|
Preliminary
Proxy Statement
|
|
Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|
x
|
Definitive
Proxy Statement
|
|
Definitive
Additional Materials
|
|
Soliciting
Material Pursuant to §240.14a-12
|
x No fee
required.
|
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
|
1) Title
of each class of securities to which transaction
applies:
|
2) Aggregate
number of securities to which transaction
applies:
|
3) Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was
determined):
|
4) Proposed
maximum aggregate value of
transaction:
|
5) Total
fee paid:
|
Fee paid previously with preliminary
materials.
|
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
|
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement
No.:
3) Filing Party:
4) Date Filed:
|
(1)
|
The
election of four nominees to the Board of
Directors;
|
(2)
|
The
ratification of the appointment of the independent registered public
accounting firm; and
|
(3)
|
Any
other business which properly may come before the meeting or any
adjournment of the meeting.
|
(a)
|
21,109,812
shares of common stock (excluding 3,848,518 shares held in treasury), with
each share entitled to one vote;
|
(b)
|
546.5 shares
of Convertible Noncumulative Preferred Stock (“Noncumulative Preferred”),
with each full share entitled to one vote and each half share entitled to
one-half of one vote;
|
(c)
|
20,000
shares of Series B 12% Cumulative Convertible Preferred Stock (“Series B
Preferred”), with each share entitled to one vote;
and
|
(d)
|
1,000,000
shares of Series D 6% Cumulative Convertible Preferred Stock ("Series D
Preferred"), with each share entitled to .875 of one
vote.
|
·
|
Directors
are elected by a plurality of the shares present in person or represented
by proxy and entitled to vote at the annual
meeting.
|
·
|
The
ratification of the appointment of the independent registered public
accounting firm requires the affirmative vote of a majority of the shares
present in person or by proxy and entitled to vote at the annual
meeting.
|
·
|
Vote by Internet, by
going to the web address Hwww.envisionreports.com/LXUH
and following the instructions for Internet
voting.
|
·
|
Vote by Telephone, by
dialing 1-800-652-8683, which is a toll-free number, and following the
instructions for telephone voting.
|
·
|
Vote by Proxy Card, by
completing, signing, dating and mailing the enclosed proxy card in the
envelope provided. If you vote by Internet or telephone, please
do not mail your proxy card.
|
·
|
executing
and submitting a revised proxy;
|
·
|
providing
a written revocation to the Secretary of the Company;
or
|
·
|
voting
in person at the meeting.
|
Robert C. Brown, M.D.,
age 77. Dr. Brown first became a director in 1969. His term will expire in
2009. Dr. Brown has practiced medicine for many years and is Vice
President and Treasurer of Plaza Medical Group, P.C. and President and
Chief Executive Officer of ClaimLogic L.L.C. Dr. Brown received both his
undergraduate and medical degrees from Tufts University after which he
spent two years in the United States Navy as a doctor and over three years
at the Mayo Clinic. Dr. Brown is also a Clinical Professor at
University of Oklahoma Medical
School.
|
Barry H. Golsen, J.D.,
age 58. Mr. Golsen first became a director in 1981. His term will expire
in 2009. Mr. Golsen was elected President of the Company in 2004. Mr.
Golsen has served as our Vice Chairman of the Board of Directors since
August 1994, and has been the President of our Climate Control Business
for more than five years. Mr. Golsen served as a director of the Oklahoma
branch of the Federal Reserve Bank. Mr. Golsen has both his undergraduate
and law degrees from the University of Oklahoma.
|
David R. Goss, age 68.
Mr. Goss first became a director in 1971. His term will expire in 2009.
Mr. Goss, a certified public accountant, is our Executive Vice President
of Operations and has served in substantially the same capacity for more
than five years. Mr. Goss is a graduate of Rutgers
University.
|
John A. Shelley, age 58.
Mr. Shelley first became a director in 2005. His term will expire in 2009.
Mr. Shelley is the President and Chief Executive Officer of The Bank of
Union (“Bank of Union”) located in Oklahoma. He has held this position
since 1997. Prior to 1997, Mr. Shelley held various senior level positions
in financial institutions in Oklahoma including the position of President
of Equity Bank for Savings, N.A., a savings and loan that was owned by the
Company prior to 1994. Mr. Shelley is a graduate of the University of
Oklahoma.
|
Raymond B. Ackerman, age
86. Mr. Ackerman first became a director in 1993. His term will expire in
2011. From 1952 until his retirement in 1992, Mr. Ackerman served as
Chairman of the Board and President of Ackerman McQueen, Inc., the largest
advertising and public relations firm headquartered in Oklahoma. He
currently serves as Chairman Emeritus of the firm. He retired as a Rear
Admiral in the United States Naval Reserve. He is a graduate of Oklahoma
City University, and in 1996, was awarded an honorary doctorate from the
school. He was elected to the Oklahoma Hall of Fame in 1993 and the
Oklahoma Commerce and Industry Hall of Honor in 1998. He served
as the President of the Oklahoma City Chamber of Commerce, the United Way,
Allied Arts and six other Oklahoma City based non-profit
organizations.
|
Charles A. Burtch, age
73. Mr. Burtch first became a director in 1999. His term will expire in
2010. Mr. Burtch was formerly Executive Vice-President and West Division
Manager of BankAmerica, where he managed BankAmerica’s asset-based lending
division for the western third of the United States. He retired in 1998
and has since been engaged as a private investor. Mr. Burtch is a graduate
of Arizona State University.
|
Robert A. Butkin, age
56. Mr. Butkin first became a director in August 2007. His
term will expire in 2010. Mr. Butkin is currently a Professor of Law
at the University of Tulsa College of Law. He was Dean of the Tulsa
College of Law from 2005 to 2007. Mr. Butkin also serves as President of
BRJN Capital Corporation, a private investment company. Mr. Butkin served
as Assistant Attorney General for the State of Oklahoma from 1987 to 1993,
and served from 1995 to 2005 as the State Treasurer of Oklahoma.
He has served in various organizations, including holding the presidency
of the Southern State Treasurers Association. He chaired the
Banking, Collateral and Cash Management Committee for the National
Association of State Treasurers. In addition, from 1981 to 1995, he
served on the Board of Citizens Bank of Velma, Oklahoma, and he served as
Chairman of the Board of that bank from 1991 to 1994. He attended and
received a Bachelor of Arts degree from Yale College. He received his
Juris Doctorate from the University of Pennsylvania Law School in
1978.
|
Jack E. Golsen, age 80.
Mr. Golsen first became a director in 1969. His term will expire in 2010.
Mr. Golsen, founder of the Company, is our Chairman of the Board of
Directors and Chief Executive Officer and has served in that capacity
since our inception in 1969. Mr. Golsen served as our President from 1969
until 2004. During 1996, he was inducted into the Oklahoma Commerce and
Industry Hall of Honor as one of Oklahoma’s leading industrialists. Mr.
Golsen has a Bachelor of Science degree from the University of New Mexico.
Mr. Golsen is a Trustee of Oklahoma City University. During his career, he
acquired or started the companies which formed the Company. He has served
on the boards of insurance companies, several banks and was Board Chairman
of Equity Bank for Savings N.A. which was formerly owned by the
Company.
|
Bernard G. Ille, age 82.
Mr. Ille first became a director in 1971. His term will expire in 2011.
Mr. Ille served as President and Chief Executive Officer of United
Founders Life from 1966 to 1988. He served as President and Chief
Executive Officer of First Life Assurance Company from 1988, until it was
acquired by another company in 1994. During his tenure as President of
these two companies, he served as Chairman of the Oklahoma Guaranty
Association for ten years and was President of the Oklahoma Association of
Life Insurance Companies for two terms. He is a director of Landmark Land
Company, Inc., which was the parent company of First Life. He is also a
director for Quail Creek Bank, N.A. Mr. Ille is currently President of BML
Consultants and a private investor. He is a graduate of the University of
Oklahoma.
|
Donald W. Munson, age
76. Mr. Munson first became a director in 1997. His term will expire in
2011. From 1988, until his retirement in 1992, Mr. Munson served as
President and Chief Operating Officer of Lennox Industries. Prior to 1998,
he served as Executive Vice President of Lennox Industries’ Division
Operations, President of Lennox Canada and Managing Director of Lennox
Industries’ European Operations. Prior to joining Lennox Industries, Mr.
Munson served in various capacities with the Howden Group, a company
located in Scotland, and The Trane Company, including serving as the
managing director of various companies within the Howden Group and Vice
President Europe for The Trane Company. He is currently a consultant. Mr.
Munson is a resident of England. He has degrees in mechanical engineering
and business administration from the University of
Minnesota.
|
Ronald V. Perry, age 59.
Mr. Perry first became a director in August 2007. His term will
expire in 2011. Mr. Perry currently serves as President of
Prime Time Travel, which he founded in 1979. He also serves on the Alumni
Board of Directors for Leadership Oklahoma City. Mr. Perry has
served in various charitable and civic organizations. Mr. Perry is also a
past President of the Oklahoma City Food Bank and has served as President
of the OKC Food Bank Board of Directors. In 2007, the mayor of Oklahoma
City appointed Mr. Perry to serve as a commissioner on the Oklahoma City
Convention and Visitors Bureau. Mr. Perry graduated from Oklahoma State
University, with a Bachelor’s degree in Business
Administration.
|
Horace G. Rhodes, age
81. Mr. Rhodes first became a director in 1996. His term will expire in
2010. Mr. Rhodes is the Chairman of the law firm of Kerr, Irvine, Rhodes
& Ables and has served in such capacity and has practiced law for many
years. From 1972 until 2001, he served as Executive Vice President and
General Counsel for the Association of Oklahoma Life Insurance Companies
and since 1982 served as Executive Vice President and General Counsel for
the Oklahoma life and Health Insurance Guaranty Association. Mr. Rhodes
received his undergraduate and law degrees from the University of
Oklahoma.
|
Tony M. Shelby, age 67.
Mr. Shelby first became a director in 1971. His term will expire in 2011.
Mr. Shelby, a certified public accountant, is our Executive Vice President
of Finance and Chief Financial Officer, a position he has held for more
than five years. Prior to becoming our Executive Vice President of Finance
and Chief Financial Officer, he served as Chief Financial Officer of a
subsidiary of the Company and was with the accounting firm of Arthur Young
& Co., a predecessor to Ernst & Young LLP. Mr. Shelby is a
graduate of Oklahoma City University.
|
•
|
presides
at meetings of the Board at which the chairman or vice chairman is not
present, including executive sessions of the independent
Directors;
|
•
|
serves
as a liaison between the chairman and the independent
Directors;
|
•
|
oversees
the Board’s stockholder communications policies;
and
|
•
|
has
the authority to call meetings of the independent
Directors.
|
·
|
Recommending
to the Board the selection criteria that should be considered for
membership on the Board of
Directors;
|
·
|
The
periodic assessment of the selection criteria, and the recommendation of
any changes to the selection
criteria;
|
·
|
Identifying
Director candidates meeting the selection criteria and aiding in
attracting such candidates as
Directors;
|
·
|
The
consideration of proposed Director candidates, in light of the selection
and performance criteria adopted by the
Board;
|
·
|
Reviewing
the qualifications of incumbent, replacement or additional Director
candidates; and
|
·
|
Making
periodic recommendations to the Board regarding its size and
composition.
|
·
|
appoints,
evaluates, and approves the compensation of, our independent registered
public accounting firm;
|
·
|
pre-approves
all auditing services and permitted non-audit services; annually considers
the qualifications and independence of the independent registered public
accounting firm;
|
·
|
reviews
recommendations of independent registered public accounting firm
concerning our accounting principles, internal controls and accounting
procedures and practices;
|
·
|
reviews
and approves the scope of the annual
audit;
|
·
|
reviews
and discusses with the independent registered public accounting firm the
audited financial statements;
|
·
|
reviews
and discusses with the independent registered public accounting firm the
unaudited quarterly financial statements;
and
|
·
|
performs
such other duties as set forth in the Audit Committee
Charter.
|
·
|
Jack
Golsen, Barry Golsen, Steve Golsen, Sylvia Golsen, Linda Rappaport, SBL,
LLC, and Golsen Family, LLC each inadvertently filed one late Form 4 to
report three transactions;
|
·
|
James
Murray inadvertently filed one late Form 4 to report one
transaction;
|
·
|
Raymond
Ackerman inadvertently filed two late Forms 5 to report four
gifts;
|
·
|
Paul
Rydlund and Linda Rappaport each inadvertently filed a late Form 3 to
report their holdings of the Company’s
securities;
|
·
|
Robert
Butkin inadvertently filed one late Form 4 and one late Form 5 to report
one transaction each; and
|
·
|
Bernard
Ille, John Shelley, Raymond Ackerman, Charles Burtch, Donald Munson,
Robert Brown, Ron Perry and Horace Rhodes each inadvertently filed one
late Form 4 to report one
transaction.
|
·
|
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 Compensation 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 us to attract and retain key
talent.
|
·
|
Compensation
should be competitive with compensation offered by other companies that
compete with us for talented individuals in our geographic
area.
|
·
|
Compensation
should reward performance.
|
·
|
Compensation
should motivate executives to achieve our strategic and operational
goals.
|
·
|
base
salary;
|
·
|
cash
bonus;
|
·
|
death
benefit and salary continuation 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.
|
·
|
Non-Qualified
Benefit Plan Agreements, each dated January 1, 1992, between the Company
and each of Barry H. Golsen, David M. Shear, and Steven J. Golsen, Chief
Executive Officer of one of the Company’s subsidiaries and Chief Operating
Officer of the Company’s Climate Control Business;
|
·
|
Severance
Agreements, each dated January 17, 1989, between the Company and certain
of our officers, including each of Jack E. Golsen; Barry H. Golsen; Tony
M. Shelby; David R. Goss; and David M. Shear, (whose
Severance Agreement is dated September 25, 1991); and Steven J. Golsen,
Chief Executive Officer of one of the Company’s subsidiaries and Chief
Operating Officer of the Company’s Climate Control Business;
and
|
·
|
Employment
Agreement, dated March 21, 1996, as amended April 29, 2003 and May 12,
2005, between the Company and Jack E.
Golsen.
|
(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
|
2008
|
575,554
|
200,000
|
-
|
-
|
-
|
-
|
682,646
|
1,458,200
|
of
Directors and
|
2007
|
523,400
|
50,000
|
-
|
-
|
-
|
-
|
645,010
|
1,218,410
|
Chief
Executive Officer
|
2006
|
497,400
|
-
|
-
|
-
|
-
|
-
|
615,168
|
1,112,568
|
Tony M. Shelby, | |||||||||
Executive
Vice President
|
2008
|
268,654
|
125,000
|
15,574
|
409,228
|
||||
of
Finance and Chief
|
2007
|
255,000
|
90,000
|
-
|
-
|
-
|
-
|
22,773
|
367,773
|
Financial
Officer
|
2006
|
245,000
|
40,000
|
-
|
-
|
-
|
-
|
22,428
|
307,428
|
Barry
H. Golsen,
|
|
|
|
|
|
||||
Vice
Chairman of the Board of
|
|||||||||
Directors,
President, and
|
2008
|
479,446
|
175,000
|
27,546
|
681,992
|
||||
President
of the Climate Control
|
2007
|
433,100
|
100,000
|
-
|
-
|
-
|
-
|
22,191
|
555,291
|
Business
|
2006
|
413,600
|
40,000
|
-
|
-
|
-
|
-
|
9,515
|
463,115
|
David
R. Goss,
|
2008
|
259,923
|
85,000
|
14,440
|
359,363
|
||||
Executive
Vice President of
|
2007
|
240,500
|
55,000
|
-
|
-
|
-
|
-
|
12,361
|
307,861
|
Operations
|
2006
|
233,000
|
35,000
|
-
|
-
|
-
|
-
|
14,146
|
282,146
|
David
M. Shear,
|
2008
|
264,423
|
100,000
|
17,149
|
381,572
|
||||
Senior
Vice President and
|
2007
|
240,000
|
75,000
|
-
|
-
|
-
|
-
|
9,961
|
324,961
|
General
Counsel
|
2006
|
225,000
|
35,000
|
-
|
-
|
-
|
-
|
4,628
|
264,628
|
·
|
the
expense incurred associated with our accrued death benefit liability;
or
|
·
|
the
pro rata portion of life insurance premium expense to fund the
undiscounted death benefit.
|
·
|
the
expense incurred associated with our accrued benefit liability
or
|
·
|
the
pro rata portion of life insurance premium expense to fund the
undiscounted death benefit.
|
1981
Agreements
|
1992
Agreements
|
2005
Agreement
|
Other (A)
|
Total
|
Jack
E. Golsen
|
$
|
204,856
|
$
|
-
|
$
|
466,533
|
$
|
11,257
|
$
|
682,646
|
||||
Tony
M. Shelby
|
$
|
7,250
|
$
|
-
|
$
|
-
|
$
|
8,324
|
$
|
15,574
|
||||
Barry
H. Golsen
|
$
|
2,593
|
$
|
18,960
|
$
|
-
|
$
|
5,993
|
$
|
27,546
|
||||
David
R. Goss
|
$
|
4,854
|
$
|
3,352
|
$
|
-
|
$
|
6,234
|
$
|
14,440
|
||||
David
M. Shear
|
$
|
- -
|
$
|
10,782
|
$
|
-
|
$
|
6,367
|
$
|
17,149
|
·
|
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 our or our 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
|
||
David
M. Shear
|
N/A
|
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
|
$
|
-
|
|||||
Barry
H. Golsen
|
$
|
17,480
|
$
|
11,596
|
$
|
33,490
|
||||
David
R. Goss
|
$
|
17,403
|
|
N/A
|
$
|
59,662
|
||||
David
M. Shear
|
$
|
17,822
|
$
|
7,957
|
$
|
-
|
Options
Awards (1)
|
|||||||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
||||||
Name
|
Number
of Securities Underlying Unexercised Options
(#) (2)
Exercisable(2)
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options
(#)
|
Option
Exercise Price
($)
|
Option
Expiration Date(2)
|
||||||
Jack
E. Golsen
|
-
|
-
|
-
|
-
|
-
|
||||||
Tony
M. Shelby
|
100,000
15,000
|
-
-
|
-
-
|
1.25
2.73
|
7/8/2009
11/29/2011
|
||||||
Barry
H. Golsen
|
11,250
|
-
|
-
|
2.73
|
11/29/2011
|
||||||
David
R. Goss
|
65,000
15,000
|
-
-
|
-
-
|
1.25
2.73
|
7/8/2009
11/29/2011
|
||||||
David
M. Shear
|
-
|
-
|
-
|
-
|
-
|
Option
Awards
|
|||||
(a)
|
(b)
|
(c)
|
|||
Name
|
Number
of
Shares
Acquired
on Exercise
(#)
|
Value
Realized
on
Exercise(2)
($)
|
|||
Jack
E. Golsen
|
-
|
-
|
|||
Tony
M. Shelby
|
-
|
-
|
|||
Barry
H. Golsen
|
55,000
|
742,500
|
|||
David
R. Goss
|
35,000
|
338,800
|
|||
David
M. Shear
|
65,544
|
1,472,937
|
·
|
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 our 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 our Board of
Directors (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 us of all or substantially all of our
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 our 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 our 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 our or our 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 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 us of the officer’s employment with us otherwise
than as permitted by the severance agreement;
or
|
·
|
in
the event of a change in control, 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.
|
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
($)
|
|||||||
Jack
E. Golsen:
|
||||||||||||||
Salary
|
-
|
1,294,996
|
-
|
1,684,973
|
1,684,973
|
3,246,125
|
-
|
|||||||
Bonus
|
-
|
450,000
|
-
|
-
|
-
|
-
|
-
|
|||||||
Death
Benefits
|
-
|
-
|
-
|
-
|
-
|
-
|
4,250,000
|
|||||||
Other
|
-
|
59,182
|
-
|
-
|
-
|
-
|
59,182
|
|||||||
Tony
M. Shelby:
|
||||||||||||||
Salary
|
-
|
-
|
-
|
925,222
|
925,222
|
-
|
-
|
|||||||
Death
Benefits
|
-
|
-
|
-
|
-
|
-
|
-
|
350,000
|
|||||||
Other
|
240,794
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||
Barry
H. Golsen:
|
||||||||||||||
Salary
|
-
|
-
|
-
|
1,467,593
|
1,467,593
|
-
|
-
|
|||||||
Death
Benefits
|
-
|
-
|
-
|
-
|
-
|
-
|
415,962
|
|||||||
David
R. Goss:
|
||||||||||||||
Salary
|
-
|
-
|
-
|
864,770
|
864,770
|
-
|
-
|
|||||||
Death
Benefits
|
-
|
-
|
-
|
-
|
-
|
-
|
350,000
|
|||||||
Other
|
256,752
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||
David
M. Shear:
|
||||||||||||||
Salary
|
-
|
-
|
-
|
834,392
|
834,392
|
-
|
-
|
|||||||
Death
Benefits
|
-
|
-
|
-
|
-
|
-
|
-
|
79,567
|
(a)
|
(b)
|
(d)
|
(h)
|
Name
|
Fees
Earned
or
Paid
in
Cash
($)
(1)
|
Option
Awards
($)(2)
|
Total
($)
|
Raymond
B. Ackerman
|
40,000
|
344
|
40,344
|
Robert
C. Brown, M.D.
|
40,000
|
344
|
40,344
|
Charles
A. Burtch
|
40,000
|
344
|
40,344
|
Robert
A. Butkin
|
39,500
|
344
|
39,844
|
Bernard
G. Ille
|
40,000
|
344
|
40,344
|
Donald
W. Munson
|
40,000
|
344
|
40,344
|
Ronald
V. Perry
|
40,000
|
344
|
40,344
|
Horace
G. Rhodes
|
40,000
|
344
|
40,344
|
John
A. Shelley
|
40,000
|
344
|
40,344
|
·
|
Mr.
Ackerman received $25,000 for his services on the Audit Committee,
Nominating and Corporate Governance Committee and Public Relations and
Marketing Committee.
|
·
|
Dr.
Brown received $25,000 for his services on the Benefits and Programs
Committee. This amount does not include amounts paid by the Company to Dr.
Brown for consulting services rendered by him or his affiliated medical
group, which amounts are described under “Certain Relationships and
Related Transactions, and Director Independence - Related Party
Transactions,” beginning on page
29.
|
·
|
Mr.
Burtch received $25,000 for his services on the Audit Committee and
Compensation and Stock Option
Committee.
|
·
|
Mr.
Butkin received $25,000 for his services on the Business Development
Committee.
|
·
|
Mr.
Ille received $25,000 for his services on the Audit Committee,
Compensation and Stock Option Committee, Nominating and Corporate
Governance Committee and Public Relations and Marketing
Committee.
|
·
|
Mr.
Munson received $25,000 for his services on the Business Development
Committee.
|
·
|
Mr.
Perry received $25,000 for his services on the Public Relations and
Marketing Committee.
|
·
|
Mr.
Rhodes received $25,000 for his services on the Audit Committee,
Compensation and Stock Option Committee and Nominating and Corporate
Governance Committee.
|
·
|
Mr.
Shelley received $25,000 for his services on the Audit Committee, Public
Relations and Marketing Committee and Nominating and Corporate Governance
Committee.
|
Equity
Compensation Plan Information
|
||||
Plan
Category
|
N
umber
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 (1)
|
1,145,100
|
$
|
6.81
|
863,000
|
|||
Equity
compensation plans not approved by stockholders (2)
|
142,500
|
$
|
1.48
|
-
|
|||
Total
|
1,287,600
|
$
|
6.22
|
863,300
|
·
|
On
November 29, 2001, we granted to certain of our employees nonqualified
stock options to acquire 102,500 shares of common stock in consideration
of services to us. As of December 31, 2008, 22,500 shares remain
exercisable at an exercise price of $2.73 per
share.
|
·
|
On
July 8, 1999, in consideration of services to us, 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 us. As
of December 31, 2008, 120,000 shares remain
exercisable.
|
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
|
4,750,009
1,020,000
|
(3)
(4)
(5)
|
21.4%
99.9%
|
||
Winslow
Management Company LLC
|
Common
|
1,307,453
|
6.2%
|
Name
of
Beneficial
Owner
|
Title
of Class
|
Amount
of Shares
Beneficially
Owned (1)
|
Percent
of Class+
|
Raymond
B. Ackerman
|
Common
|
16,450
|
(2)
|
*
|
||||
Robert
C. Brown, M.D.
|
Common
|
61,669
|
(3)
|
*
|
||||
Charles
A. Burtch
|
Common
|
1,000
|
(4)
|
*
|
||||
Robert
A. Butkin
|
Common
|
1,000
|
(5)
|
*
|
||||
Barry
H. Golsen
|
Common
Voting
Preferred
|
3,940,718
1,020,000
|
(6)
(6)
|
17.8
99.9
|
%
%
|
|||
Jack
E. Golsen
|
Common
Voting
Preferred
|
4,100,022
1,020,000
|
(7)
(7)
|
18.5
99.9
|
%
%
|
|||
David
R. Goss
|
Common
|
251,594
|
(8)
|
1.2
|
%
|
|||
Bernard
G. Ille
|
Common
|
30,000
|
(9)
|
*
|
||||
Jim
D. Jones
|
Common
|
135,252
|
(10)
|
*
|
||||
Donald
W. Munson
|
Common
|
6,740
|
(11)
|
*
|
||||
Ronald
V. Perry
|
Common
|
-
|
-
|
|||||
Horace
G. Rhodes
|
Common
|
16,500
|
(12)
|
*
|
||||
David
M. Shear
|
Common
|
95,581
|
(13)
|
*
|
||||
Tony
M. Shelby
|
Common
|
220,810
|
(14)
|
1.0
|
%
|
|||
John
A. Shelley
|
Common
|
2,830
|
(15)
|
*
|
||||
Michael
G. Adams
|
Common
|
21,304
|
(16)
|
*
|
||||
Harold
L. Rieker, Jr.
|
Common
|
3,500
|
(17)
|
*
|
||||
Directors
and Executive Officers as a group number
(17
persons)
|
Common
Voting
Preferred
|
5,272,674
1,020,000
|
(19)
|
23.4
99.9
|
%
%
|