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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period _________to__________
Commission file number 1-7677
LSB INDUSTRIES, INC.
(Exact name of Registrant as specified in its Charter)
Delaware 73-1015226
(State of Incorporation) (I.R.S. Employer
identification No.)
16 South Pennsylvania Avenue
Oklahoma City, Oklahoma 73107
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(405) 235-4546
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights and
Name of Each Exchange
Title of Each Class On Which Registered
Common Stock, Par Value $.10 Over-the-Counter Bulletin Board
$3.25 Convertible Exchangeable
Class C Preferred Stock, Series 2 Over-the-Counter Bulletin Board
Indicate by check mark whether the Registrant (1) has filed all reports required
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for the shorter period that the Registrant has had to
file the reports), and (2) has been subject to the filing requirements for the
past 90 days. YES X NO .
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. __________.
As of March 31, 2001, the aggregate market value of the 7,486,938 shares of
voting stock of the Registrant held by non-affiliates of the Company equaled
approximately $28,547,695 based on the closing sales price for the Company's
common stock as reported for that date on the Over-the-Counter Bulletin Board.
That amount does not include the 1,462 shares of Convertible Non-Cumulative
Preferred Stock (the "Non-Cumulative Preferred Stock") held by non-affiliates of
the Company. An active trading market does not exist for the shares of
Non-Cumulative Preferred Stock.
As of March 31, 2001, the Registrant had 11,894,619 shares of common stock
outstanding (excluding 3,269,290 shares of common stock held as treasury stock).
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PART III
Item 10. Directors and Executive Officers of the Company
Directors. The Certificate of Incorporation and By-laws of the Company
provide for the division of the Board of Directors into three (3) classes, each
class consisting as nearly as possible of one-third of the whole. The term of
office of one class of directors expires each year, with each class of directors
elected for a term of three (3) years and until the shareholders elect their
qualified successors.
The Company's By-laws provide that the Board of Directors, by
resolution from time to time, may fix the number of directors that shall
constitute the whole Board of Directors. The By-laws presently provide that the
number of directors may consist of not less than three (3) nor more than twelve
(12). The Board of Directors currently has set the number of directors at twelve
(12).
The By-laws of the Company further provide that only persons nominated
by or at the direction of: (i) the Board of Directors of the Company, or (ii)
any stockholder of the Company entitled to vote for the election of the
directors that complies with certain notice procedures, shall be eligible for
election as a director of the Company. Any stockholder desiring to nominate any
person as a director of the Company must give written notice to the Secretary of
the Company at the Company's principal executive office not less than fifty (50)
days prior to the date of the meeting of stockholders to elect directors;
except, if less than sixty (60) days' notice or prior disclosure of the date of
such meeting is given to the stockholders, then written notice by the
stockholder must be received by the Secretary of the Company not later than the
close of business on the tenth (10th) day following the day on which such notice
of the date of the meeting was mailed or such public disclosure was made. In
addition, if the stockholder proposes to nominate any person, the stockholder's
written notice to the Company must provide all information relating to such
person that the stockholder desires to nominate that is required to be disclosed
in solicitation of proxies pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended.
The following table sets forth the name, principal occupation, age,
year in which the individual first became a director, and year in which the
director's term will expire for each nominee for election as a director at the
Company's 2001 Annual Meeting and all other directors whose terms will continue
after the 2001 Annual Meeting. Certain information with respect to the executive
officers of the Company is set forth under Item 4A of Part I hereof.
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Name and First Became
Principal Occupation a Director Term Expires Age
Raymond B. Ackerman(1) 1993 2002 78
Chairman Emeritus of Ackerman
McQueen, Inc.
Gerald J. Gagner(2) 1997 2001 65
President of Dragerton
Investments
Bernard G. Ille(3) 1971 2002 74
Investments
Donald W. Munson(4) 1997 2002 68
Consultant
Tony M. Shelby(5) 1971 2002 59
Senior Vice President of
Finance and Chief
Financial Officer of the
Company
Barry H. Golsen(6) 1981 2003 50
Vice Chairman of the
Board of Directors of
the Company and President
of the Climate Control
Business of the Company
David R. Goss(7) 1971 2003 60
Senior Vice President of
Operations of the Company
Jerome D. Shaffer, M.D.(8) 1969 2003 84
Investments
Robert C. Brown, M.D.(9) 1969 2001 70
President of Northwest
Internal Medicine
Associates, Inc.
Jack E. Golsen(10) 1969 2001 72
President, Chief Executive
Officer and Chairman of
the Board of Directors of
the Company
Horace G. Rhodes(11) 1996 2001 73
President/Managing Partner,
Kerr, Irvine, Rhodes
and Ables
Charles A. Burtch(12) 1999 2001 66
Investments
(1) From 1972 until his retirement in 1992, Mr. Ackerman served as Chairman
of the Board and President of Ackerman, McQueen, Inc., the largest
public relations firm in Oklahoma. Mr. Ackerman currently serves as
Chairman Emeritus of Ackerman, McQueen, Inc. Mr. Ackerman retired as a
Rear Admiral from the United States Naval Reserves. Mr. Ackerman is a
graduate of Oklahoma City University, and in 1996, he was awarded an
honorary doctorate from Oklahoma City University.
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(2) Mr. Gagner, a resident of New Hope, Pennsylvania, served as President,
Chief Executive Officer and director of USPCI, Inc., a New York Stock
Exchange company involved in the waste management industry, from 1984
until 1988, when USPCI was acquired by Union Pacific Corporation. From
1988 to the present, Mr. Gagner has been engaged as a private investor.
Mr. Gagner has served, and is presently serving, as President and a
director of Dragerton Investments, Inc., which developed and sold one
of the world's largest industrial waste landfills, and is presently
general partner of New West Investors, L.P., which has investments
principally in the financial service industry. Mr. Gagner is also a
director of Automation Robotics, A.G., a German corporation. Mr. Gagner
is also a director of the Ziegler Companies, Inc. Mr. Gagner has an
engineering degree from the University of Utah.
(3) Mr. Ille served as President and Chief Executive Officer of First Life
Assurance Company from May 1988, until it was acquired by another
company in March 1994. For more than five (5) years prior to joining
First Life, Mr. Ille served as President of United Founders Life
Insurance Company. Mr. Ille is a director of Landmark Land Company,
Inc., which was parent company of First Life. Mr. Ille is also a
director for Quail Creek Bank, N.A. Mr. Ille is currently a private
investor. He is a graduate of the University of Oklahoma.
(4) Mr. Munson is a resident of England. From January 1988, until his
retirement in August 1992, Mr. Munson served as President and Chief
Operating Officer of Lennox Industries. Prior to his election as
President and Chief Operating Officer of Lennox Industries, Mr. Munson
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 England, 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. Mr. Munson is currently a
consultant and international distributor for the Ducane Company, an
equipment manufacturer, and is serving as a member of the Board of
Directors of Multi Clima SA, a French manufacturer of air conditioning
- heating equipment, which the Company has an option to acquire. Mr.
Munson has degrees in mechanical engineering and business
administration from the University of Minnesota.
(5) Mr. Shelby, a certified public accountant, is Senior Vice President and
Chief Financial Officer of the Company, a position he has held for more
than five (5) years. Prior to becoming Senior Vice President and Chief
Financial Officer of the Company, Mr. Shelby 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, L.L.P. Mr.
Shelby is a graduate of Oklahoma City University.
(6) Mr. Golsen, L.L.B., has served as Vice Chairman of the Board of the
Company since August 1994, and for more than five (5) years has
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been the President of the Company's Climate Control Business. Mr.
Golsen has both his undergraduate and law degrees from the University
of Oklahoma.
(7) Mr. Goss, a certified public accountant, is Senior Vice President -
Operations of the Company and has served in substantially the same
capacity for more than five (5) years. Mr. Goss is a graduate of
Rutgers University.
(8) Dr. Shaffer, a director of the Company since its inception, is
currently a private investor. He practiced medicine for many years
until his retirement in 1987. Dr. Shaffer is a graduate of Penn State
University and received his medical degree from Jefferson Medical
College.
(9) Dr. Brown has practiced medicine for many years and is Vice President
and Treasurer of Plaza Medical Group, P.C. Dr. Brown is a graduate of
Tufts University and received his medical degree from Tufts University.
(10) Mr. Golsen, founder of the Company, is Chairman of the Board and
President of the Company and has served in that capacity since the
inception of the Company in 1969. During 1996, Mr. Golsen was inducted
into the Oklahoma Commerce and Industry Hall of Honor as one of
Oklahoma's leading industrialists. Mr. Golsen has a degree from the
University of New Mexico in Biochemistry.
(11) Mr. Rhodes is the Chairman of the law firm of Kerr, Irvine, Rhodes &
Ables and has served in such or similar capacity and has practiced law
for more than five (5) years. Since 1972, Mr. Rhodes has served as
Executive Vice President and General Counsel for the Association of
Oklahoma Life Insurance Companies and since 1982 has 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.
(12) 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. Mr. Burtch
retired in 1998 and has since been engaged as a private investor. He is
a graduate of Arizona State University.
Family Relationships. Jack E. Golsen is the father of Barry H. Golsen
and the brother-in-law of Robert C. Brown, M.D. Robert C. Brown, M.D.
is the uncle of Barry H. Golsen.
Section 16(a) Beneficial Ownership Reporting Compliance. Based solely
on a review of copies of the Forms 3, 4 and 5 and amendments thereto furnished
to the Company with respect to 2000, or written representations that no such
reports were required to be filed with the Securities and Exchange Commission,
the Company believes that during 2000 all directors and officers of the Company
and beneficial owners of more than ten percent (10%) of any class of equity
securities of the Company registered pursuant to Section 12 of the Exchange Act
filed their required Forms 3, 4, or 5, as required by Section 16(a) of the
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Securities Exchange Act of 1934, as amended, on a timely basis, except Mr. Ille
filed one Form 4 inadvertently late to report two transactions.
Item 11. Executive Compensation.
The following table shows the aggregate cash compensation which the
Company and its subsidiaries paid or accrued to the Chief Executive Officer and
each of the other four (4) most highly-paid executive officers of the Company
(which includes the Vice Chairman of the Board who also serves as President of
the Company's Climate Control Business). The table includes cash distributed for
services rendered during 2000, plus any cash distributed during 2000 for
services rendered in a prior year, less any amount relating to those services
previously included in the cash compensation table for a prior year.
Summary Compensation Table
Long-term
Compen-
sation
Annual Compensation Awards
Securities
Underlying
Name and Salary Bonus Stock
Position Year ($) ($)(1) Options
Jack E. Golsen, 2000 477,400 -- --
Chairman of 1999 477,400 -- 265,000
the Board, 1998 477,400 -- --
President and
Chief Executive Officer
Barry H. Golsen, 2000 226,600 -- --
Vice Chairman 1999 226,600 100,000 155,000
of the Board of 1998 226,600 -- --
Directors and
President of the
Climate Control Business
David R. Goss, 2000 190,500 -- --
Senior Vice 1999 190,500 -- 100,000
President - 1998 190,500 -- --
Operations
Tony M. Shelby, 2000 190,500 -- --
Senior Vice 1999 190,500 -- 100,000
President/Chief 1998 190,500 -- --
Financial Officer
David M. Shear, 2000 165,000 -- --
Vice President/ 1999 165,000 -- 100,000
General Counsel 1998 165,000 -- --
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(1) Bonuses are for services rendered for the prior fiscal year. No
bonuses were paid to the above-named executive officers for 1997, 1998, or 1999
performance except for a compensation adjustment paid in 2000 to Barry H. Golsen
due to the 1999 stand-alone profitability and performance of the Climate Control
Businesses which report to him. No bonuses are expected to be paid to the
above-named executive officers for 2000 performance.
(2) Does not include perquisites and other personal benefits,
securities or property for the named executive officer in any year if the
aggregate amount of such compensation for such year does not exceed the lesser
of $50,000 or 10% of the total of annual salary and bonus reported for the named
executive officer for such year.
Option Grants in 2000. There were no individual grants of stock options
made to any of the named executive officers in the above Summary Compensation
Table during the last fiscal year.
Aggregated Option Exercises in 2000
and Fiscal Year End Option Values.
The following table sets forth information concerning the number and
value of unexercised options held by each of the named executive officers during
the last fiscal year and the year-end value of unexercised options. None of
these executive officers exercised options during the year ended December 31,
2000.
Number of Value
Securities of Unexercised
Underlying In-the-Money
Unexercised Options at
Options at Fiscal Year End
FY End (#)(1) ($) (1)(2)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
Jack E. Golsen 153,000/212,000(3) 60,699/242,794
Barry H. Golsen 136,000/124,000(4) 34,297/137,188
David R. Goss 106,000/80,000(5) 23,740/94,960
Tom M. Shelby 106,000/80,000(5) 23,740/94,960
David M. Shear 97,000/80,000(5) 23,740/94,960
(1) The incentive stock options granted under the Company's stock
option plans become exercisable 20% after one year from date of grant, an
additional 20% after two years, an additional 30% after three years, and the
remaining 30% after four years.
(2) The values are based on the difference between the price of the
Company's Common Stock on the Over-the-Counter Bulletin Board at the close of
trading on December 31, 2000 of $2.437 per share and the exercise price of such
option. The actual value realized by a named
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executive officer on the exercise of these options depends on the market value
of the Company's Common Stock on the date of exercise.
(3) The amounts shown include a non-qualified stock option covering
176,500 shares of Common Stock of which 35,300 shares are currently exercisable.
(4) The amounts shown include a non-qualified stock option covering
55,000 shares of Common Stock of which 11,000 shares are currently exercisable.
(5) The amounts shown include a non-qualified stock option covering
35,000 shares of Common Stock of which 7,000 shares are currently exercisable.
Other Plans. The Board of Directors has adopted an LSB Industries,
Inc., Employee Savings Plan (the "401(k) Plan") for the employees (including
executive officers) of the Company and its subsidiaries, excluding certain (but
not all) employees covered under union agreements. The 401(k) Plan is an
employee contribution plan, and the Company and its subsidiaries make no
contributions to the 401(k) Plan. The amount that an employee may contribute to
the 401(k) Plan equals a certain percentage of the employee's compensation, with
the percentage based on the employee's income and certain other criteria as
required under Section 401(k) of the Internal Revenue Code. The Company or
subsidiary deducts the amounts contributed to the 401(k) Plan from the
employee's compensation each pay period, in accordance with the employee's
instructions, and pays the amount into the 401(k) Plan for the employee's
benefit. The Summary Compensation Table set forth above includes any amount
contributed and deferred during the 1998, 1999, and 2000 fiscal years pursuant
to the 401(k) Plan by the named executive officers of the Company.
The Company has a death benefit plan for certain key employees. Under
the plan, the designated beneficiary of an employee covered by the plan will
receive a monthly benefit for a period of ten (10) years if the employee dies
while in the employment of the Company or a wholly-owned subsidiary of the
Company. The agreement with each employee provides, in addition to being subject
to other terms and conditions set forth in the agreement, that the Company may
terminate the agreement as to any employee at anytime prior to the employee's
death. The Company has purchased life insurance on the life of each employee
covered under the plan to provide, in large part, a source of funds for the
Company's obligations under the Plan. The Company also will fund a portion of
the benefits by investing the proceeds of such insurance policy received by the
Company upon the employee's death. The Company is the owner and sole beneficiary
of the insurance policy, with the proceeds payable to the Company upon the death
of the employee. The following table sets forth the amounts of annual benefits
payable to the designated beneficiary or beneficiaries of the executive officers
named in the Summary Compensation Table set forth above under the
above-described death benefits plan.
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Amount of
Name of Individual Annual Payment
Jack E. Golsen $175,000
Barry H. Golsen $ 30,000
David R. Goss $ 35,000
Tony M. Shelby $ 35,000
David M. Shear $ N/A
In addition to the above-described plans, during 1991 the Company
entered into a non-qualified arrangement with certain key employees of the
Company and its subsidiaries to provide compensation to such individuals in the
event that they are employed by the Company or a subsidiary of the Company at
age 65. Under the plan, the employee will be eligible to receive for the life of
such employee, a designated benefit as set forth in the plan. In addition, if
prior to attaining the age 65 the employee dies while in the employment of the
Company or a subsidiary of the Company, the designated beneficiary of the
employee will receive a monthly benefit for a period of ten (10) years. The
agreement with each employee provides, in addition to being subject to other
terms and conditions set forth in the agreement, that the Company may terminate
the agreement as to any employee at any time prior to the employee's death. The
Company has purchased insurance on the life of each employee covered under the
plan where the Company is the owner and sole beneficiary of the insurance
policy, with the proceeds payable to the Company to provide a source of funds
for the Company's obligations under the plan. The Company may also fund a
portion of the benefits by investing the proceeds of such insurance policies.
Under the terms of the plan, if the employee becomes disabled while in the
employment of the Company or a wholly-owned subsidiary of the Company, the
employee may request the Company to cash-in any life insurance on the life of
such employee purchased to fund the Company's obligations under the plan. Jack
E. Golsen does not participate in the plan. The following table sets forth the
amounts of annual benefits payable to the executive officers named in the
Summary Compensation Table set forth above under such retirement plan.
Amount of
Name of Individual Annual Payment
Barry H. Golsen $17,480
David R. Goss $17,403
Tony M. Shelby $15,605
David M. Shear $17,822
Compensation of Directors. In 2000, the Company compensated eight non-employee
directors in the amount of $4,500 each for their services. The non-employee
directors of the Company also received $500 for every meeting of the Board of
Directors attended during 2000. Messrs. Rhodes, Ille, Brown, and Shaffer,
received an additional $20,000 each for their services on the Audit Committee in
2000. Mr. Burtch received an additional $36,000 for his services on the
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Audit Committee during 2000 and part of 1999. During 2000, Mr. Munson was paid
approximately $37,300 for consulting services in connection with developing the
Company's European business.
In September, 1993, the Company adopted the 1993 Non-Employee Director
Stock Option Plan (the "Outside Director Plan"). The Outside Director Plan
authorizes the grant of non-qualified stock options to each member of the
Company's Board of Directors who is not an officer or employee of the Company or
its subsidiaries. The maximum shares for which options may be issued under the
Outside Director Plan will be 150,000 shares (subject to adjustment as provided
in the Outside Director Plan). The Company shall automatically grant to each
outside director an option to acquire 5,000 shares of the Company's Common Stock
on April 30 following the end of each of the Company's fiscal years in which he
Company realizes net income of $9.2 million or more for such fiscal year. The
exercise price for an option granted under the Outside Director Plan shall be
the fair market value of the shares of Common Stock at the time the option is
granted. Each option granted under the Outside Director Plan, to the extent not
exercised, shall terminate upon the earlier of the termination of the outside
director as a member of the Company's Board of Directors or the fifth
anniversary of the date such option was granted. The Company did not grant
options under the Outside Director Plan in April, 1998, 1999, and 2000.
Employment Contracts and Termination of Employment and Change in
Control Arrangements.
(a) Termination of Employment and Change in Control Agreements. The Company
has entered into severance agreements with Jack E. Golsen, Barry H. Golsen, Tony
M. Shelby, David R. Goss, David M. Shear, and certain other officers of the
Company and subsidiaries of the Company.
Each severance agreement provides (among other things) that if, within
twenty-four (24) months after the occurrence of a change in control (as defined)
of the Company, the Company terminates the officer's employment other than for
cause (as defined), or the officer terminates his employment for good reason (as
defined), the Company must pay the officer an amount equal to 2.9 times the
officer's base amount (as defined). The phrase "base amount" means the average
annual gross compensation paid by the Company to the officer and includable in
the officer's gross income during the period consisting of the most recent five
(5) year period immediately preceding the change in control. If the officer has
been employed by the Company for less than 5 years, the base amount is
calculated with respect to the most recent number of taxable years ending before
the change in control that the officer worked for the Company.
The severance agreements provide that a "change in control" means a
change in control of the Company of a nature that would require the filing of a
Form 8-K with the Securities and Exchange Commission and, in any event, would
mean when: (1) any individual, firm, corporation, entity, or group (as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, as mended) becomes
the beneficial owner, directly or indirectly, of thirty percent (30%) or more of
the combined voting
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power of the Company's outstanding voting securities having the right to vote
for the election of directors, except acquisitions by: (a) any person, firm,
corporation, entity, or group which, as of the date of the severance agreement,
has that ownership, or (b) 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
eighty percent (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; (2) 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 (3) the
sale by the Company of all or substantially all of its assets.
Except for the severance agreement with Jack E. Golsen, the termination
of an officer's employment with the Company "for cause" means termination
because of: (a) the mental or physical disability from performing the officer's
duties for a period of one hundred twenty (120) consecutive days or one hundred
eighty days (even though not consecutive) within a three hundred sixty (360) day
period; (b) the conviction of a felony; (c) the embezzlement by the officer of
Company assets resulting in substantial personal enrichment of the officer at
the expense of the Company; or (d) 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 sixty (60) day period prior to the change in control. The definition
of "Cause" contained in the severance agreement with Jack E. Golsen means
termination because of: (a) the conviction of Mr. Golsen of a felony involving
moral turpitude after all appeals have been completed; or (b) 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 (i) 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 (ii) 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 termination of an officer's employment with the Company for "good
reason" means termination because of (a) the assignment to the officer of duties
inconsistent with the officer's position, authority, duties, or responsibilities
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during the sixty (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; (b) the relocation of the
officer; (c) any purported termination by the Company of the officer's
employment with the Company otherwise than as permitted by the severance
agreement; or (d) 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.
Except for the severance agreement with Jack E. Golsen, each severance
agreement runs until the earlier of: (a) three years after the date of the
severance agreement, or (b) the officer's normal retirement date from the
Company; however, beginning on the first anniversary of the severance agreement
and on each annual anniversary thereafter, the term of the severance agreement
automatically extends for an additional one-year period, unless the Company
gives notice otherwise at least sixty (60) days prior to the anniversary date.
The severance agreement with Jack E. Golsen is effective for a period of three
(3) years from the date of the severance agreement; except that, commencing on
the date one (1) year after the date of such severance agreement and on each
annual anniversary thereafter, the term of such severance agreement shall be
automatically extended so as to terminate three (3) years from such renewal
date, unless the Company gives notices otherwise at least one (1) year prior to
the renewal date.
(b) Employment Agreement. In March 1996, the Company entered into an
employment agreement with Jack E. Golsen. The employment agreement requires the
Company to employ Jack E. Golsen as an executive officer of the Company for an
initial term of three (3) years and provides for two (2) automatic renewals of
three (3) years each unless terminated by either party by the giving of written
notice at least one (1) year prior to the end of the initial or first renewal
period, whichever is applicable. Under the terms of such employment agreement,
Mr. Golsen shall be paid (i) an annual base salary at his 1995 base rate, as
adjusted from time to time by the Compensation Committee, but such shall never
be adjusted to an amount less than Mr. Golsen's 1995 base salary, (ii) an annual
bonus in an amount as determined by the Compensation Committee, and (iii)
receive from the Company certain other fringe benefits. The employment agreement
provides that Mr. Golsen's employment may not be terminated, except (i) upon
conviction of a felony involving moral turpitude after all appeals have been
exhausted, (ii) 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, and (iii) Mr. Golsen's death; provided,
13
however, no such termination under (i) or (ii) above may occur unless and until
the Company has delivered to Mr. Golsen a resolution duly adopted by an
affirmative vote of three-fourths of the entire membership of the Board of
Directors at a meeting called for such purpose after reasonable notice given to
Mr. Golsen finding, in good faith, that Mr. Golsen violated (i) or (ii) above.
If Mr. Golsen's employment is terminated in breach of this Agreement, then he
shall, in addition to his other rights and remedies, receive and the Company
shall pay to Mr. Golsen (i) in a lump sum 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 (a) the number of years remaining under the
employment agreement or (b) four (4) if such termination occurs during the last
twelve (12) months of the initial period or the first renewal period, and (ii)
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, or, if terminated at any time
during the last twelve (12) months of the initial period or first renewal
period, then during the remainder of the term and the next renewal period.
If there is a change in control (as defined in the severance agreement
between Mr. Golsen and the Company) and within twenty-four (24) months after
such change in control Mr. Golsen is terminated, other than for Cause (as
defined in the severance agreement), then in such event, the severance agreement
between Mr. Golsen and the Company shall be controlling.
In the event Mr. Golsen becomes disabled and is not able to perform his
duties under the employment agreement as a result thereof for a period of twelve
(12) consecutive months within any two (2) year period, the Company shall pay
Mr. Golsen his full salary for the remainder of the term of the employment
agreement and thereafter sixty percent (60%) of such salary until Mr. Golsen's
death.
Compensation Committee Interlocks and Insider Participation. The
Company's Executive Salary Review Committee has the authority to set the
compensation of all officers of the Company. This Committee generally considers
and approves the recommendations of the President. The members of the Executive
Salary Review Committee are the following non-employee directors: Robert C.
Brown, M.D., Jerome D. Shaffer, M.D., and Bernard G. Ille. During 2000, the
Executive Salary Review Committee had two meetings.
See "Compensation of Directors" for information concerning compensation
paid to non-employee directors of the Company during 2000 for services as a
director to the Company, and Item 13 "Certain Relationships and Related
Transactions" for information concerning compensation paid to an affiliate of
Mr. Brown.
14
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Security Ownership of Certain Beneficial Owners. The following table
shows the total number and percentage of the outstanding shares of the Company's
voting Common Stock and voting Preferred Stock beneficially owned as of the
close of business on April 15, 2001, with respect to each person (including any
"group" as used in Section 13(d)(3) of the Securities Act of 1934, as amended)
that the Company knows to have beneficial ownership of more than five percent
(5%) of the Company's voting Common Stock and voting Preferred Stock. A person
is deemed to be the beneficial owner of voting shares of Common Stock of the
Company which he or she could acquire within sixty (60) days of April 27, 2001.
Because of the requirements of the Securities and Exchange Commission
as to the method of determining the amount of shares an individual or entity may
beneficially own, the amounts shown below for an individual or entity may
include shares also considered beneficially owned by others.
Amounts
Name and Address Title of Shares Percent
of of Beneficially of
Beneficial Owner Class Owned(1) Class
Jack E. Golsen and Common 4,417,123(3)(5)(6) 34.0%
members of his family(2) Voting Preferred 20,000(4)(6) 92.7%
Kent C. McCarthy Common 2,363,081(7) 17.7%
Riverside Capital
Advisors, Inc. Common 1,467,397(8) 11.0%
James W. Sight Common 680,540(9) 5.7%
Paul J. Denby Common 648,480(10) 5.4%
- ----------
(1) The Company based the information, with respect to beneficial
ownership, on information furnished by the above-named individuals or entities
or contained in filings made with the Securities and Exchange Commission or the
Company's records.
(2) Includes Jack E. Golsen and the following members of his family:
wife, Sylvia H. Golsen; son, Barry H. Golsen (a Director, Vice Chairman of the
Board of Directors, and President of the Climate Control Business of the
Company); son, Steven J. Golsen (Executive officer of several subsidiaries of
the Company); and daughter, Linda F. Rappaport. The address of Jack E. Golsen,
Sylvia H. Golsen, Barry H. Golsen, and Linda F. Rappaport is 16 South
Pennsylvania Avenue, Oklahoma City, Oklahoma 73107; and Steven J. Golsen's
address is 7300 SW 44th Street, Oklahoma City, Oklahoma 73179.
(3) Includes (a) the following shares over which Jack E. Golsen ("J.
Golsen") has the sole voting and dispositive
15
power: (i) 40,000 shares that he owns of record, (ii) 4,000 shares that he has
the right to acquire upon conversion of a promissory note, (iii) 133,333 shares
that he has the right to acquire upon the conversion of 4,000 shares of the
Company's Series B 12% Cumulative Convertible Preferred Stock (the "Series B
Preferred") owned of record by a trust, of which he is the sole trustee, (iv)
10,000 shares owned of record by the MG Trust, of which he is the sole trustee,
(v) 69,028 shares owned of record by a trust, of which he is the sole trustee,
and (vi) 153,000 shares that he has the right to acquire within the next sixty
(60) days under the Company's stock option plans; (b) 643,290 shares owned of
record by Sylvia H. Golsen, and 394,415 shares owned of record by a trust, of
which Sylvia H. Golsen is the sole trustee, over which she and her husband, J.
Golsen share voting and dispositive power; (c) 246,616 shares over which Barry
H. Golsen ("B. Golsen") has the sole voting and dispositive power, 533 shares
owned of record by B. Golsen's wife, over which he shares the voting and
dispositive power, and 136,000 shares that he has the right to acquire within
the next sixty (60) days under the Company's stock option plans; (d) 206,987
shares over which Steven J. Golsen ("S. Golsen") has the sole voting and
dispositive power and 105,000 shares that he has the right to acquire within the
next sixty (60) days under the Company's stock option plans; (e) 222,460 shares
held in trust for the grandchildren of J. Golsen and Sylvia H. Golsen of which
B. Golsen, S. Golsen and Linda F. Rappaport ("L. Rappaport") jointly or
individually are trustees; (f) 82,552 shares owned of record by L. Rappaport,
over which L. Rappaport has the sole voting and dispositive power; (g) 1,336,799
shares owned of record by SBL Corporation ("SBL"), 39,177 shares that SBL has
the right to acquire upon conversion of 9,050 shares of the Company's non-voting
$3.25 Convertible Exchangeable Class C Preferred Stock, Series 2 (the "Series 2
Preferred"), and 400,000 shares that SBL has the right to acquire upon
conversion of 12,000 shares of Series B Preferred owned of record by SBL, and
(h) 60,600 shares owned of record by Golsen Petroleum Corporation ("GPC"), which
is a wholly-owned subsidiary of SBL, and 133,333 shares that GPC has the right
to acquire upon conversion of 4,000 shares of Series B Preferred owned of record
by GPC. SBL is wholly-owned by Sylvia H. Golsen (40% owner), B. Golsen (20%
owner), S. Golsen (20% owner), and L. Rappaport (20% owner) and, as a result,
SBL, J. Golsen, Sylvia H. Golsen, B. Golsen, S. Golsen, and L. Rappaport share
the voting and dispositive power of the shares beneficially owned by SBL. SBL's
address is 16 South Pennsylvania Avenue, Oklahoma City, Oklahoma 73107.
(4) Includes: (a) 4,000 shares of Series B Preferred owned of record by
a trust, of which J. Golsen is the sole trustee, over which he has the sole
voting and dispositive power; (b) 12,000 shares of Series B Preferred owned of
record by SBL; and (c) 4,000 shares owned of record by SBL's wholly-owned
subsidiary, GPC, over which SBL, J. Golsen, Sylvia H. Golsen, B. Golsen, S.
Golsen, and L. Rappaport share the voting and dispositive power.
(5) Does not include 124,350 shares of Common Stock that L. Rappaport's
husband owns of record and 185,000 shares which he has the right to acquire
within the next sixty (60) days
16
under the Company's stock option plans, all of which L. Rappaport disclaims
beneficial ownership. Does not include 234,520 shares of Common Stock owned of
record by certain trusts for the benefit of B. Golsen, S. Golsen, and L.
Rappaport over which B. Golsen, S. Golsen and L. Rappaport have no voting or
dispositive power. Heidi Brown Shear, an officer of the Company and the niece of
J. Golsen, is the Trustee of each of these trusts.
(6) J. Golsen disclaims beneficial ownership of the shares that B.
Golsen, S. Golsen, and L. Rappaport each have the sole voting and investment
power over as noted in footnote (3) above. B. Golsen, S. Golsen, and L.
Rappaport disclaim beneficial ownership of the shares that J. Golsen has the
sole voting and investment power over as noted in footnotes (3) and (4) and the
shares owned of record by Sylvia H. Golsen. Sylvia H. Golsen disclaims
beneficial ownership of the shares that J. Golsen has the sole voting and
dispositive power over as noted in footnotes (3) and (4) above.
(7) Kent C. McCarthy, manager of Jayhawk Capital Management, L.L.C.
("Jayhawk"), a Delaware limited liability company and investment advisor, is
deemed to beneficially own 2,363,081 shares of the Company's Common Stock (which
includes 1,451,081 shares of Common Stock receivable upon conversion of 335,200
shares of Series 2 Preferred). This number of shares includes the shares Mr.
McCarthy personally owns, as well as the shares he controls as manager of
Jayhawk. As manager of Jayhawk, Mr. McCarthy has sole voting and dispositive
power over the Common Stock beneficially owned by Jayhawk. Jayhawk is deemed to
have beneficial ownership of 1,994,116 shares of the Company's Common Stock
(which includes 1,083,116 shares of Common Stock receivable upon conversion of
250,200 shares of Series 2 Preferred), all of which shares are held in
portfolios of Jayhawk Institutional Partners, L.P., ("Jayhawk Institutional") a
Delaware limited partnership (1,344,766 shares of Common Stock including 433,766
shares of Common Stock receivable upon conversion of 100,200 shares of Series 2
Preferred) and Jayhawk Investments, L.P., ("Jayhawk Investments") a Delaware
limited partnership (649,350 shares of Common Stock receivable upon conversion
of 150,000 shares of Series 2 Preferred). Jayhawk is the general partner of
Jayhawk Institutional and Jayhawk Investments and, as such, has sole voting and
dispositive power over these shares. Mr. McCarthy disclaims beneficial ownership
of all such shares other than his personal holdings. Mr. McCarthy's address is
8201 Mission Road, Suite 110, Prairie Village, Kansas 66208.
(8) Riverside Capital Advisors, Inc. ("Riverside") advised the Company
that it owns 341,255 shares of Series 2 Preferred that is convertible into
1,467,397 shares of Common Stock. Riverside further advised the Company that it
has voting and dispositive power over such shares as a result of Riverside
having full discretionary investment authority over customers' accounts to which
it provides investment services. The address of Riverside is 1650 Southeast 17th
Street Causeway, Fort Lauderdale, Florida 33316.
(9) James W. Sight has sole voting and dispositive power over 680,540
shares of Common Stock (which includes 145,485 shares of Common
17
Stock receivable upon conversion of 33,677 shares of Series 2 Preferred). Mr.
Sight's address is 8500 College Boulevard, Overland Park, Kansas 66210.
(10) Paul J. Denby advised the Company that he has voting and
dispositive power over 648,480 shares of Common Stock (which includes 103,680
shares of Common Stock receivable upon conversion of 24,000 shares of Series 2
Preferred). This number of shares includes 20,184 shares beneficially owned by
Mr. Denby's spouse over which Mr. Denby shares voting and dispositive power. Mr.
Denby's address is 4613 Redwood Court, Irving, Texas 75038.
Security Ownership of Management. The following table sets forth
information obtained from the directors and nominees to be elected as a director
of the Company and the directors, nominees and executive officers of the Company
as a group as to their beneficial ownership of the Company's voting Common Stock
and voting Preferred Stock as of April 15, 2001.
Because of the requirements of the Securities and Exchange Commission
as to the method of determining the amount of shares an individual or entity may
own beneficially, the amount shown below for an individual may include shares
also considered beneficially owned by others. Any shares of stock which a person
does not own, but which he or she has the right to acquire within sixty (60)
days of April 27, 2000, are deemed to be outstanding for the purpose of
computing the percentage of outstanding stock of the class owned by such person
but are not deemed to be outstanding for the purpose of computing the percentage
of the class owned by any other person.
Amounts of
Shares
Name of Title of Beneficially Percent of
Beneficial Owner Class Owned Class
Raymond B. Ackerman Common 46,000(2) *
Robert C. Brown, M.D. Common 248,329(3) 2.1%
Charles A. Burtch Common 15,000(4) *
Gerald J. Gagner Common 33,000(5) *
Barry H. Golsen Common 2,575,518(6) 20.4%
Voting Preferred 16,000(6) 74.2%
Jack E. Golsen Common 3,416,975(7) 26.8%
Voting Preferred 20,000(7) 92.7%
David R. Goss Common 294,625(8) 2.5%
Bernard G. Ille Common 100,000(9) *
Donald W. Munson Common 31,432(10) *
Horace G. Rhodes Common 35,000(11) *
Jerome D. Shaffer, M.D. Common 144,363(12) 1.2%
Tony M. Shelby Common 305,879(13) 2.5%
Directors and Common 5,566,389(14) 40.9%
Executive Officers Voting Preferred 20,000 92.7%
as a group number
(14 persons)
* Less than 1%.
18
(1) The Company based the information, with respect to beneficial
ownership, on information furnished by each director or officer, contained in
filings made with the Securities and Exchange Commission, or contained in the
Company's records.
(2) This amount includes the following shares over which Mr. Ackerman
shares voting and dispositive power: (i) 2,000 shares held by Mr. Ackerman's
trust, and (ii) 4,000 shares held by the trust of Mr. Ackerman's wife. The
remaining 40,000 shares of Common Stock included herein are shares that Mr.
Ackerman may acquire pursuant to currently exercisable non-qualified stock
options granted to him by the Company.
(3) The amount shown includes 40,000 shares of Common Stock that Dr.
Brown may acquire pursuant to currently exercisable non-qualified stock options
granted to him by the Company. The shares, with respect to which Dr. Brown
shares the voting and dispositive power, consists of 122,516 shares owned by Dr.
Brown's wife, 15,000 shares held jointly by Dr. Brown and his wife, 50,727
shares owned by Robert C. Brown, M.D., Inc., a corporation wholly-owned by Dr.
Brown, and 20,086 shares held by the Robert C. Brown M.D., Inc. Employee Profit
Sharing Plan, of which Dr. Brown serves as the trustee. The amount shown does
not include 50,380 shares owned directly, or through trusts, by the children of
Dr. Brown, all of which Dr. Brown disclaims beneficial ownership.
(4) Mr. Burtch has sole voting and dispositive power over these shares,
which may be acquired by Mr. Burtch pursuant to currently exercisable
non-qualified stock options granted to him by the Company.
(5) Mr. Gagner has sole voting and dispositive power over these shares,
which include 30,000 shares that may be acquired by Mr. Gagner pursuant to
currently exercisable non-qualified stock options granted to him by the Company.
(6) See footnotes (3), (4), and (6) of the table under "Security
Ownership of Certain Beneficial Owners" of this item for a description of the
amount and nature of the shares beneficially owned by B. Golsen, including
shares he has the right to acquire within sixty (60) days.
19
(7) See footnotes (3), (4), and (6) of the table under "Security
Ownership of Certain Beneficial Owners" of this item for a description of the
amount and nature of the shares beneficially owned by J. Golsen, including the
shares he has the right to acquire within sixty (60) days.
(8) The amount shown includes 113,000 shares that Mr. Goss has the
right to acquire within sixty (60) days pursuant to options granted under the
Company's stock option plans. Mr. Goss has the sole voting and dispositive power
over these shares.
(9) The amount includes (i) 40,000 shares that Mr. Ille may purchase
pursuant to currently exercisable non-qualified stock options, over which Mr.
Ille has the sole voting and dispositive power, and (ii) 50,000 shares owned of
record by Mr. Ille's wife.
(10) This amount includes (i) 432 shares of Common Stock that Mr.
Munson has the right to acquire upon conversion of 100 shares of non-voting
Series 2 Preferred that he beneficially owns, and (ii) 30,000 shares that Mr.
Munson may purchase pursuant to currently exercisable non-qualified stock
options, over which Mr. Munson has the sole voting and dispositive power.
(11) Mr. Rhodes has sole voting and dispositive power over these
shares, which include 30,000 shares that may be acquired by Mr. Rhodes pursuant
to currently exercisable non-qualified stock options granted to him by the
Company.
(12) Dr. Shaffer has the sole voting and dispositive power over these
shares, which include 40,000 shares that Dr. Shaffer may purchase pursuant to
currently exercisable non-qualified stock options and 4,329 shares that Dr.
Shaffer has the right to acquire upon conversion of 1,000 shares of Series 2
Preferred owned by Dr. Shaffer. This amount also includes 10,000 shares owned by
Dr. Shaffer's wife.
(13) Mr. Shelby has the sole voting and dispositive power over these
shares, which include 113,000 shares that Mr. Shelby has the right to acquire
within sixty (60) days pursuant to options granted under the Company's stock
option plans and 15,151 shares that Mr. Shelby has the right to acquire upon
conversion of 3,500 shares of Series 2 Preferred owned by Mr. Shelby.
(14) The amount shown includes 976,000 shares of Common Stock that
executive officers, directors, or entities controlled by executive officers and
directors of the Company have the right to acquire within sixty (60) days.
Possible Change in Control. A subsidiary of the Company and the family of Jack
E. Golsen and entities controlled by them have pledged certain shares of the
Company's Common Stock to a lender as described under Item 13 "Certain
Relationships and Related Transactions" contained in this report. If the shares
of Common Stock pledged to the lender are foreclosed on, and assuming the
Company does not issue any additional
20
shares of Common Stock and none of the Company's outstanding Preferred Stock is
converted, the percentage of outstanding shares of Common Stock held by the
lender would be approximately 17% of the then outstanding shares of Common Stock
and may, at a subsequent date, result in a change in control of the Company.
Item 13. Certain Relationships and Related Transactions.
A subsidiary of the Company, Hercules Energy Mfg. Corporation
("Hercules"), leased land and a building in Oklahoma City, Oklahoma from Mac
Venture, Ltd. ("Mac Venture"), a limited partnership. GPC (a wholly owned
subsidiary of SBL) serves as the general partner of Mac Venture. The limited
partners of Mac Venture include GPC and the three children of Jack E. Golsen.
See "Security Ownership of Certain Beneficial Owners" and "Security Ownership of
Management" above for a discussion of the stock ownership of SBL. The warehouse
and shop space leased by Hercules from Mac Venture consists of a total of 30,000
square feet. Hercules leased the property from Mac Venture for $3,750 per month
under a month-to-month triple net lease extension which began as of January 1,
2000.
Northwest Internal Medicine Associates ("Northwest"), a division of
Plaza Medical Group., P.C., has an agreement with the Company to perform medical
examinations of the management and supervisory personnel of the Company and its
subsidiaries. Under such agreement, Northwest is paid $2,000 a month to perform
all such examinations. Dr. Robert C. Brown (a director of the Company) is Vice
President and Treasurer of Plaza Medical Group., P.C.
In 1983, LSB Chemical Corp. ("LSB Chemical"), a subsidiary of the
Company, acquired all of the outstanding stock of El Dorado Chemical Company
("EDC") from its then four stockholders ("Ex-Stockholders"). A substantial
portion of the purchase price consisted of an earnout based primarily on the
annual after-tax earnings of EDC for a ten-year period. During 1989, two of the
Ex-Stockholders received LSB Chemical promissory notes for a portion of their
earnout, in lieu of cash, totaling approximately $896,000, payable $496,000 in
January 1990, and $400,000 in May, 1994. LSB Chemical agreed to a buyout of the
balance of the earnout from the four Ex-Stockholders for an aggregate purchase
amount of $1,231,000. LSB Chemical purchased for cash the earnout from two of
the Ex-Stockholders and issued multi-year promissory notes totaling $676,000 to
the other two Ex- Stockholders. Jack E. Golsen guaranteed LSB Chemical's payment
obligation under the promissory notes. The unpaid balance of these notes at
March 31, 2001, was $400,000.
On October 17, 1997, Prime Financial Corporation ("Prime"), a
subsidiary of the Company, borrowed from SBL Corporation, a corporation wholly
owned by the spouse and children of Jack E. Golsen, Chairman of the Board and
President of the Company, the principal amount of $3,000,000 (the "Prime Loan")
on an unsecured basis and payable on demand, with interest payable monthly in
arrears at a fixed interest rate of 10.75% per annum. The purpose of
21
the loan was to assist the Company by providing additional liquidity. The
Company has guaranteed the Prime Loan. In February 2000, the Company borrowed
approximately $500,000 under its key man life insurance policies, and used such
proceeds to reduce the principal amount due SBL. During all of 2000, $700,000 in
principal and $221,000 in interest was paid on this Prime Loan, and as of March
31, 2000, the unpaid principal balance on the Prime Loan was $1,750,000. In
April 2000, at the request of Prime and the Company, SBL agreed to modify the
demand note to make such a term note with a maturity date no earlier than April
1, 2001, except under limited circumstances. In April 2001, this term note was
amended to require repayment of $300,000 in 2001 and $1,450,000 in 2002.
In order to make the Prime Loan to Prime, SBL and certain of its affiliates
borrowed the $3,000,000 from a bank (collectively "SBL Borrowings"), and as part
of the collateral pledged by SBL to the bank in connection with such loan, SBL
pledged, among other things, its note from Prime. In order to obtain SBL's
agreement as provided above, and for other reasons, effective April 21, 2000, a
subsidiary of the Company guaranteed on a limited basis the obligations of SBL
and its affiliates relating to the unpaid principal amount due to the bank in
connection with the SBL Borrowings, and in order to secure its obligations under
the guarantees pledged to the bank 1,973,461 shares of the Company's Common
Stock that it holds as treasury stock. Under the limited guaranty, the Company's
subsidiary's liability is limited to the value, from time to time, of the Common
Stock of the Company pledged to secure its obligations under its guarantees to
the bank relating to the SBL Borrowings. As of March 31, 2001, the outstanding
principal balance due to the bank from SBL as a result of such loan was
$1,800,000.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) FINANCIAL STATEMENTS
The following consolidated financial statements of the Company appear
immediately following this Part IV:*
PAGES
-----
Report of Independent Auditors F-1
Consolidated Balance Sheets at December 31, 2000
and 1999 F-2 to F-3
Consolidated Statements of Operations for each of
the three years in the period ended December 31,
2000 F-4
Consolidated Statements of Stockholders' Equity
for each of the three years in the period ended
December 31, 2000 F-5 to F-6
Consolidated Statements of Cash Flows for
each of the three years in the period
ended December 31, 2000 F-7 to F-8
Notes to Consolidated Financial Statements F-9 to F-46
Quarterly Financial Data (Unaudited) F-47 to F-48
22
(a)(2) FINANCIAL STATEMENT SCHEDULE
The Company has included the following schedule in this report:
II - Valuation and Qualifying Accounts F-49 to F-50
* These financial statements are included in the original Form 10-K for the year
ended December 31, 2000, filed with the Securities and Exchange Commission on
April 17, 2001.
The Company has omitted all other schedules because the conditions requiring
their filing do not exist or because the required information appears in the
Company's Consolidated Financial Statements, including the notes to those
statements.
(a)(3) EXHIBITS
2.1. Stock Purchase Agreement and Stock Pledge Agreement between Dr. Hauri AG, a
Swiss Corporation, and LSB Chemical Corp., which the Company hereby incorporates
by reference from Exhibit 2.2 to the Company's Form 10-K for fiscal year ended
December 31, 1994.
2.2. Asset Purchase and Sale Agreement, dated May 4, 2000 L&S Automotive
Products Co., L&S Bearing So., LSB Extrusion Co., Rotex Corporation and
DriveLine Technologies, Inc., which is incorporated from Exhibit 2.2 to the
Company's Amendment No. 2 to the 1999 Form 10-K. This agreement includes certain
exhibits and schedules that are not included with this exhibit, and will be
provided upon request by the Commission.
3.1. Restated Certificate of Incorporation, the Certificate of Designation dated
February 17, 1989, and certificate of Elimination dated April 30, 1993, which
the Company hereby incorporates by reference from Exhibit 4.1 to the Company's
Registration Statement, No. 33-61640; Certificate of Designation for the
Company's $3.25 Convertible Exchangeable Class C Preferred Stock, Series 2,
which the Company hereby incorporates by reference from Exhibit 4.6 to the
Company's Registration Statement, No. 33-61640.
3.2. 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.
4.1. Specimen Certificate for the Company's Non-cumulative Preferred Stock,
having a par value of $100 per share, which the Company hereby incorporates by
reference from Exhibit 4.1 to the Company's Form 10-Q for the quarter ended June
30, 1983.
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 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.
4.5. 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.
4.6. Indenture, dated as of November 26, 1997, by and among ClimaChem, Inc., the
Subsidiary Guarantors
23
and Bank One, NA, as trustee, which the Company hereby incorporates by reference
from Exhibit 4.1 to the Company's Form 8-K, dated November 26, 1997.
4.7. Form 10 3/4% Series B Senior Notes due 2007 which the Company hereby
incorporates by reference from Exhibit 4.3 to the ClimaChem Registration
Statement, No. 333-44905.
4.8. First Supplemental Indenture, dated February 8, 1999, by and among
ClimaChem, Inc., the Guarantors, and Bank One N.A., which the Company hereby
incorporates by reference from Exhibit 4.19 to the Company's Form 10-K for the
year ended December 31, 1998.
4.9. Second Amended and Restated Loan and Security Agreement dated May 10, 1999,
by and between Bank of America National Trust and Savings Association and LSB
Industries, Inc., Summit Machine Tool Manufacturing Corp., and Morey Machinery
Manufacturing Corporation, 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, 1999.
10.1. Form of Death Benefit Plan Agreement between the Company and the employees
covered under the plan, which the Company hereby incorporates by reference from
Exhibit 10(c)(1) to the Company's Form 10-K for the year ended December 31,
1980.
10.2. The Company's 1981 Incentive Stock Option Plan, as amended, and 1986
Incentive Stock Option Plan, which the Company hereby incorporates by reference
from Exhibits 10.1 and 10.2 to the Company's Registration Statement No. 33-8302.
10.3. Form of Incentive Stock Option Agreement between the Company and employees
as to the Company's 1981 Incentive Stock Option Plan, which the Company hereby
incorporates by reference from Exhibit 10.10 to the Company's Form 10-K for the
fiscal year ended December 31, 1984.
10.4. Form of Incentive Stock Option Agreement between the Company and employees
as to the Company's 1986 Incentive Stock Option Plan, which the Company hereby
incorporates by reference from Exhibit 10.6 to the Company's Registration
Statement No. 33-9848.
10.5. The 1987 Amendments to the Company's 1981 Incentive Stock Option Plan and
1986 Incentive Stock Option Plan, which the Company hereby incorporates by
reference from Exhibit 10.7 to the Company's Form 10-K for the fiscal year ended
December 31, 1986.
10.6. The Company's 1993 Stock Option and Incentive Plan which the Company
hereby incorporates by reference from Exhibit 10.6 to the Company's Form 10-K
for the fiscal year ended December 31, 1993.
10.7. The Company's 1993 Non-employee Director Stock Option Plan which the
Company hereby incorporates by reference from Exhibit 10.7 to the Company's Form
10-K for the fiscal year ended December 31, 1993.
10.8. Lease Agreement, dated March 26, 1982, between Mac Venture, Ltd. and
Hercules Energy Mfg. Corporation, which the Company hereby incorporates by
reference from Exhibit 10.32 to the Company's Form 10-K for the fiscal year
ended December 31, 1981.
10.9. 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.
10.10. Lease Agreement dated November 12, 1987, between Climate Master, Inc. and
West Point Company and amendments thereto, which the Company hereby incorporates
by reference from Exhibits 10.32, 10.36, and 10.37, to the Company's Form 10-K
for fiscal year ended December 31, 1988.
24
10.11. Severance Agreement, dated January 17, 1989, between the Company and Jack
E. Golsen, which the Company hereby incorporates by reference from Exhibit 10.48
to the Company's Form 10-K for fiscal year ended December 31, 1988. 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.
10.12. Third Amendment to Lease Agreement, dated as of December 31, 1987,
between Mac Venture, Ltd. and Hercules Energy Mfg. Corporation, which the
Company hereby incorporates by reference from Exhibit 10.49 to the Company's
Form 10-K for fiscal year ended December 31, 1988.
10.13. 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.
10.14. Non-Qualified Stock Option Agreement, dated June 1, 1992, between the
Company and Robert C. Brown, M.D. which the Company hereby incorporates by
reference from Exhibit 10.38 to the Company's Form 10-K for fiscal year ended
December 31, 1992. The Company entered into substantially identical agreements
with Bernard G. Ille, Jerome D. Shaffer and C.L. Thurman, and the Company will
provide copies thereof to the Commission upon request.
10.15. Loan and Security Agreement (DSN Plant) dated October 31, 1994 between
DSN Corporation and The CIT Group 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, 1994.
10.16. Loan and Security Agreement (Mixed Acid Plant) dated April 5, 1995
between DSN Corporation and The CIT Group, which the Company hereby incorporates
by reference from Exhibit 10.25 to the Company's Form 10-K for the fiscal year
ended December 31, 1994.
10.17. First Amendment to Loan and Security Agreement (DSN Plant), dated June 1,
1995, between DSN Corporation and The CIT Group/Equipment Financing, Inc. which
the Company hereby incorporates by reference from Exhibit 10.13 to the ClimaChem
Form S-4 Registration Statement, No. 333-44905.
10.18. First Amendment to Loan and Security Agreement (Mixed Acid Plant), dated
November 15, 1995, between DSN Corporation and The CIT Group/Equipment
Financing, Inc. which the Company hereby incorporates by reference from Exhibit
10.15 to the ClimaChem Form S-4 Registration Statement, No. 333-44905.
10.19. Loan and Security Agreement (Rail Tank Cars), dated November 15, 1995,
between DSN Corporation and The CIT Group/Equipment Financing, Inc. which the
Company hereby incorporates by reference from Exhibit 10.16 to the ClimaChem
Form S-4 Registration Statement, No. 333-44905.
10.20. First Amendment to Loan and Security Agreement (Rail Tank Cars), dated
November 15, 1995, between DSN Corporation and The CIT Group/Equipment
Financing, Inc. which the Company hereby incorporates by reference from Exhibit
10.17 to the ClimaChem Form S-4 Registration Statement, No. 333-44905.
10.22. Letter Amendment, dated May 14, 1997, to Loan and Security Agreement
between DSN Corporation and The CIT Group/Equipment Financing, Inc. 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, 1997.
10.23. Amendment to Loan and Security Agreement, dated November 21, 1997,
between DSN Corporation and The CIT Group/Equipment Financing, Inc. which the
Company hereby incorporates by reference from Exhibit 10.19 to the ClimaChem
Form S-4 Registration Statement, No. 333-44905.
10.24. 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.
25
10.25. 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.
10.26. 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.
10.27. 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.
10.28. 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.
10.29. 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.
10.30. 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.
10.31. 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.
10.32. 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.
26
10.33. Amendment to Loan and Security Agreement, dated March 16, 1998, between
The CIT Group/Equipment Financing, Inc., and DSN Corporation which the Company
hereby incorporates by reference from Exhibit 10.54 to the ClimaChem Form S-4
Registration Statement, No. 333-44905.
10.34. Fifth Amendment to Lease Agreement, dated as of December 31, 1998,
between Mac Venture, Ltd. and Hercules Energy Mfg. Corporation, which the
Company hereby incorporates by reference from Exhibit 10.38 to the Company's
Form 10-K for the year ended December 31, 1998.
10.35. Union Contract, dated August 1, 1998, between EDC and the International
Association of Machinists and Aerospace Workers, which the Company hereby
incorporates by reference from Exhibit 10.42 to the Company's Form 10-K for the
year ended December 31, 1998.
10.36. 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 year ended
December 31, 1998. The Company entered into substantially identical agreements
with Bernard G. Ille, Jerome D. Shaffer, Raymond B. Ackerman, Horace G. Rhodes,
Gerald J. Gagner, and Donald W. Munson. The Company will provide copies of these
agreements to the Commission upon request.
10.37. 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.
10.38. Letter Agreement, dated March 12, 1999, between Kestrel Aircraft Company
and LSB Industries, Inc., Prime Financial Corporation, Herman Meinders, Carlan
K. Yates, Larry H. Lemon, Co-Trustee Larry H. Lemon Living Trust, which the
Company hereby incorporates by reference from Exhibit 10.45 to the Company's
Form 10-K for the year ended December 31, 1998.
10.39. 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.
10.40 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.
10.41. First Amendment to Second Amended and Restated Loan and Security
Agreement, dated January 1, 2000, by and between Bank of America, N.A. and LSB
Industries, Inc., Summit Machine Tool Manufacturing Corp., and Morey Machinery
Manufacturing Corporation, which the Company hereby incorporates by reference
from Exhibit 10.3 to the Company's Form 8-K dated December 30, 1999.
10.42 Amendment to Anhydrous Ammonia Sales Agreement, dated January 4, 2000, to
be effective October 1, 1999, between Koch Nitrogen Company and El Dorado
Chemical Company, which is incorporated by reference from Exhibit 10.43 to the
Company's Amendment No. 2 to its 1999 Form 10-K. CERTAIN INFORMATION WITHIN THIS
EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT OF COMMISSION ORDER CF#9650, DATED
JULY 2000, GRANTING A REQUEST BY THE COMPANY FOR CONFIDENTIAL TREATMENT BY THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE FREEDOM OF INFORMATION ACT.
10.43 Anhydrous Ammonia Sales Agreement, dated January 2000, to be effective
October 1, 1999, between Koch Nitrogen Company and El Dorado Chemical Company
which is incorporated by reference from Exhibit 10.44 to the Company's Amendment
No. 2 to its 1999 Form 10-K. CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN
OMITTED AS IT IS THE SUBJECT OF COMMISSION ORDER CF#9650, DATED JULY 2000,
GRANTING A REQUEST BY THE COMPANY FOR CONFIDENTIAL TREATMENT BY THE SECURITIES
AND EXCHANGE COMMISSION UNDER THE FREEDOM OF INFORMATION ACT.
27
10.44 Second Amendment to Second Amended and Restated Loan and Security
Agreement, dated March 1, 2000 by and between Bank of America, N.A. and LSB
Industries Inc., Summit Machine Tool Manufacturing Corp., and Morey Machinery
Manufacturing Corporation, which the Company hereby incorporates by reference
from Exhibit 10.3 to the Company's Form 8-K dated March 1, 2000.
10.45 Third Amendment to Second Amended and Restated Loan and Security
Agreement, dated March 31, 2000 by and between Bank of America, N.A. and LSB
Industries Inc., Summit Machine Tool Manufacturing Corp., and Morey Machinery
manufacturing Corporation, which the Company hereby incorporates by reference
from Exhibit 10.14 to the Company's Form 10-Q for the fiscal quarter ended March
31, 2000.
10.46 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.
10.47 Letter, dated April 1, 2000, executed by SBL to Prime amending the
Promissory Note, which the Company incorporates by reference from Exhibit 10.52
to the Company's Amendment No. 2 to its 1999 Form 10-K.
10.48 Guaranty Agreement, dated as of April 21, 2000, by Prime to Stillwater
National Bank & Trust relating to that portion of the SBL Borrowings borrowed by
SBL, which the Company incorporates by reference from Exhibit 10.53 to the
Company's Amendment No. 2 to its 1999 Form 10-K. Substantial similar guarantees
have been executed by Prime in favor of Stillwater covering the amounts borrowed
by the following affiliates SBL relating to the SBL Borrowings (as in
"Relationships and Related Transactions:") listed in Exhibit A attached to the
Guaranty Agreement with the only material differences being the name of the
debtor and the amount owing by such debtor. Copies of which will provided to the
Commission upon request.
10.49 Security Agreement, dated effective April 21, 2000, executed by Prime in
favor of Stillwater National Bank and Trust, which the Company incorporates by
reference from Exhibit 10.54 to the Company's Amendment No. 2 to its 1999 Form
10-K.
10.50 Limited Guaranty, effective April 21, 2000, executed by Prime to
Stillwater National Bank and Trust, which the Company incorporates by reference
from Exhibit 10.55 to the Company's Amendment No. 2 to its 1999 Form 10-K.
10.51 Covenant Waiver Letter, dated October 19, 2000, between The CIT Group and
DSN 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, 2000.
10.52 Fourth Amendment to Second Amended and Restated Loan and Security
Agreement dated October 10, 2000 by and between Bank of America, N.A. and LSB
Industries, Inc., Summit Machine Tool Manufacturing Corp., and Morey Machinery
Manufacturing 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, 2000.
10.53 Letter Agreement, dated August 23, 2000, between LSB Chemical Corp. and
Orica USA, Inc., which the Company hereby incorporates by reference from Exhibit
10.4 to the Company's Form 10-Q for the fiscal quarter ended September 30, 2000.
CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT OF
COMMISSION ORDER CF #10714, DATED FEBRUARY 21, 2001, GRANTING A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF INFORMATION ACT AND THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
10.54 Agreement, dated October 31, 2000, between Orica Nitrogen, L.L.C., Orica
USA, Inc., and LSB Chemical Corp., which the Company hereby incorporates by
reference from Exhibit 10.5 to the company's Form 10-Q for the fiscal quarter
ended September 20, 2000. CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN
OMITTED AS IT IS THE SUBJECT OF COMMISSION ORDER CF # 10714 DATED FEBRUARY 21,
2001, GRANTING A REQUEST FOR CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF
INFORMATION ACT AND THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
28
10.55. Letter, dated April 1, 2001, executed by SBL to Prime amending the
Promissory Note.*
10.56. Letter of Intent, dated December 22, 2000, between El Dorado Chemical
Company and Orica USA, Inc.*
10.57. Agreement, dated April 2, 2001, between Crystal City Nitrogen Company and
River Cement Company.*
10.58. Loan and Security Agreement, dated April 13, 2001 by and among LSB
Industries, Inc., ClimaChem 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 ClimaChem, Inc.'s
amendment No. 1 to Form 10-K for the year ended December 31, 2000.
10.59. Third Amended and Restated Loan and Security Agreement dated April 16,
2001 by and between Bank of America, N.A. and Summit Machine Tool Manufacturing
Corp.**
21.1. Subsidiaries of the Company.*
23.1. Consent of Independent Auditors.*
* Filed in the original Form 10-K for the year ended December 31, 2000, which
was filed with the Securities and Exchange Commission on April 17, 2001.
** Filed herewith.
(b) REPORTS ON FORM 8-K. The Company filed the following report on Form 8-K
during the fourth quarter of 2000.
(i) Form 8-K, dated November 15, 2000. (date of event: October 31, 2000).
The item reported was Item 2, "Acquisition or Disposition of Assets",
discussing the letter agreement between LSB Chemical Corp. and Orica
USA Inc. and the agreement between Orica Nitrogen, L.L.C., Orica USA,
Inc. and LSB Chemical Corp. relating to the acquisition of certain
assets located in Cherokee, Alabama and Crystal City, Missouri.
29
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Company has caused the undersigned,
duly-authorized, to sign this Amendment No.1 to the report on its behalf on this
27th day of April, 2001.
LSB INDUSTRIES, INC.
By: /s/ Jack E. Golsen
Jack E. Golsen
Chairman of the Board and
President
(Principal Executive Officer)
By: /s/ Tony M. Shelby
Tony M. Shelby
Senior Vice President of Finance
(Principal Financial Officer)
By: /s/ Jim D. Jones
Jim D. Jones
Vice President, Controller and
Treasurer (Principal Accounting
Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the undersigned have signed this report on behalf of the Company, in
the capacities and on the dates indicated.
Dated: April 27, 2001 By: /s/ Jack E. Golsen
Jack E. Golsen, Director
Dated: April 27, 2001 By: /s/ Tony M. Shelby
Tony M. Shelby, Director
Dated: April 27, 2001 By: /s/ David R. Goss
David R. Goss, Director
Dated: April 27, 2001 By: /s/ Barry H.Golsen
Barry H. Golsen, Director
Dated: April 27, 2001 By: /s/ Robert C. Brown
Robert C. Brown, Director
Dated: April 27, 2001 By: /s/ Bernard G. Ille
Bernard G. Ille, Director
30
Dated: April 27, 2001 By: /s/ Jerome D. Shaffer
Jerome D. Shaffer, Director
Dated: April 27, 2001 By: /s/ Raymond B. Ackerman
Raymond B. Ackerman, Director
Dated: April 27, 2001 By: /s/ Horace G. Rhodes
Horace G. Rhodes, Director.
Dated: April 27, 2001 By: /s/ Gerald J. Gagner
Gerald J. Gagner, Director
Dated: April 27, 2001 By: /s/ Donald W. Munson
Donald W. Munson, Director
Dated: April 27, 2001 By: /s/ Charles A. Burtch
Charles A. Burtch, Director
31
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
2.1. Stock Purchase Agreement and Stock Pledge Agreement between Dr.
Hauri AG, a Swiss Corporation, and LSB Chemical Corp., which the
Company hereby incorporates by reference from Exhibit 2.2 to the
Company's Form 10-K for fiscal year ended December 31, 1994.
2.2. Asset Purchase and Sale Agreement, dated May 4, 2000 L&S
Automotive Products Co., L&S Bearing So., LSB Extrusion Co.,
Rotex Corporation and DriveLine Technologies, Inc., which is
incorporated from Exhibit 2.2 to the Company's Amendment No. 2 to
the 1999 Form 10-K. This agreement includes certain exhibits and
schedules that are not included with this exhibit, and will be
provided upon request by the Commission.
3.1. Restated Certificate of Incorporation, the Certificate of
Designation dated February 17, 1989, and certificate of
Elimination dated April 30, 1993, which the Company hereby
incorporates by reference from Exhibit 4.1 to the Company's
Registration Statement, No. 33-61640; Certificate of Designation
for the Company's $3.25 Convertible Exchangeable Class C
Preferred Stock, Series 2, which the Company hereby incorporates
by reference from Exhibit 4.6 to the Company's Registration
Statement, No. 33-61640.
3.2. 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.
4.1. Specimen Certificate for the Company's Non-cumulative Preferred
Stock, having a par value of $100 per share, which the Company
hereby incorporates by reference from Exhibit 4.1 to the
Company's Form 10-Q for the quarter ended June 30, 1983.
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 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.
4.5. 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.
4.6. Indenture, dated as of November 26, 1997, by and among ClimaChem,
Inc., the Subsidiary Guarantors and Bank One, NA, as trustee,
which the Company hereby incorporates by reference from Exhibit
4.1 to the Company's Form 8-K, dated November 26, 1997.
4.7. Form 10 3/4% Series B Senior Notes due 2007 which the Company
hereby incorporates by reference from Exhibit 4.3 to the
ClimaChem Registration Statement, No. 333-44905.
4.8. First Supplemental Indenture, dated February 8, 1999, by and
among ClimaChem, Inc., the Guarantors, and Bank One N.A., which
the Company hereby incorporates by reference from Exhibit 4.19 to
the Company's Form 10-K for the year ended December 31, 1998.
4.9. Second Amended and Restated Loan and Security Agreement dated May
10, 1999, by and between Bank of America National Trust and
Savings Association and LSB Industries, Inc., Summit Machine Tool
Manufacturing Corp., and Morey Machinery Manufacturing
Corporation, 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, 1999.
32
10.1. Form of Death Benefit Plan Agreement between the Company and the
employees covered under the plan, which the Company hereby
incorporates by reference from Exhibit 10(c)(1) to the Company's
Form 10-K for the year ended December 31, 1980.
10.2. The Company's 1981 Incentive Stock Option Plan, as amended, and
1986 Incentive Stock Option Plan, which the Company hereby
incorporates by reference from Exhibits 10.1 and 10.2 to the
Company's Registration Statement No. 33-8302.
10.3. Form of Incentive Stock Option Agreement between the Company and
employees as to the Company's 1981 Incentive Stock Option Plan,
which the Company hereby incorporates by reference from Exhibit
10.10 to the Company's Form 10-K for the fiscal year ended
December 31, 1984.
10.4. Form of Incentive Stock Option Agreement between the Company and
employees as to the Company's 1986 Incentive Stock Option Plan,
which the Company hereby incorporates by reference from Exhibit
10.6 to the Company's Registration Statement No. 33-9848.
10.5. The 1987 Amendments to the Company's 1981 Incentive Stock Option
Plan and 1986 Incentive Stock Option Plan, which the Company
hereby incorporates by reference from Exhibit 10.7 to the
Company's Form 10-K for the fiscal year ended December 31, 1986.
10.6. The Company's 1993 Stock Option and Incentive Plan which the
Company hereby incorporates by reference from Exhibit 10.6 to the
Company's Form 10-K for the fiscal year ended December 31, 1993.
10.7. The Company's 1993 Non-employee Director Stock Option Plan which
the Company hereby incorporates by reference from Exhibit 10.7 to
the Company's Form 10-K for the fiscal year ended December 31,
1993.
10.8. Lease Agreement, dated March 26, 1982, between Mac Venture, Ltd.
and Hercules Energy Mfg. Corporation, which the Company hereby
incorporates by reference from Exhibit 10.32 to the Company's
Form 10-K for the fiscal year ended December 31, 1981.
10.9. 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.
10.10. Lease Agreement dated November 12, 1987, between Climate Master,
Inc. and West Point Company and amendments thereto, which the
Company hereby incorporates by reference from Exhibits 10.32,
10.36, and 10.37, to the Company's Form 10-K for fiscal year
ended December 31, 1988.
10.11. Severance Agreement, dated January 17, 1989, between the Company
and Jack E. Golsen, which the Company hereby incorporates by
reference from Exhibit 10.48 to the Company's Form 10-K for
fiscal year ended December 31, 1988. 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.
10.12. Third Amendment to Lease Agreement, dated as of December 31,
1987, between Mac Venture, Ltd. and Hercules Energy Mfg.
Corporation, which the Company hereby incorporates by reference
from Exhibit 10.49 to the Company's Form 10-K for fiscal year
ended December 31, 1988.
10.13. 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.
10.14. Non-Qualified Stock Option Agreement, dated June 1, 1992, between
the Company and Robert C. Brown, M.D. which the Company hereby
incorporates by reference from Exhibit 10.38 to the Company's
Form 10-K for fiscal year ended December 31, 1992. The Company
entered into substantially identical
33
agreements with Bernard G. Ille, Jerome D. Shaffer and C.L.
Thurman, and the Company will provide copies thereof to the
Commission upon request.
10.15. Loan and Security Agreement (DSN Plant) dated October 31, 1994
between DSN Corporation and The CIT Group 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,
1994.
10.16. Loan and Security Agreement (Mixed Acid Plant) dated April 5,
1995 between DSN Corporation and The CIT Group, which the Company
hereby incorporates by reference from Exhibit 10.25 to the
Company's Form 10-K for the fiscal year ended December 31, 1994.
10.17. First Amendment to Loan and Security Agreement (DSN Plant), dated
June 1, 1995, between DSN Corporation and The CIT Group/Equipment
Financing, Inc. which the Company hereby incorporates by
reference from Exhibit 10.13 to the ClimaChem Form S-4
Registration Statement, No. 333-44905.
10.18. First Amendment to Loan and Security Agreement (Mixed Acid
Plant), dated November 15, 1995, between DSN Corporation and The
CIT Group/Equipment Financing, Inc. which the Company hereby
incorporates by reference from Exhibit 10.15 to the ClimaChem
Form S-4 Registration Statement, No. 333-44905.
10.19. Loan and Security Agreement (Rail Tank Cars), dated November 15,
1995, between DSN Corporation and The CIT Group/Equipment
Financing, Inc. which the Company hereby incorporates by
reference from Exhibit 10.16 to the ClimaChem Form S-4
Registration Statement, No. 333-44905.
10.20. First Amendment to Loan and Security Agreement (Rail Tank Cars),
dated November 15, 1995, between DSN Corporation and The CIT
Group/Equipment Financing, Inc. which the Company hereby
incorporates by reference from Exhibit 10.17 to the ClimaChem
Form S-4 Registration Statement, No. 333-44905.
10.22. Letter Amendment, dated May 14, 1997, to Loan and Security
Agreement between DSN Corporation and The CIT Group/Equipment
Financing, Inc. 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, 1997.
10.23. Amendment to Loan and Security Agreement, dated November 21,
1997, between DSN Corporation and The CIT Group/Equipment
Financing, Inc. which the Company hereby incorporates by
reference from Exhibit 10.19 to the ClimaChem Form S-4
Registration Statement, No. 333-44905.
10.24. 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.
10.25. 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.
10.26. 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.
34
10.27. 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.
10.28. 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.
10.29. 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.
10.30. 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.
10.31. 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.
10.32. 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.
10.33. Amendment to Loan and Security Agreement, dated March 16, 1998,
between The CIT Group/Equipment Financing, Inc., and DSN
Corporation which the Company hereby incorporates by reference
from Exhibit 10.54 to the ClimaChem Form S-4 Registration
Statement, No. 333-44905.
10.34. Fifth Amendment to Lease Agreement, dated as of December 31,
1998, between Mac Venture, Ltd. and Hercules Energy Mfg.
Corporation, which the Company hereby incorporates by reference
from Exhibit 10.38 to the Company's Form 10-K for the year ended
December 31, 1998.
10.35. Union Contract, dated August 1, 1998, between EDC and the
International Association of Machinists and Aerospace Workers,
which the Company hereby incorporates by reference from Exhibit
10.42 to the Company's Form 10-K for the year ended December 31,
1998.
10.36. 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 year ended December 31, 1998. The
Company entered into substantially identical
35
agreements with Bernard G. Ille, Jerome D. Shaffer, Raymond B.
Ackerman, Horace G. Rhodes, Gerald J. Gagner, and Donald W.
Munson. The Company will provide copies of these agreements to
the Commission upon request.
10.37. 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.
10.38. Letter Agreement, dated March 12, 1999, between Kestrel Aircraft
Company and LSB Industries, Inc., Prime Financial Corporation,
Herman Meinders, Carlan K. Yates, Larry H. Lemon, Co-Trustee
Larry H. Lemon Living Trust, which the Company hereby
incorporates by reference from Exhibit 10.45 to the Company's
Form 10-K for the year ended December 31, 1998.
10.39. 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.
10.40 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.
10.41. First Amendment to Second Amended and Restated Loan and Security
Agreement, dated January 1, 2000, by and between Bank of America,
N.A. and LSB Industries, Inc., Summit Machine Tool Manufacturing
Corp., and Morey Machinery Manufacturing Corporation, which the
Company hereby incorporates by reference from Exhibit 10.3 to the
Company's Form 8-K dated December 30, 1999.
10.42 Amendment to Anhydrous Ammonia Sales Agreement, dated January 4,
2000, to be effective October 1, 1999, between Koch Nitrogen
Company and El Dorado Chemical Company, which is incorporated by
reference from Exhibit 10.43 to the Company's Amendment No. 2 to
its 1999 Form 10-K. CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS
BEEN OMITTED AS IT IS THE SUBJECT OF COMMISSION ORDER CF#9650,
DATED JULY 2000, GRANTING A REQUEST BY THE COMPANY FOR
CONFIDENTIAL TREATMENT BY THE SECURITIES AND EXCHANGE COMMISSION
UNDER THE FREEDOM OF INFORMATION ACT.
10.43 Anhydrous Ammonia Sales Agreement, dated January 2000, to be
effective October 1, 1999, between Koch Nitrogen Company and El
Dorado Chemical Company which is incorporated by reference from
Exhibit 10.44 to the Company's Amendment No. 2 to its 1999 Form
10-K. CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS
IT IS THE SUBJECT OF COMMISSION ORDER CF#9650, DATED JULY 2000,
GRANTING A REQUEST BY THE COMPANY FOR CONFIDENTIAL TREATMENT BY
THE SECURITIES AND EXCHANGE COMMISSION UNDER THE FREEDOM OF
INFORMATION ACT.
10.44 Second Amendment to Second Amended and Restated Loan and Security
Agreement, dated March 1, 2000 by and between Bank of America,
N.A. and LSB Industries Inc., Summit Machine Tool Manufacturing
Corp., and Morey Machinery Manufacturing Corporation, which the
Company hereby incorporates by reference from Exhibit 10.3 to the
Company's Form 8-K dated March 1, 2000.
10.45 Third Amendment to Second Amended and Restated Loan and Security
Agreement, dated March 31, 2000 by and between Bank of America,
N.A. and LSB Industries Inc., Summit Machine Tool Manufacturing
Corp., and Morey Machinery manufacturing Corporation, which the
Company hereby incorporates by reference from Exhibit 10.14 to
the Company's Form 10-Q for the fiscal quarter ended March 31,
2000.
10.46 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.
10.47 Letter, dated April 1, 2000, executed by SBL to Prime amending
the Promissory Note, which the
36
Company incorporates by reference from Exhibit 10.52 to the
Company's Amendment No. 2 to its 1999 Form 10-K.
10.48 Guaranty Agreement, dated as of April 21, 2000, by Prime to
Stillwater National Bank & Trust relating to that portion of the
SBL Borrowings borrowed by SBL, which the Company incorporates by
reference from Exhibit 10.53 to the Company's Amendment No. 2 to
its 1999 Form 10-K. Substantial similar guarantees have been
executed by Prime in favor of Stillwater covering the amounts
borrowed by the following affiliates SBL relating to the SBL
Borrowings (as in "Relationships and Related Transactions:")
listed in Exhibit A attached to the Guaranty Agreement with the
only material differences being the name of the debtor and the
amount owing by such debtor. Copies of which will provided to the
Commission upon request.
10.49 Security Agreement, dated effective April 21, 2000, executed by
Prime in favor of Stillwater National Bank and Trust, which the
Company incorporates by reference from Exhibit 10.54 to the
Company's Amendment No. 2 to its 1999 Form 10-K.
10.50 Limited Guaranty, effective April 21, 2000, executed by Prime to
Stillwater National Bank and Trust, which the Company
incorporates by reference from Exhibit 10.55 to the Company's
Amendment No. 2 to its 1999 Form 10-K.
10.51 Covenant Waiver Letter, dated October 19, 2000, between The CIT
Group and DSN 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, 2000.
10.52 Fourth Amendment to Second Amended and Restated Loan and Security
Agreement dated October 10, 2000 by and between Bank of America,
N.A. and LSB Industries, Inc., Summit Machine Tool Manufacturing
Corp., and Morey Machinery Manufacturing 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,
2000.
10.53 Letter Agreement, dated August 23, 2000, between LSB Chemical
Corp. and Orica USA, Inc., which the Company hereby incorporates
by reference from Exhibit 10.4 to the Company's Form 10-Q for the
fiscal quarter ended September 30, 2000. CERTAIN INFORMATION
WITHIN THIS EXHIBIT HAS BEEN OMITTED AS IT IS THE SUBJECT OF
COMMISSION ORDER CF #10714, DATED FEBRUARY 21, 2001, GRANTING A
REQUEST FOR CONFIDENTIAL TREATMENT UNDER THE FREEDOM OF
INFORMATION ACT AND THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
10.54 Agreement, dated October 31, 2000, between Orica Nitrogen,
L.L.C., Orica USA, Inc., and LSB Chemical Corp., which the
Company hereby incorporates by reference from Exhibit 10.5 to the
company's Form 10-Q for the fiscal quarter ended September 20,
2000. CERTAIN INFORMATION WITHIN THIS EXHIBIT HAS BEEN OMITTED AS
IT IS THE SUBJECT OF COMMISSION ORDER CF # 10714 DATED FEBRUARY
21, 2001, GRANTING A REQUEST FOR CONFIDENTIAL TREATMENT UNDER THE
FREEDOM OF INFORMATION ACT AND THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.
10.55. Letter, dated April 1, 2001, executed by SBL to Prime amending
the Promissory Note.*
10.56. Letter of Intent, dated December 22, 2000, between El Dorado
Chemical Company and Orica USA, Inc.*
10.60. Agreement, dated April 2, 2001, between Crystal City Nitrogen
Company and River Cement Company.*
10.61. Loan and Security Agreement, dated April 13, 2001 by and among
LSB Industries, Inc., ClimaChem 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 ClimaChem, Inc.'s amendment No. 1
to Form 10-K for the year ended December 31, 2000.
37
10.62. Third Amended and Restated Loan and Security Agreement dated
April 16, 2001 by and between Bank of America, N.A. and Summit
Machine Tool Manufacturing Corp.**
21.1. Subsidiaries of the Company.*
23.1. Consent of Independent Auditors.*
* Filed in the original Form 10-K for the year ended December 31, 2000, which
was filed with the Securities and Exchange Commission on April 17, 2001.
** Filed herewith.