner Trustee and El Dorado Nitrogen Company which the Company
hereby incorporates by reference from Exhibit 10.6 to the Company's
Form
10-Q for the fiscal quarter ended June 30, 1997. See SEC file number
001-07677.
|
|
10.22
|
Security
Agreement and Collateral Assignment of Construction Documents, dated
as of
June 27, 1997 made by El Dorado Nitrogen Company which the Company
hereby
incorporates by reference from Exhibit 10.7 to the Company's Form
10-Q for
the fiscal quarter ended June 30, 1997. See SEC file number
001-07677.
|
|
10.23
|
Security
Agreement and Collateral Assignment of Facility Documents, dated
as of
June 27, 1997 made by El Dorado Nitrogen Company and consented to
by Bayer
Corporation which the Company hereby incorporates by reference from
Exhibit 10.8 to the Company's Form 10-Q for the fiscal quarter ended
June
30, 1997. See SEC file number
001-07677.
|
|
10.24
|
Loan
Agreement dated December 23, 1999 between Climate Craft, Inc. and
the City
of Oklahoma City, which the Company hereby incorporates by reference
from
Exhibit 10.49 to the Company's Amendment No. 2 to its 1999 Form 10-K.
See
SEC file number 001-07677.
|
|
10.25
|
Assignment,
dated May 8, 2001 between Climate Master, Inc. and Prime Financial
Corporation, which the Company hereby incorporates by reference from
Exhibit 10.2 to the Company's Form 10-Q for the fiscal quarter ended
March
31, 2001.
|
|
10.26
|
Agreement
for Purchase and Sale, dated April 10, 2001 by and between Prime
Financial
Corporation and Raptor Master, L.L.C. which the Company hereby
incorporates by reference from Exhibit 10.3 to the Company's Form
10-Q for
the fiscal quarter ended March 31,
2001.
|
|
10.27
|
Amended
and Restated Lease Agreement, dated May 8, 2001 between Raptor Master,
L.L.C. and Climate Master, Inc. which the Company hereby incorporates
by
reference from Exhibit 10.4 to the Company's Form 10-Q for the fiscal
quarter ended March 31, 2001.
|
|
10.28
|
Option
Agreement, dated May 8, 2001 between Raptor Master, L.L.C. and Climate
Master, Inc., which the Company hereby incorporates by reference
from
Exhibit 10.5 to the Company's Form 10-Q for the fiscal quarter ended
March
31, 2001.
|
|
10.29
|
Stock
Purchase Agreement, dated September 30, 2001 by and between Summit
Machinery Company and SBL Corporation, which the Company hereby
incorporates by reference from Exhibit 10.1 to the Company' Form
10-Q for
the fiscal quarter ended September 30,
2001.
|
|
10.30
|
Asset
Purchase Agreement, dated October 22, 2001 between Orica USA, Inc.
and El
Dorado Chemical Company and Northwest Financial Corporation, which
the
Company hereby incorporates by reference from Exhibit 99.1 to the
Company's Form 8-K dated December 28, 2001. CERTAIN
INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT
OF
COMMISSION ORDER CF 19273, DATED MARCH 21, 2007, GRANTING A REQUEST
FOR
CONFIDENTIAL TREATMENT UNDER
|
|
10.31
|
AN
Supply Agreement, dated November 1, 2001 between Orica USA, Inc.
and El
Dorado Company, which the Company hereby incorporates by reference
from
Exhibit 99.2 to the Company's Form 8-K dated December 28, 2001.
CERTAIN
INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT
OF
COMMISSION ORDER CF 19273, DATED MARCH 21, 2007, GRANTING A REQUEST
FOR
CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF INFORMATION ACT AND
THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
|
|
10.32
|
Second
Amendment to AN Supply Agreement, executed August 24, 2006, to
be
effective as of January 1, 2006, between Orica USA, Inc. and El
Dorado
Company which the Company hereby incorporates by reference from
Exhibit
10.1 to the Company’s Form 10-Q for the fiscal quarter ended September 30,
2006. CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED
AS IT IS
THE SUBJECT OF COMMISSION ORDER CF 19661, DATED MARCH 21, 2007,
GRANTING A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF INFORMATION
ACT
AND THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
|
|
10.33
|
Agreement,
dated August 1, 2004, between El Dorado Chemical Company and Paper,
Allied-Industrial, Chemical and Energy Workers International Union
AFL-CIO
and its Local 5-434, which the Company hereby incorporates by reference
from Exhibit 10.36 to the Company’s Form 10-K for the fiscal year ended
December 31, 2004.
|
|
10.34
|
Agreement,
dated October 17, 2004, between El Dorado Chemical Company and
International Association of Machinists and Aerospace Workers,
AFL-CIO
Local No. 224, which the Company hereby incorporates by reference
from
Exhibit 10.37 to the Company’s Form 10-K for the fiscal year ended
December 31, 2004.
|
|
10.35
|
Agreement,
dated November 12, 2004, between The United Steelworkers of America
International Union, AFL-CIO, CLC, Cherokee Local No. 417-G and
Cherokee
Nitrogen Division of El Dorado Chemical Company, which the Company
hereby
incorporates by reference from Exhibit 10.38 to the Company’s Form 10-K
for the fiscal year ended December 31,
2004.
|
|
10.36
|
Warrant,
dated May 24, 2002 granted by the Company to a Lender for the right
to
purchase up to 132,508 shares of the Company's common stock at
an exercise
price of $0.10 per share, which the Company hereby incorporates
by
reference from Exhibit 99.1 to the Company's Form 8-K, dated May
24, 2002.
Four substantially similar Warrants, dated May 24, 2002 for the
purchase
of an aggregate additional 463,077 shares at an exercise price
of $0.10
were issued. Copies of these Warrants will be provided to the Commission
upon request.
|
|
10.37
|
Asset
Purchase Agreement, dated as of December 6, 2002 by and among Energetic
Systems Inc. LLC, UTeC Corporation, LLC, SEC Investment Corp. LLC,
DetaCorp Inc. LLC, Energetic Properties, LLC, Slurry Explosive
Corporation, Universal Tech Corporation, El Dorado Chemical Company,
LSB
Chemical Corp., LSB Industries, Inc. and Slurry Explosive Manufacturing
Corporation, LLC, which the Company hereby incorporates by reference
from
Exhibit 2.1 to the Company's Form 8-K, dated December 12, 2002.
The asset
purchase agreement contains a brief list identifying all schedules
and
exhibits to the asset purchase agreement. Such schedules and exhibits
are
not filed herewith, and the Registrant agrees to furnish supplementally
a
copy of the omitted schedules and exhibits to the commission upon
request.
|
|
10.38
|
Anhydrous
Ammonia Sales Agreement, dated effective January 3, 2005 between
Koch
Nitrogen Company and El Dorado Chemical Company which the Company
hereby
incorporates by reference from Exhibit 10.41 to the Company’s Form 10-K
for the year ended December 31, 2004. CERTAIN INFORMATION WITHIN
THIS
EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT OF A REQUEST BY THE
COMPANY
FOR CONFIDENTIAL TREATMENT BY THE SECURITIES AND EXCHANGE COMMISSION
UNDER
THE FREEDOM OF INFORMATION ACT. THE OMITTED INFORMATION HAS BEEN
FILED
SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION
FOR PURPOSES OF SUCH REQUEST.
|
|
10.39
|
First
Amendment to Anhydrous Ammonia Sales Agreement, dated effective August
29,
2005, between Koch Nitrogen Company and El Dorado Chemical Company,
which
the Company hereby incorporates by reference from Exhibit 10.42 to
the
Company's Form 10-K for the fiscal year ended December 31, 2005,
filed
March 31, 2006. CERTAIN
INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT
OF
COMMISSION ORDER CF 18274, DATED MARCH 21, 2007, GRANTING A REQUEST
FOR
CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF INFORMATION ACT AND THE
SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
|
|
10.40
|
Purchase
Confirmation, dated July 1, 2006, between Koch Nitrogen Company and
Cherokee Nitrogen Company, which the Company hereby incorporates
by
reference from Exhibit 10.40 to the Company’s Form 10-K for the fiscal
year ended December 31, 2006, filed on March 27, 2007. CERTAIN INFORMATION
WITHIN THIS EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT OF A REQUEST
BY
THE COMPANY FOR CONFIDENTIAL TREATMENT BY THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE FREEDOM OF INFORMATION ACT. THE OMITTED INFORMATION
HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND
EXCHANGE COMMISSION FOR PURPOSES OF SUCH
REQUEST.
|
|
10.41
|
Second
Amendment to Anhydrous Ammonia Sales Agreement, dated November 3,
2006,
between Koch Nitrogen Company and El Dorado Chemical Company which
the
Company hereby incorporates by reference from Exhibit 10.41 to the
Company’s Form 10-K for the fiscal year ended December 31, 2006, filed on
March 27, 2007. CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN
OMITTED
AS IT IS THE SUBJECT OF A REQUEST BY THE COMPANY FOR CONFIDENTIAL
TREATMENT BY THE SECURITIES AND EXCHANGE COMMISSION UNDER THE FREEDOM
OF
INFORMATION ACT. THE OMITTED INFORMATION HAS BEEN FILED SEPARATELY
WITH
THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION FOR PURPOSES
OF
SUCH REQUEST.
|
|
10.42
|
Warrant
Agreement, dated March 25, 2003 between LSB Industries, Inc. and
Jayhawk
Institutional Partners, L.P., which the Company hereby incorporates
by
reference from Exhibit 10.51 to the Company's Form 10-K for the fiscal
year ended December 31, 2002.
|
|
10.43
|
Registration
Rights Agreement, dated March 25, 2003 among LSB Industries, Inc.,
Kent C.
McCarthy, Jayhawk Capital management, L.L.C., Jayhawk Investments,
L.P.
and Jayhawk Institutional Partners, L.P., which the Company hereby
incorporates by reference from Exhibit 10.49 to the Company's Form
10-K
for the fiscal year ended December 31,
2002.
|
|
10.44
|
Subscription
Agreement, dated March 25, 2003 by and between LSB Industries, Inc.
and
Jayhawk Institutional Partners, L.P., which the Company hereby
incorporates by reference from Exhibit 10.50 to the Company's Form
10-K
for the fiscal year ended December 31,
2002.
|
|
10.45
|
Agreement,
dated November 10, 2006 by and among LSB Industries, Inc., Kent C.
McCarthy, Jayhawk Capital Management, L.L.C., Jayhawk Institutional
Partners, L.P. and Jayhawk Investments, L.P., which the Company hereby
incorporates by reference from Exhibit 99d1 to the Company’s Schedule
TO-I, filed February 9, 2007.
|
|
10.46
|
Second
Amendment and Extension of Stock Purchase Option, effective July
1, 2004,
between LSB Holdings, Inc., an Oklahoma corporation and Dr. Hauri
AG, a
Swiss corporation, which the Company hereby incorporates by reference
from
Exhibit 10.1 to the Company’s Form 10-Q for the fiscal quarter ended
September 30, 2004.
|
|
10.47
|
Debt
Forgiveness Agreement, effective July 1, 2004, by and between Companie
Financiere du Taraois, a French corporation and LSB Holding, Inc.,
an
Oklahoma corporation which the Company hereby incorporates by reference
from Exhibit 10.2 to the Company’s Form 10-Q for the fiscal quarter ended
September 30, 2004.
|
|
10.48
|
Purchase
Agreement, dated March 3, 2006, by and among the Company and the
investors
identified on the Schedule of Purchasers which the Company hereby
incorporates by reference from Exhibit 99.1 to the Company’s Form 8-K,
dated March 14, 2006.
|
|
10.49
|
Registration
Rights Agreement, dated March 3, 2006, by and among the Company and
the
Purchasers set fourth in the signature pages which the Company hereby
incorporates by reference from Exhibit 99.3 to the Company’s Form 8-K,
dated March 14, 2006.
|
|
10.50
|
Exchange
Agreement, dated October 6, 2006, between LSB Industries, Inc., Paul
Denby, Trustee of the Paul Denby Revocable Trust, U.A.D. 10/12/93,
The
Paul J. Denby IRA, Denby Enterprises, Inc., Tracy Denby, and Paul
Denby
which the Company hereby incorporates by reference from Exhibit 10.2
to
the Company’s Form 10-Q for the fiscal quarter ended September 30, 2006.
Substantially similar Exchange Agreements (each having the same exchange
rate) were entered with the following individuals or entities on
the dates
indicated for the exchange of the number of shares of LSB’s $3.25
Convertible Exchangeable Class C Preferred Stock, Series 2 (the “Series 2
Preferred”) noted: October 6, 2006 - James W. Sight (35,428 shares of
Series 2 Preferred), Paul Denby, Trustee of the Paul Denby Revocable
Trust, U.A.D. 10/12/93 (25,000 shares of Series 2 Preferred), The
Paul J.
Denby IRA (11,000 shares of Series 2 Preferred), Denby Enterprises,
Inc.
(4,000 shares of Series 2 Preferred), Tracy Denby (1,000 shares of
Series
2 Preferred); October 12, 2006 - Harold Seidel (10,000 shares of
Series 2
Preferred); October 11, 2006 -Brent Cohen (4,000 shares of Series
2
Preferred), Brian J. Denby and Mary Denby (1,200 shares of Series
2
Preferred), Brian J. Denby, Trustee, Money Purchase Pension Plan
(5,200
shares of Series 2 Preferred), Brian Denby, Inc. Profit Sharing Plan
(600
shares of Series 2 Preferred); October 25, 2006 - William M. and
Laurie
Stern ( 400 shares of Series 2 Preferred), William M. Stern Revocable
Living Trust, UTD July 9, 1992 (1,570 shares of Series 2 Preferred),
the
William M. Stern IRA (2,000 shares of Series 2 Preferred), and William
M.
Stern, Custodian for David Stern (1,300 shares of Series 2 Preferred),
John Cregan (500 shares of Series 2 Preferred), and Frances Berger
(1,350
shares of Series 2 Preferred). Copies of the foregoing Exchange Agreements
will be provided to the Commission upon
request.
|
|
14.1
|
Code
of Ethics for CEO and Senior Financial Officers of Subsidiaries of
LSB
Industries, Inc., which the Company hereby incorporates by reference
from
Exhibit 14.1 to the Company’s Form 10-K for the fiscal year ended December
31, 2003.
|
|
21.1
|
Subsidiaries
of the Company, which the Company hereby incorporates by reference
from
Exhibit 21.1 to the Company’s Form 10-K for the fiscal year ended December
31, 2006, filed on March 27, 2006.
|
|
LSB
INDUSTRIES, INC.
|
||
|
Dated:
April 10, 2007
|
By:
|
/s/
Jack E. Golsen
Jack
E. Golsen
Chairman
of the Board and Chief Executive Officer
(Principal
Executive Officer)
|
|
Dated:
April 10, 2007
|
By:
|
/s/
Jack E. Golsen
Jack
E. Golsen
Chairman
of the Board and Chief Executive Officer
(Principal
Executive Officer)
|
|
Dated:
April 10, 2007
|
By:
|
/s/
Barry H. Golsen
Barry
H. Golsen
Vice
Chairman of the Board of Directors and President
|
|
Dated:
April 10, 2007
|
By:
|
/s/
Tony M. Shelby
Tony
M. Shelby
Executive
Vice President of Finance and
Chief
Financial Officer (Principal Financial Officer)
|
|
Dated:
April 10, 2007
|
By:
|
/s/
David R. Goss
David
R. Goss
Executive
Vice President of Operations and Director
|
|
Dated:
April 10, 2007
|
By:
|
/s/
Jim D. Jones
Jim
D. Jones
Senior
Vice President, Corporate Controller
and
Treasurer (Principal Accounting Officer)
|
|
Dated:
April 10, 2007
|
*
Horace
G. Rhodes, Director
|
|
|
Dated:
April 10, 2007
|
*
____________________
Raymond
B. Ackerman, Director
|
|
|
Dated:
April 10, 2007
|
*
____________________
Bernard
G. Ille, Director
|
|
|
Dated:
April 10, 2007
|
*
____________________
Robert
C. Brown, M.D., Director
|
|
|
Dated:
April 10, 2007
|
*
____________________
Charles
A. Burtch, Director
|
|
|
Dated:
April 10, 2007
|
*
____________________
Donald
W. Munson, Director
|
|
|
|
||
|
Dated:
April 10, 2007
|
*
____________________
John
A. Shelley, Director
|
|
|
Dated:
April 10, 2007
|
*
____________________
Grand
J. Donovan, Director
|
|
|
Dated:
April 10, 2007
|
*
____________________
Dr.
N. Allen Ford, Director
|
|
|
*By: /s/
Jack E. Golsen
Jack
E. Golsen, Attorney-in-Fact
|
||