UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C.
20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF
1934
Date of
report (Date of earliest event reported) December 17,
2008
LSB INDUSTRIES, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-7677
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73-1015226
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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16 South Pennsylvania, Oklahoma
City, Oklahoma
(Address of principal executive offices) |
73107
(Zip
Code) |
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Registrant's telephone number,
including area code (405) 235-4546
Not applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Section
5 – Corporate Governance and Management
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Item
5.02
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Departure
of Directors or Certain Officers; Election of Directors; Appointment of
Principal Officers.
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Effective
December 17, 2008, the Board of Directors of LSB Industries, Inc. (the
“Company”), based on the recommendation and approval of its Compensation and
Stock Option Committee (the “Committee”), approved the amendment of the
following Company benefit plans in order to address, before year-end, the
documentation requirements of Section 409A of the Internal Revenue Code
(“Section 409A”):
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(1)
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Employment
Agreement, dated March 21, 1996, as amended April 29, 2003 and May 12,
2005, between the Company and Jack E. Golsen, the Company’s Chief
Executive Officer;
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(2)
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Severance
Agreements, each dated January 17, 1989, between the Company and certain
officers of the Company, including each of Jack E. Golsen; Barry H.
Golsen, President and Chief Operating Officer; Tony M. Shelby, Chief
Financial Officer; David R. Goss, Executive Vice President of Operations;
and David M. Shear, Senior Vice President and General Counsel (whose
Severance Agreement is dated September 25, 1991); and Steven J. Golsen,
Chief Executive Officer of one of the Company’s subsidiaries and Chief
Operating Officer of the Company’s Climate Control business;
and
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(3)
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Non-Qualified
Benefit Plan Agreements, each dated January 1, 1992, between the Company
and each of Barry H. Golsen, David M. Shear, and Steven J.
Golsen.
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The
amendments primarily clarify and modify the dates on which certain types of
benefits are provided, in order to comply with Section 409A. Where applicable,
the amendments require that payments due to a “specified employee” (as such term
is defined under Section 409A) upon separation from service must be delayed
until the earlier of death or the expiration of a period of six months, among
other revisions made to comply with Section 409A.
Except as
amended to address Section 409A, the agreements listed above are materially
consistent with the respective pre-amendment agreements. This
description of the amendments is qualified in its entirety by reference to the
amendments, which are filed herewith as Exhibits 99.1, 99.2 and 99.3 and
incorporated herein.
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Item
9.01. Financial Statement and
Exhibits
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(d) Exhibits.
Exhibit Description
0;
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99.1
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Third
Amendment to Employment Agreement, dated December 17, 2008, between the
Company and Jack E. Golsen
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99.2
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Amendment
to Severance Agreement, dated December 17, 2008, between Barry H. Golsen
and the Company. Each Amendment to Severance
Agreement with Jack E. Golsen, Tony M. Shelby, David R. Goss and David M.
Shear is substantially the same as this exhibit and will be provided to
the Commission upon request.
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99.3
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Amendment
to Non-Qualified Benefit Plan Agreement, dated December 17, 2008, between
Barry H. Golsen and the Company. Each Amendment to
Non-Qualified Benefit Plan Agreement with David R. Goss and Steven J.
Golsen is substantially the same as this exhibit and will be provided to
the Commission upon request.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
Dated:
December 23, 2008
LSB INDUSTRIES,
INC.
By: /s/ Tony M.
Shelby
Tony M. Shelby,
Executive Vice President of
Finance and Chief Financial Officer
THIRD
AMENDMENT
TO
EMPLOYMENT
AGREEMENT
This
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT (the “Amendment”) is entered into
this 17th day of December 2008, by and between LSB INDUSTRIES, INC., a
Delaware corporation (the “Company”), and JACK E. GOLSEN, an individual
(“Golsen”), and amends that certain Employment Agreement, dated March 21, 1996,
as amended by the First Amendment to Employment Agreement, dated April 29, 2003,
and by the Second Amendment to Employment Agreement, dated May 12, 2005
(collectively, the “Agreement”).
WHEREAS,
Section 409A of the Internal Revenue Code of 1986, as amended (“the Code”), and
the regulations promulgated thereunder (collectively, “Section 409A”) require
that payments of “nonqualified deferred compensation” to “specified employees”
be delayed for six months from “separation from service” (as those terms are
defined under Section 409A);
WHEREAS,
Golsen is currently a “specified employee” as defined in Section
409A;
WHEREAS,
the Agreement provides for the payment of certain severance benefits upon
termination of service, which may be considered nonqualified deferred
compensation subject to Section 409A; and
WHEREAS,
the Company and Golsen desire to amend the terms of the Agreement to comply with
Section 409A.
NOW,
THEREFORE, the Company and Golsen hereby agree to amend the Agreement as
follows:
1. Amendments to Section
4. Section 4 of the Agreement is hereby amended as
follows:
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1.1.
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4.d. Paragraph
d of Section 4 of the Agreement is hereby amended by striking the
paragraph immediately following paragraph c of Section 4 and inserting the
following language in lieu thereof:
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Without
in any way limiting any of Golsen’s other rights or remedies, at law or in
equity, which rights and remedies shall be cumulative, and subject to Section 7
hereof, in the event of Golsen’s separation from service with the Company for
any reason:
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1.2.
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4.d(1) and
(2). Paragraphs d(1) and d(2) of Section 4 are hereby
amended by deleting each occurrence of the phrase “in a lump sum cash
payment on the date of Golsen’s termination of employment” and inserting
in lieu thereof the following:
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in a
single lump sum payment within thirty days after the date of Golsen’s separation
from service
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1.3.
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4.e. Paragraph
e of Section 4 is hereby deleted in its entirety and replaced with the
following:
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e.
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Subject
to Section 10.1 of this Agreement, in the event of Golsen’s separation
from service with the Company for any reason, other than under paragraphs
a or b this Section 4 or disability under Section 5, the Company shall
provide, to Golsen and/or Golsen’s family or estate, as applicable, the
following: (i) during the period commencing on the date of separation from
service and ending on the expiration of 18 months, medical, dental and
vision coverage at least substantially equal to the coverage that would
have been provided to them in accordance with Section 3 hereof, provided
that Golsen agrees to elect COBRA coverage to the extent, and for the
period, available under the Company's health insurance plans, and the
Company shall reimburse the cost of any premiums for such coverage on an
after-tax basis on the last business day of each month, (ii) upon the
expiration of the COBRA period or such earlier time as COBRA coverage may
not be available under the Company’s health insurance plans, until the
expiration of the Term, with such medical, dental and vision coverage
being substantially equal to the coverage that would have been provided to
them in accordance with Section 3, and will reimburse Golsen and or
Golsen’s family or estate, as applicable, the cost of any premiums for
such coverage on an after tax basis on the last business day of each
month, and (iii) the unrestricted use of a vehicle, a cell phone, and
the other benefits listed on Schedule 1 to this Agreement, and on the last
day of each month the Company will reimburse Golsen for all out of pocket
expenses incurred by Golsen in connection with such
benefits. The benefits to be provided pursuant to this
paragraph e of Section 4 and subject to Section 10.1 of this Agreement,
will be provided in accordance with the most favorable plans,
practices, programs or policies of the Company, as may be adopted and
amended from time to time. In the event that Golsen suffers a
disability, the Company agrees to pay him pursuant to Section 5
hereof.
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2. Amendments to Section
5. Section 5 is hereby deleted and a new Section 5 is inserted
in lieu thereof:
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5.
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Disability. In
the event of Golsen’s separation from service from the Company as a result
of a disability, (i) the Company shall pay and provide Golsen all salary,
bonus and benefits remaining during the Term of this Agreement or any
extension thereof, and (ii) thereafter, the Company shall pay to Golsen
annual payments equal to 60% of his Present Base Salary
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2
until his death. All amounts payable pursuant to this
Section 5 will be paid by the Company in accordance with the Company’s regular
payroll and bonus practices. For purposes of this Agreement, the term
“disability” means Golsen being unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months.
3. New Section
10. The Agreement is hereby amended by inserting the following
new Section 10 immediately following Section 9 of this Agreement:
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10.
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Section
409A.
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10.1
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6-Month
Delay. If any amounts that become due under this
Agreement constitute “nonqualified deferred compensation” within the
meaning of Section 409A of the Code, payment of such amounts shall not
commence until Golsen incurs a “separation from service,” except payments
of amounts due pursuant to Section 5 will not commence unless and until
Golsen suffers a disability. Notwithstanding anything herein to
the contrary, if Golsen is a “specified employee,” for purposes of Section
409A of the Code, on the date on which he incurs a separation from
service, any payment hereunder that provides for the “deferral of
compensation” within the meaning of Section 409A of the Code shall not be
paid prior to the first business day after the date that is six months
following Golsen’s “separation from service;” provided, however, that a
payment delayed pursuant to the preceding clause shall commence earlier in
the event of Golsen’s death prior to the end of the six-month period.
Within 10 business days after the end of such six months, Golsen shall be
paid a lump sum payment in cash equal to any payments delayed because of
the preceding sentence. Thereafter, Golsen shall receive any
remaining benefits as if there had not been an earlier
delay.
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10.2
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Certain
Definitions. For purposes of this Agreement, the term
“separation from service” shall have the meaning set forth in Section
409A(a)(2)(i)(A) of the Code and determined in accordance with the default
rules under Section 409A of the Code. The term “specified
employee” shall have the meaning set forth in Section 409A(a)(2)(B)(1) of
the Code, as determined in accordance with the uniform methodology and
procedures adopted by the Employer and then in
effect.
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10.3
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Reimbursements. Anything
in this Agreement to the contrary notwithstanding, no reimbursement
payable to Golsen pursuant to any provisions of this Agreement or pursuant
to any plan or arrangement of the Company covered by this Agreement shall
be
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3
paid later than the last day of the calendar year following the
calendar year in which the related expense was incurred, except to the extent
that the right to reimbursement does not provide for a “deferral of
compensation” within the meaning of Section 409A of the Code. No amount
reimbursed during any calendar year shall affect the amounts eligible for
reimbursement in any other calendar year.
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10.4
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Separate
Payments. Each amount payable to Golsen pursuant to
paragraph e of Section 4 and pursuant to Section 5 will constitute a
separate payment for purposes of Section 409A of the
Code.
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10.5
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Intent. The
provisions of this Agreement are intended to satisfy the applicable
requirements of Section 409A of the Code with respect to amounts subject
thereto and shall be performed, interpreted and construed consistent with
such intent. If any provision of this Agreement does not satisfy such
requirements or could otherwise cause Golsen to recognize income under
Section 409A of the Code, Golsen and the Company agree to negotiate in
good faith an appropriate modification to maintain, to the maximum extent
practicable, the original intent of the applicable provision without
violating the requirements of Section 409A of the Code or otherwise
causing the recognition of income
thereunder.
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IN WITNESS WHEREOF, this Agreement is
executed effective as of the 17th day of December 2008.
LSB
INDUSTRIES, INC.
By: /s/Tony
Shelby,
Name:
Tony
Shelby
Title: Vice
President
/s/Jack E. Golsen
JACK E.
GOLSEN, an individual
AMENDMENT
TO
SEVERANCE
AGREEMENT
This
SECOND AMENDMENT TO SEVERANCE AGREEMENT (the “Amendment”) is entered into
this 17th day of December 2008, by and between LSB INDUSTRIES, INC., a
Delaware corporation (the “Company”), and Barry H. Golsen, an individual
(the “Executive”), and amends that certain Severance Agreement, dated January
17, 1989 (the “Agreement”).
WHEREAS,
Section 409A of the Internal Revenue Code of 1986, as amended (“the Code”), and
the regulations promulgated thereunder (collectively, “Section 409A”) require
that payments of “nonqualified deferred compensation” to “specified employees”
be delayed for six months from “separation from service” (as those terms are
defined under Section 409A);
WHEREAS,
the Executive is currently a “specified employee” as defined in Section
409A;
WHEREAS,
the Agreement provides for the payment of certain benefits upon termination of
service following certain changes in control of the Company, which may be
considered nonqualified deferred compensation subject to Section 409A;
and
WHEREAS,
the Company and the Executive desire to amend the terms of the Agreement to
comply with Section 409A.
NOW,
THEREFORE, the Company and the Executive hereby agree to amend the Agreement as
follows:
1. Amendment to Section
2. Section 2 of the Agreement is hereby amended and restated
to read as follows:
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2.
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Change of
Control. For purposes of this Agreement, a “Change of
Control” means any of the following events occurring during the Change of
Control Period, provided, however, that vesting and payment of the benefit
described in Section 4 will only be made if the occurrence of such event
also constitutes a “change in ownership” or “change of effective control”
of the Company as those terms are defined in Treas. Regs. Section
1.409A-3:
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(a)
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individuals
who, as of the date hereof, constitute the Board of Directors of the
Company (the “Board” generally and as of the date hereof the “Incumbent
Board”) cease for any reason to constitute at least a majority of the
Board; provided, however, that any person becoming a director subsequent
to the date hereof whose election, or nomination for election by the
Company’s shareholders, was approved by a vote of at least a majority of
the directors comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of the directors of the Company, as such terms are used in Rule
14a-ll of Regulation 14A promulgated under the Exchange Act) shall be
deemed to be, for purposes of this Agreement, a member of the Incumbent
Board; or
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(b)
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the
date that any one person, or more than one person acting as a group (as
defined in Treas. Regs. Section 1.409A-3), acquires ownership of stock of
the Company that, together with stock held by such person or group,
constitutes more than fifty percent (50%) of the total fair market value
or total voting power of the stock of the Company;
or
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(c)
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the
date any one person, or more than one person acting as a group (as defined
in Treas. Regs. Section 1.409A-3), acquires (or has acquired during the
12-month period ending on the date of the most recent acquisition by such
person or persons) ownership of stock of the Company possessing thirty
percent (30%) or more of the total voting power of the stock of the
Company, other than the acquisition
by
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(i)
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any
Person or group, which as of the date hereof has such ownership;
or
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(ii)
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any
of the Golsen Group (as defined
below).
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For
the purposes of this Agreement, the term “Golsen Group” shall
mean:
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(A)
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Jack
E. Golsen;
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(B)
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the
spouse of Jack E. Golsen;
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(C)
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Barry
H. Golsen, Steven J. Golsen and Linda Golsen Rappaport, who are the
children of Jack E. Golsen, or any spouse of such
children;
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(D)
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any
estate of, or the executor or administrator of any estate of, or any
guardian or custodian for, any Person described in subparagraphs (A), (B),
or (C), above, so long as such executor, administrator, guardian or
custodian is acting only in his, her or its capacity as
such;
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(E)
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any
corporation, trust (including any voting trust), general partnership,
limited partnership, limited liability company, organization or other
entity (whether now existing or hereafter formed) of which at least 80% of
the outstanding beneficial voting or equity interest are beneficially
owned, directly or indirectly, either (i) by one or more of the Persons
described in subparagraphs (A), (B), (C), and (D), above, or (ii) by any
combination of one or more of the Persons described in subparagraphs (A),
(B), (C), and (D), above; and,
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(F)
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any
other Person (i) who or which is or becomes an Affiliate or Associate of
any Person described in subparagraph (A), (B), (C), (D), or (E), above, or
(ii) of which any Person described in subparagraph (A), (B), (C), (D), or
(E), above, is or becomes an Affiliate or Associate; provided, however, in
either case (i) or case (ii) of this subparagraph (F), such other Person
is not the Beneficial Owner of 5% or more of the shares of Common Stock of
the Company then outstanding (for purposes of determining the number of
shares of Common Stock of the Company of which such other Person is the
Beneficial Owner under this subparagraph (vii), such other Person shall
not be deemed to beneficially own shares of any Person described in
subparagraphs (A), (B), (C), (D), or (E), above, solely by reason of an
Affiliate or Associate relationship of the kind described in (i) or (ii)
above in this subparagraph (F)).
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2. Amendments to Section
3.
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2.1
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3.5. Section
3.5 is deleted in its entirety and replaced with the
following:
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“3.5
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Date of
Termination. “Date of Termination” means, (a) if the termination is
for Cause, the date of receipt of the Notice of Termination or
any later date specified therein, (which date shall not be more than
fifteen (15) days after the giving of such notice), as the case may be,
and (b) if the termination is for Good Reason and the Company has not
cured the default prior to the expiration of the Cure Period, the day
immediately following the expiration date of the Cure
Period. If the Executive’s employment is terminated by the
Company in breach of this Agreement, the Date of Termination shall be the
date on which the Company notifies the Executive of such
termination.”
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2.2
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New
3.6. The following new Section 3.6 is inserted
immediately following Section 3.5:
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“3.5
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Notice Upon
Termination for Good Reason. Notwithstanding any other
provision of this Agreement, if the Executive intends to terminate the
Executive’s employment with the Company for Good Reason, the Executive
must provide a Notice of Termination within ninety (90) days after the
initial existence of the event that constitutes Good
Reason. The Company will have thirty-five (35) days after
receipt of such written notice to cure the default that constitutes Good
Reason (the “Cure Period”).”
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3. New Section
10. The Agreement is hereby amended by inserting the following
new Section 10 immediately following Section 9 of this Agreement:
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“10.
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Section
409A.
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10.1
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6-Month
Delay. If any amounts that become due under this
Agreement constitute “nonqualified deferred compensation” within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended,
and the treasury regulations promulgated thereunder (“Section 409A”),
payment of such amounts shall not commence until the Executive incurs a
“separation from service.” Notwithstanding anything herein to
the contrary, if the Executive is a “specified employee,” for purposes of
Section 409A of the Code, on the date on which he incurs a separation from
service, any payment hereunder that provides for the “deferral of
compensation” within the meaning of Section 409A of the Code shall not be
paid prior to the first business day after the date that is six months
following the Executive’s “separation from service;” provided, however,
that a payment delayed pursuant to the preceding clause shall commence
earlier in the event of the Executive’s death prior to the end of the
six-month period. Within 10 business days after the end of such six
months, the Executive shall be paid a lump sum payment in cash equal to
any payments delayed because of the preceding
sentence. Thereafter, the Executive shall receive any remaining
benefits as if there had not been an earlier
delay.
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10.2
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Certain
Definitions. For purposes of this Agreement, the term
“separation from service” shall have the meaning set forth in Section
409A(a)(2)(i)(A) of the Code and determined in accordance with the default
rules under Section 409A. The term “specified employee” shall
have the meaning set forth in Section 409A(a)(2)(B)(1) of the Code, as
determined in accordance with the uniform methodology and procedures
adopted by the Employer and then in
effect.
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10.3
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Intent. The
provisions of this Agreement are intended to satisfy the applicable
requirements of Section 409A of the Code with respect to amounts subject
thereto and shall be performed, interpreted and construed consistent with
such intent. If any provision of this Agreement does not satisfy such
requirements or could otherwise cause the Executive to recognize income
under Section 409A of the Code, the Executive and the Company agree to
negotiate in good faith an appropriate modification to maintain, to the
maximum extent practicable, the original intent of the applicable
provision without violating the requirements of Section 409A of the Code
or otherwise causing the recognition of income
thereunder.”
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IN WITNESS WHEREOF, this Agreement is
executed effective as of the 17th day of December 2008.
LSB
INDUSTRIES, INC.
By: /s/ Jack E. Golsen
Name: Jack E. Golsen
Title: Board Chairman
(the
“Company”)
/s/ Barry H. Golsen
BARRY H. GOLSEN an individual
BARRY H. GOLSEN an individual
(the
“Executive”)
AMENDMENT
TO
NON-QUALIFIED
BENEFIT PLAN AGREEMENT
This
AMENDMENT TO NON-QUALIFIED BENEFIT PLAN AGREEMENT (the “Amendment”), is
effective December 17, 2008, by and between LSB INDUSTRIES, INC., a Delaware
corporation (the “Company”), and Barry H. Golsen, an individual (the
“Employee”).
WHEREAS,
the Company and the Employee are parties to the Non-Qualified Benefit Plan
Agreement, dated January 1, 1992 (the “Agreement”), which provides for the
payment of certain amounts to Employee in the discretion of the Company;
and
WHEREAS,
each of the Company and the Employee wish to amend the Agreement in order to
comply with the requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”);
WHEREAS,
Section 10(a) of the Agreement provides that the Agreement “may be modified or
amended by the Company in writing at any time…;”
NOW,
THEREFORE, the Agreement is hereby amended as follows:
1. Certain
Payments. Notwithstanding anything in the Agreement to the
contrary, the payment (or commencement of a series of payments) under the
Agreement of any nonqualified deferred compensation (within the meaning of
Section 409A of the Code) upon a termination of employment shall be delayed
until such time as Employee has also undergone a “separation from service” as
defined in Treas. Reg. § 1.409A-1(h), at which time such nonqualified
deferred compensation (calculated as of the date of Employee’s termination of
employment under the Agreement) shall be paid (or commence to be paid) to
Employee on the schedule set forth in Agreement as if Employee had undergone
such termination of employment (under the same circumstances) on the date of his
ultimate “separation from service”.
2. Separate
Payments. To the extent that the Agreement provides for any
payments of nonqualified deferred compensation (within the meaning of
Section 409A of the Code) to be made in installments (including, without
limitation, any severance payments), each such installment shall be deemed to be
a separate payment for purposes of Section 409A of the Code.
3. Delay of Certain Payments
for Specified Employees. Notwithstanding anything herein to
the contrary, any payment of nonqualified deferred compensation (within the
meaning of Section 409A of the Code) that is otherwise required to be made under
the Agreement to the Employee upon Employee’s separation from service shall be
delayed for such period of time as may be necessary to meet the requirements of
Section 409A(a)(2)(B)(i) of the Code (the “Delay
Period”). On the first business day following the expiration
of the Delay Period, Employee shall be paid, in a single cash lump sum, an
amount equal to the aggregate amount of all payments delayed pursuant to the
preceding sentence, and any remaining payments not so delayed shall continue to
be paid pursuant to the payment schedule set forth herein.
4. Company’s Right to
Terminate. The Employee acknowledges and agrees that the
Agreement may be terminated by the Company at any time and for any reason prior
to the death of the Employee in accordance with Section 10(b) of the
Agreement.
IN WITNESS WHEREOF, the undersigned
have executed this Amendment effective as of the date first above
written.
LSB
INDUSTRIES, INC.
By: /s/ Jack E. Golsen
Name: Jack E. Golsen
Title: Board Chairman
(the
“Company”)
/s/ Barry H. Golsen
BARRY H. GOLSEN, an individual
BARRY H. GOLSEN, an individual
(the “Employee”)