View:
Download DOC
Download PDF
Download XLS
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) October 12, 2006

LSB INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
  
1-7677
  
73-1015226
(State or other jurisdiction
of incorporation)
  
(Commission File
Number)
  
(IRS Employer
Identification No.)
   
16 South Pennsylvania, Oklahoma City, Oklahoma
(Address of principal executive offices)
  
 73107 
            (Zip Code)
         
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):

 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
Section 1 - Registrant’s Business and Operations
 
Item 1.01 Entry into a Material Definitive Agreement.

On October 12, 2006, the Company entered into an Exchange Agreement with Harold Seidel (“Seidel”), which provides for (a) the issuance to Seidel of 7.4 shares of the Company’s common stock in exchange for each share of the Company’s $3.25 Convertible Exchangeable Class C Preferred Stock, Series 2 (the “Series 2 Preferred”) beneficially owned by Seidel and (b) the waiver by Seidel of all of Seidel’s rights to all accrued and unpaid dividends on the Series 2 Preferred. Pursuant to the terms of the Exchange Agreement, the Company will issue to Seidel 74,000 shares of common stock in exchange for the 10,000 shares of Series 2 Preferred owned by Seidel.
 
As of September 30, 2006, the accrued and unpaid dividend on the Series 2 Preferred was $23.2625 per share. Accordingly, Seidel waived an aggregate of approximately $232,625.00 in accrued and unpaid dividends on the shares of Series 2 Preferred to be surrendered to the Company in accordance with the Exchange Agreement. The Exchange Agreement is subject to the Company listing the shares of common stock to be issued in connection with the Exchange Agreements on the AMEX.
 
The Exchange Agreement was solicited by and negotiated with Seidel. Neither the Company nor Seidel has paid or given, or agreed to pay or give, directly or indirectly, any commission or other remuneration for soliciting each exchange. The exchange will be conducted under the exemption from registration provided by Section 3(a)(9) the Securities Act of 1933, as amended (the “Act”). The Series 2 Preferred is registered with the Securities and Exchange Commission under the Form S-2 Registration Statement No. 33-61640, effective May 19, 1993, and, as such, the Company believes that the shares of common stock issued pursuant to Section 3(a)(9) of the Act in exchange for the Series 2 Preferred will be freely tradable by the recipient of the shares and will not be considered restricted securities under Rule 144 of the Act.
 
Upon completion of the foregoing exchange, (a) 506,222 shares of Series 2 Preferred (excluding 18,300 shares of Series 2 Preferred held by LSB in treasury) will remain issued and outstanding and (b) there will a total of approximately $11.8 million in accrued and unpaid dividends relating to such issued and outstanding Series 2 Preferred.
 
On October 13, 2006, the Company issued a press release announcing the Exchange Agreement described above, along with four other substantially similar Exchange Agreements, dated October 6 and 11, 2006, with other holders of the Company's Series 2 Preferred. A copy of the press release is attached as Exhibit 99.1 to this report. The earlier Exchange Agreements provide for the issuance by the Company of an aggregate of 646,967 shares of Series 2 Preferred, resulting in the waiver of approximately $2,033,794 of accrued and unpaid dividends on such Series 2 Preferred. The earlier Exchange Agreements are reported in the Company's Form 8-K, filed October 12, 2006. None of the accrued and unpaid dividends waived pursuant to the various Exchange Agreements or remaining on the outstanding shares of Series 2 Preferred have been declared.
 
This report is not an offer or a solicitation of an offer to sell or exchange any security.
Section 3 - Securities and Trading Markets

Item 3.02: Unregistered Sales of Equity Securities 

Pursuant to the Exchange Agreement discussed in Item 1.01 of this report, which disclosure is hereby incorporated by reference in this Item 3.02, the Company will issue a total of 74,000 shares of its common stock, par value $.10 per share, in an unregistered exchange of 10,000 shares of its Series 2 Preferred. The exchange will be conducted under the exemption from registration provided by Sections 3(a)(9) the Act. The exchange is subject to listing of the shares of common stock with the AMEX.

On October 13, 2006, the Company issued a press release reporting the foregoing exchange and previous similar exchanges by the Company, a copy of which is attached as Exhibit 99.1 to this report.
 
This report is not an offer or a solicitation of an offer to sell or exchange any security.

Section 9 - Financial Statements and Exhibits

Item 9.01: Financial Statements and Exhibits.
 
Exhibit
Number      Description
 
99.1       Press Release, dated October 13, 2006.
 
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:  October 16, 2006
                                LSB INDUSTRIES, INC.
 
                                By: /s/ Tony M. Shelby    
                                Tony M. Shelby,
                                Senior Vice President and
                                Chief Financial Officer
Exhibit 99.1 Press Release
COMPANY CONTACT:            Tony M. Shelby
                        Executive Vice President
(405) 235-4546

Investor Relations Contact:       Linda Latman (212) 836-9609
Lena Cati (212) 836-9611
The Equity Group, Inc.

October 13, 2006
                                        ;         AMEX:LXU
 
LSB INDUSTRIES, INC. ANNOUNCES
EXCHANGES OF CERTAIN PREFERRED STOCK
 
Oklahoma City, Oklahoma . . . October 13, 2006 . . . LSB Industries, Inc. (“the Company”), whose common stock is traded on the American Stock Exchange under the symbol LXU (AMEX: LXU), today announced that it has entered into Exchange Agreements with holders of 97,428 shares of LSB’s $3.25 Convertible Exchangeable Class C Preferred Stock, Series 2 (the “Series 2 Preferred”). Pursuant to the terms of the Exchange Agreements, LSB will issue an aggregate of 720,967 shares of its common stock in exchange for an aggregate of 97,428 shares of Series 2 Preferred and the holders have agreed to waive their rights to all accrued and unpaid dividends on the Series 2 Preferred being exchanged. Upon completion of these exchanges, 506,222 shares of Series 2 Preferred (excluding shares of Series 2 Preferred held by LSB in treasury) will remain issued and outstanding. The Exchange Agreements are subject to LSB listing the shares of common stock to be issued to the Series 2 Preferred holders on the American Stock Exchange pursuant to the Exchange Agreement.
 
The holders of Series 2 Preferred that entered into the Exchange Agreements waived an aggregate of approximately $2.3 million in unpaid dividends on the shares of Series 2 Preferred to be exchanged. Upon completion of the Exchange Agreements, there will remain a total of approximately $11.8 million in unpaid dividends on the Series 2 Preferred remaining outstanding.
 
The holders of the Series 2 Preferred that are parties to the Exchange Agreements separately solicited LSB in connection with the exchange, and each Exchange Agreement was negotiated with the holders. Neither LSB nor the holders of the Series 2 Preferred have paid or given, or agreed to pay or give, directly or indirectly, any commission or other remuneration for soliciting each exchange. Each of the exchanges has been, or will be, conducted under the exemption from registration provided by Sections 3(a)(9) of the Securities Act of 1933, as amended (the “Act”). The Series 2 Preferred was registered with the Securities and Exchange Commission and, as such, LSB believes that the shares of common stock issued under the Exchange Agreements will be freely tradable by their recipients and will not be considered restricted securities or contain a restrictive legend. This release is not an offer or a solicitation of an offer to sell or exchange any security.
 
LSB is a manufacturing, marketing, and engineering company with activities on a world wide basis. LSB’s principal business activities consist of the manufacture and sale of commercial and residential climate control products, the manufacture and sale of chemical products for the mining, agricultural and industrial markets, the provision of specialized engineering services, and other activities.
 
 
# # #