| Item 1.01 | Entry into a Material Definitive Agreement |
Letter Agreements
On August 10, 2022, the LSB Industries, Inc., a Delaware corporation (the “Company”), entered into a letter agreement with certain of its stockholders including LSB Funding LLC (“LSB Funding”), SBT Investors LLC (“SBT Investors”) and the other stockholders party thereto (the “Board Representation Letter Agreement”) and a letter agreement with the Issuer and SBT Investors (the “Rights Letter Agreement” and, together with the Board Representation Letter Agreement, the “Letter Agreements”), in each case in connection with a distribution in kind by LSB Funding of certain of its shares of the Company’s common stock, par value $0.10 per share (the “Common Stock”), to its direct and indirect equityholders (the “Distribution”). Pursuant to the Board Representation Letter, LSB Funding transferred to SBT Investors the right to designate nominees to serve on the Company’s board of directors (the “Board”) as set forth under that certain Board Representation and Standstill Agreement, dated as of December 4, 2015, among the Company and the stockholders party thereto, as amended. Pursuant to the Rights Letter Agreement, the Company, LSB Funding and SBT Investors agreed to certain amendments and modifications to the Registration Rights Agreement, dated as of December 4, 2015, by and between the Corporation and LSB Funding, as amended, and the Securities Exchange Agreement, dated as of July 19, 2021, by and between the Corporation and LSB Funding, each as further described in the Rights Letter Agreement.
The description of the Letter Agreements is a summary only and is qualified in its entirety by reference to the text of the applicable Letter Agreement, copies of which are attached as Exhibit 10.1 and Exhibit 10.2 to this Current Report on Form 8-K (this “Form 8-K”).
Underwriting Agreement
On August 10, 2022, the Company entered into an Underwriting Agreement (the “Underwriting Agreement”) by and among the Company, Goldman Sachs & Co. LLC and UBS Securities LLC as representatives of the several underwriters named therein (excluding the Company, the aforementioned together the “Underwriters”) and LSB Funding and SBT Investors (the “Selling Stockholders”), relating to the underwritten offering of 13,500,000 of the Company’s Common Stock (the “Shares”) and the Underwriters’ 30-day option to purchase up to an additional 1,200,000 Shares from the Selling Stockholders, (the “Offering”). All of the Shares in the Offering were sold by the Selling Stockholders. The Underwriters agreed to purchase the Shares from the Selling Stockholders pursuant to the Underwriting Agreement at a price of $12.3175 per share. In addition, pursuant to the Underwriting Agreement, the Company agreed to purchase from the Underwriters 5,500,000 Shares being sold by the Selling Stockholders to the Underwriters, at a price per share equal to the price being paid by the Underwriters to the Selling Stockholders, resulting in an aggregate purchase price of $67,746,250 (the “Share Repurchase”). After giving effect to the Share Repurchase, approximately $17 million of shares of Common Stock will remain available for repurchase under the Company’s previously announced repurchase program. The Company intends to fund the Share Repurchase with cash on hand.
The Offering was made only by means of a prospectus. An automatic shelf registration statement (including a prospectus) relating to the offering of common stock was filed with the Securities and Exchange Commission (the “SEC”) on March 28, 2022 and became effective upon filing (File No. 333-263882) (the “Registration Statement”). A prospectus supplement relating to the Offering was filed with the SEC on August 10, 2022. The closing of the Offering took place on August 15, 2022.
The description of the Underwriting Agreement is a summary only and is qualified in its entirety by reference to the text of the Underwriting Agreement, a copy of which is filed as Exhibit 1.1 to this Form 8-K.
