CUSIP NO. 5021600-10-4
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
SCHEDULE 13D
Under the Securities Exchange Act of
1934
(Amendment No.
38)
LSB INDUSTRIES, INC.
(Name of Issuer)
(Name of Issuer)
COMMON STOCK, PAR VALUE
$.10
(Title of
Class of Securities)
5021600-10-4
(CUSIP Number)
(CUSIP Number)
Jack E. Golsen
16 South
Pennsylvania
Oklahoma City, Oklahoma
73107
(405) 235-4546
(Name,
Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
November 9,
2008
(Date of
Event Which Requires Filing of this Statement)
If the
filing person has previously filed a statement on Schedule 13G to report the
acquisition which is the subject of his Schedule 13D, and is filing this
schedule because of ''
240.13d-1(e), 240.13d-1(f), or 240.13d-1(g) Rule 13d-1(b)(3) or (4), check the
following box. [ ]
Note:
Schedules filed in paper format shall include a signed original and five copies
of the schedule, including all exhibits. '240.13d-7
for other parties to whom copies are to be sent.
* The
remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed to
be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934
("Act") or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1
of 24
Pages
CUSIP NO.
5021600-10-4
|
(1)
|
Names
of Reporting Persons, I.R.S. Identification,
No.
of above Persons (entities only)
|
Jack
E. Golsen
|
|
|
(2)
|
Check
the Appropriate Box if a Member of a Group (See
Instructions)
|
(a) [
]
(b)
[X]
|
|
|
(3)
|
SEC
Use Only
|
||
|
(4)
|
Source
of Funds (See Instructions)
|
Not
applicable
|
|
|
(5)
|
Check
if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
|
||
|
(6)
|
Citizenship
or Place of Organization
|
USA
|
|
|
|
(7)
|
Sole
Voting Power
|
467,726
|
|
|
Number
of Shares
|
(8) | Shared Voting Power |
3,698,696
|
|
|
Beneficially
|
|
|
|
|
|
Owned
by Each
|
(9)
|
Sole
Dispositive Power
|
467,726
|
|
|
Reporting
Person
|
||||
|
With:
|
(10)
|
Shared
Dispositive Power
|
3,698,696
|
|
|
(11)
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
|
4,166,422
|
|
|
(12)
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
|
[X]
|
|
|
(13)
|
Percent
of Class Represented by Amount in Row (11)
|
18.79%
|
|
|
(14)
|
Type
of Reporting Person (See Instructions)
|
IN
|
Page 2
of 24
Pages
CUSIP NO.
5021600-10-4
|
(1)
|
Names
of Reporting Persons, I.R.S.
Identification
No.
of above Persons (entities only)
|
Sylvia
H. Golsen
|
|
|
(2)
|
Check
the Appropriate Box if a Member of a Group (See
Instructions)
|
(a)
[ ]
(b)
[X]
|
|
|
(3)
|
SEC
Use Only
|
||
|
(4)
|
Source
of Funds (See Instructions)
|
Not
applicable
|
|
|
(5)
|
Check
if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or
2(e)
|
||
|
(6)
|
Citizenship
or Place of Organization
|
USA
|
|
|
(7)
|
Sole
Voting Power
|
-
|
||
|
Number
of Shares
|
(8) | Shared Voting Power |
2,084,282
|
|
|
Beneficially
|
|
|
|
|
|
Owned
by Each
|
(9)
|
Sole
Dispositive Power
|
-
|
|
|
Reporting
Person
|
||||
|
With:
|
(10)
|
Shared
Dispositive Power
|
2,084,282
|
|
|
(11)
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
|
2,084,282
|
|
|
(12)
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
|
[X]
|
|
|
(13)
|
Percent
of Class Represented by Amount in Row (11)
|
9.62%
|
|
|
(14)
|
Type
of Reporting Person (See Instructions)
|
IN
|
Page 3 of
24 Pages
CUSIP NO.
5021600-10-4
|
(1)
|
Names
of Reporting Persons, I.R.S. Identification
No.
of above Persons (entities only)
|
Barry
H. Golsen
|
|
|
(2)
|
Check
the Appropriate Box if a Member of a Group (See
Instructions)
|
(a)
[ ]
(b)
[X]
|
|
|
(3)
|
SEC
Use Only
|
||
|
(4)
|
Source
of Funds (See Instructions)
|
Not
applicable
|
|
|
(5)
|
Check
if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or
2(e)
|
||
|
(6)
|
Citizenship
or Place of Organization
|
USA
|
|
|
(7)
|
Sole
Voting Power
|
307,889
|
||
|
Number
of Shares
|
(8)
|
Shared
Voting Power
|
2,868,145
|
|
|
Beneficially
|
||||
|
Owned
by Each
|
(9)
|
Sole
Dispositive Power
|
307,889
|
|
|
Reporting
Person
|
||||
|
With:
|
(10)
|
Shared
Dispositive Power
|
2,868,145
|
|
|
(11)
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
|
3,176,034
|
|
|
(12)
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
|
[X]
|
|
|
(13)
|
Percent
of Class Represented by Amount in Row (11)
|
14.40%
|
|
|
(14)
|
Type
of Reporting Person (See Instructions)
|
IN
|
Page 4
of 24
Pages
CUSIP NO.
5021600-10-4
|
(1)
|
Names
of Reporting Persons, I.R.S. Identification
No.
of above Persons (entities only)
|
Steven J. Golsen | |
|
(2)
|
Check
the Appropriate Box if a
Member of a Group (See Instructions)
|
(a)
[ ]
(b) [X]
|
|
|
(3)
|
SEC
Use Only
|
||
|
(4)
|
Source
of Funds (See Instructions)
|
Not
applicable
|
|
|
(5)
|
Check
if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
|
||
|
(6)
|
Citizenship
or Place of Organization
|
USA
|
|
|
(7)
|
Sole
Voting Power
|
275,165
|
||
|
|
||||
|
Number
of Shares
|
(8)
|
Shared
Voting Power
|
544,954
|
|
|
Beneficially
|
||||
|
Owned
by Each
|
(9)
|
Sole
Dispositive Power
|
275,165
|
|
|
Reporting
Person
|
|
|||
|
With:
|
(10)
|
Shared
Dispositive Power
|
544,954
|
|
|
(11)
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
|
820,119
|
|
|
(12)
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
|
[ X
]
|
|
|
(13)
|
Percent
of Class Represented by Amount in Row (11)
|
3.85%
|
|
|
(14)
|
Type
of Reporting Person (See Instructions)
|
IN
|
Page
5 of 24
Pages
CUSIP NO.
5021600-10-4
|
(1)
|
Names
of Reporting Persons, I.R.S.
Identification
No.
of above Persons (entities only)
|
Linda
F. Rappaport
|
|
|
(2)
|
Check
the Appropriate Box if a Member of a Group (See
Instructions)
|
(a)
[ ]
(b)
[X]
|
|
|
(3)
|
SEC
Use Only
|
||
|
(4)
|
Source
of Funds (See Instructions)
|
PF
|
|
|
(5)
|
Check
if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or
2(e)
|
||
|
(6)
|
Citizenship
or Place of Organization
|
USA
|
|
|
(7)
|
Sole
Voting Power
|
66,400
|
||
|
|
||||
|
Number
of Shares
|
(8)
|
Shared
Voting Power
|
698,987
|
|
| Beneficially | ||||
|
Owned
by Each
|
(9)
|
Sole
Dispositive Power
|
0
|
|
|
Reporting
Person
|
|
|||
|
With:
|
(10)
|
Shared
Dispositive Power
|
735,387
|
|
|
(11)
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
|
765,387
|
|
|
(12)
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
|
[X]
|
|
|
(13)
|
Percent
of Class Represented by Amount in Row (11)
|
3.59%
|
|
|
(14)
|
Type
of Reporting Person (See Instructions)
|
IN
|
Page 6
of 24
Pages
CUSIP NO.
5021600-10-4
|
(1)
|
Names
of Reporting Persons, I.R.S. Identification
No.
of above Persons (entities only)
|
Golsen
Family, L.L.C.
20-8234753
|
|
|
(2)
|
Check
the Appropriate Box if a Member of a Group (See
Instructions)
|
(a)
[ ]
(b)
[X]
|
|
|
(3)
|
SEC
Use Only
|
||
|
(4)
|
Source
of Funds (See Instructions)
|
Not
applicable
|
|
|
(5)
|
Check
if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or
2(e)
|
||
|
(6)
|
Citizenship
or Place of Organization
|
Oklahoma
|
|
|
(7)
|
Sole
Voting Power
|
0
|
||
|
|
||||
|
Number
of Shares
|
(8)
|
Shared
Voting Power
|
2,084,282
|
|
|
Beneficially
|
||||
|
Owned
by Each
|
(9)
|
Sole
Dispositive Power
|
0
|
|
|
Reporting
Person
|
|
|||
|
With:
|
(10)
|
Shared
Dispositive Power
|
2,084,282
|
|
|
(11)
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
|
2,084,282
|
|
|
(12)
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
|
[X]
|
|
|
(13)
|
Percent
of Class Represented by Amount in Row (11)
|
9.62%
|
|
|
(14)
|
Type
of Reporting Person (See Instructions)
|
00
|
Page 7
of 24
Pages
CUSIP NO.
5021600-10-4
|
(1)
|
Names
of Reporting Persons, I.R.S.
Identification
No.
of above Persons (entities only)
|
SBL,
L.L.C. |
|
|
(2)
|
Check
the Appropriate Box if a Member of a Group (See
Instructions)
|
(a)
[ ]
(b)
[X]
|
|
|
(3)
|
SEC
Use Only
|
||
|
(4)
|
Source
of Funds (See Instructions)
|
WC,
BK
|
|
|
(5)
|
Check
if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
|
||
|
(6)
|
Citizenship
or Place of Organization
|
Oklahoma
|
|
|
(7)
|
Sole
Voting Power
|
-
|
||
|
|
||||
|
Number
of Shares
|
(8)
|
Shared
Voting Power
|
2,884,987
|
|
|
Beneficially
|
||||
|
Owned
by Each
|
(9)
|
Sole
Dispositive Power
|
-
|
|
|
Reporting
Person
|
|
|||
|
With:
|
(10)
|
Shared
Dispositive Power
|
2,884,987
|
|
|
(11)
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
|
2,884,987
|
|
|
(12)
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
|
[X]
|
|
|
(13)
|
Percent
of Class Represented by Amount in Row (11)
|
12.91%
|
|
|
(14)
|
Type
of Reporting Person (See Instructions)
|
CO
|
Page 8
of 24
Pages
CUSIP NO.
5021600-10-4
|
(1)
|
Names
of Reporting Persons, I.R.S.
Identification
No.
of above Persons (entities only)
|
Golsen
Petroleum Corporation
|
|
|
(2)
|
Check
the Appropriate Box if a Member of a Group (See
Instructions)
|
(a)
[ ]
(b)
[X]
|
|
|
(3)
|
SEC
Use Only
|
||
|
(4)
|
Source
of Funds (See Instructions)
|
Not
Applicable
|
|
|
(5)
|
Check
if Disclosure of Legal Proceedings
is Required Pursuant to Items 2(d) or 2(e)
|
||
|
(6)
|
Citizenship
or Place of Organization
|
Oklahoma
|
|
|
(7)
|
Sole
Voting Power
|
-
|
||
|
|
||||
|
Number
of Shares
|
(8)
|
Shared
Voting Power
|
417,288
|
|
|
Beneficially
|
||||
|
Owned
by Each
|
(9)
|
Sole
Dispositive Power
|
-
|
|
|
Reporting
Person
|
|
|||
|
With:
|
(10)
|
Shared
Dispositive Power
|
417,288
|
|
|
(11)
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
|
417,288
|
|
|
(12)
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
|
[
]
|
|
|
(13)
|
Percent
of Class Represented by Amount in Row (11)
|
1.96%
|
|
|
(14)
|
Type
of Reporting Person (See Instructions)
|
CO
|
Page 9
of 24
Pages
CUSIP NO.
5021600-10-4
Introduction
This
statement constitutes Amendment No.38 to the Schedule 13D dated October 7, 1985,
as amended (the "Schedule 13D"), relating to the common stock, par value $.10 a
share ("Common Stock") of LSB Industries, Inc. (the "Company"). All
terms not otherwise defined herein shall have the meanings ascribed in the
Schedule 13D.
This
Schedule 13D is reporting matters with respect to the following reporting
persons:
|
|
•
|
Jack
E. Golsen (Chief Executive Officer and Chairman of the Board of the
Company);
|
|
|
•
|
Sylvia
H. Golsen;
|
|
|
•
|
Barry
H. Golsen (President and member of the Board of Directors of the
Company);
|
|
|
•
|
Steven
J. Golsen (President of certain subsidiaries of the
Company);
|
|
|
•
|
Linda
F. Rappaport, an individual;
|
|
|
•
|
Golsen
Family, L.L.C., an Oklahoma limited liability company
(“GFLLC”).
|
|
|
•
|
SBL,
L.L.C. ("SBL"); and
|
|
|
•
|
Golsen
Petroleum Corporation ("GPC"), an Oklahoma corporation and
wholly-owned subsidiary of SBL.
|
Jack and
Sylvia Golsen are husband and wife. Barry Golsen, Steven Golsen, and
Linda Rappaport are the children of Jack and Sylvia Golsen. All of
the outstanding stock of SBL and all membership interests in GFLLC are
beneficially owned, directly or indirectly, by Jack and Sylvia Golsen and their
children. Jack and Barry Golsen are the sole managers of SBL and the
sole members of the Board of Directors and the officers of GPC. Jack
and Sylvia Golsen are the sole managers of GFLLC.
This
Amendment No.38 is being filed as a result of a change in the facts contained in
the Schedule 13D, as described below.
|
1.
|
Linda
F. Rappaport is included as a reporting person under this Schedule 13D and
is filing as a reporting person with respect to this Schedule
13D.
|
|
2.
|
As
of December 31, 2008, the Golsen Group’s aggregate percentage ownership of
all outstanding Common Stock of
|
Page 10
of 24
Pages
CUSIP NO.
5021600-10-4
|
|
the
Company is approximately 23.7%, an increase of approximately 1.4% since
the filing of Amendment No. 37 to this Schedule 13D as a result of
(a) the addition of Linda F. Rappaport as a member of the Golsen
Group, (b) the purchase by members of the Golsen Group of an
aggregate of 150,000 shares of Common Stock, and (c) the
purchase of $5 million principal amount of the Company’s 5.5%
Convertible Senior Subordinated Debentures Due 2012, which are convertible
into 182,000 shares of common
stock.
|
|
3.
|
Reference
is made to Item 5(c) of this Amendment No.38 for a disclosure of
transactions in the Common Stock that were effected by certain reporting
persons in the 60 days prior to the filing of this Amendment
38.
|
|
4.
|
The
membership percentages in GFLLC have been adjusted to correctly reflect
the ownership in GFLLC held by Jack and Sylvia Golsen and their
children. The membership percentages reported previously
misstated the correct percentages by approximately 0.23% to
0.35%.
|
Item
1. Security and
Issuer.
Item 1 of
this Schedule 13D is unchanged.
Item
2. Identity and
Background.
Item 2 of
this Schedule 13D is unchanged, except Linda Rappaport joined the reporting
group on November 9, 2008. The following is Ms. Rappaport’s
background information:
|
(a)
|
The
principal business office of Ms. Rappaport is Designer Rugs & Import
Group, 333 W. Wilshire Blvd., Oklahoma City, Oklahoma
73116.
|
|
(b)
|
Ms.
Rappaport’s principal occupation is owner and executive of Designer Rugs
& Import Group, 333 W. Wilshire Blvd., Oklahoma City, Oklahoma
73116
|
|
(c)
|
During
the last five years, Ms. Rappaport has not been convicted in a criminal
proceeding (excluding traffic violations or similar
misdemeanors).
|
|
(d)
|
During
the last five years, Ms. Rappaport has not been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment,
decree, or final order enjoining
future
|
Page 11
of 24
Pages
CUSIP NO.
5021600-10-4
|
|
violations
of, or prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such
laws.
|
|
(e)
|
Ms.
Rappaport is a citizen of the United States of
America.
|
Item
3. Source and Amount of Funds
or Other Consideration.
This Item
3 is not applicable to the agreements and transactions described in Items 5 and
6 of this Amendment 38, except as follows:
|
(a)
|
In
the 60 days prior to the filing of this Amendment No. 38, (a) SBL
purchased an aggregate of 120,000 shares of Common Stock for the aggregate
purchase price of $858,297, which was funded using working capital and (b)
Linda Rappaport purchased 30,000 shares of Common Stock for an aggregate
purchase price of $213,263, which was funded using personal
funds.
|
|
(b)
|
On
November 10, 2008, SBL purchased $4 million principal amount of the
Company’s 5.5% Convertible Senior Subordinated Debentures Due 2012 for the
purchase price of $2,880,000, plus accrued interest of
$80,666. Of the total amount paid, $460,666 was funded using
SBL’s working capital and $2,500,000 funded by a loan from The
Bank of The West, the collateral for which is 827,936 shares of Common
Stock owned by SBL. See Item 6 for a description of the pledge
agreement.
|
|
(c)
|
On
November 10, 2008, Linda Rappaport purchased $1 million principal amount
of the Company’s 5.5% Convertible Senior Subordinated Debentures Due 2012
for the purchase price of $720,000, plus accrued interest of
$20,167. The amount paid was funded using personal
funds.
|
Item
4. Purpose of
Transaction.
The
reporting persons do not presently have any plans or proposals required to be
reported under Item 4 of this Schedule 13D, except as set forth
below:
Pledge
Agreement.
Page 12
of 24
Pages
CUSIP NO.
5021600-10-4
See Item
6 of this Amendment No. 38 for a discussion of the security agreement covering
827,397 shares of Common Stock owned by SBL, which discussion is incorporated by
reference in this Item 4.
Item
5. Interest in Securities of
the Issuer.
|
(a)
|
The
following table sets forth as of the filing date of this Amendment No. 38
the aggregate number and percentage of the class of Common Stock of the
Company identified pursuant to Item 1 beneficially owned by each person
named in Item 2:
|
|
|
Person
|
Amount (10) (11) | Percent (12) | |
| Jack E. Golsen | 4,166,422 (2) | 18.79% | ||
| Sylvia H. Golsen |
2,084,282
(3)
|
9.62% | ||
| Barry H. Golsen |
3,176,034
(4)
|
14.40% | ||
| Steven J. Golsen | 820,119 (5) | 3.85% | ||
| Linda F. Rappaport | 765,387 (6) | 3.59% | ||
| Golsen Family, L.L.C. (1) |
2,084,282
(7)
|
9.62% | ||
| SBL (1) |
2,884,987
(8)
|
12.91% | ||
| GPC (1) | 417,288 (9) | 1.96% |
____________________
|
|
(1)
|
The
membership interests in GFLLC are owned by Jack Golsen through his
revocable trust (45.588%), Sylvia Golsen through her revocable trust
(45.588%), Barry Golsen (2.9413%), Steven Golsen (2.9413%), and Linda
Rappaport (2.9413%). Jack and Sylvia Golsen are the managers of
GFLLC, and as a result share voting and dispositive power over the
Company’s securities owned by GFLLC. SBL is wholly-owned by
GFLLC (49% owner), Barry Golsen (17% owner), Steven Golsen (17% owner) and
Linda Rappaport (17% owner). GPC is a wholly owned subsidiary of
SBL. Jack Golsen and Barry Golsen are the managers of SBL and
the directors and executive officers of GPC. Barry Golsen, Steven Golsen
and Linda Rappaport are the children of Jack and Sylvia Golsen, husband
and wife.
|
|
|
(2)
|
The
amount shown is comprised of the
following:
|
Page 13
of 24
Pages
CUSIP NO.
5021600-10-4
|
|
(a)
|
787,309
shares owned by GFLLC as described in footnote (7), over which the
reporting person shares investment and dispositive power with Sylvia
Golsen;
|
|
|
(b)
|
2,844,987
shares beneficially owned by SBL and GPC as described in footnotes (8) and
(9), respectively, over which the reporting person shares investment and
dispositive power with
Barry Golsen;
|
|
|
(c)
|
4,000
shares issuable upon conversion of a promissory note, over which the
reporting person has sole voting and dispositive
power;
|
|
|
(d)
|
200,406
shares owned of record by eight trusts for the benefit of the
grandchildren and great grandchildren of Jack Golsen, over which Jack
Golsen serves as the sole trustee with voting and dispositive power over
the Company’s securities held in the
trusts;
|
|
|
(e)
|
263,320
shares owned of record by the Barry H. Golsen 2007 Irrevocable Trust, the
Steve J. Golsen 2007 Irrevocable Trust, and the Linda F. Rappaport
2007 Irrevocable Trust, over which Jack Golsen serves as the sole
trustee with voting and dispositive power over the Company’s securities
held in the trusts; and
|
|
|
(f)
|
30,000
shares owned by Linda Rappaport and 36,400 shares that Linda Rappaport may
acquire upon the conversion of $1 million principal amount of the
Company’s 5.5% Convertible Senior Subordinated Debentures Due 2012 owned
by her, the dispositive power and voting power of which is shared with
Jack Golsen. Jack Golsen has no pecuniary interest in the
shares beneficially owned by Linda
Rappaport.
|
|
(3)
|
The
amount shown is comprised of (a) 787,309 shares beneficially owned by
GFLLC as described in footnote (7), over which the reporting person shares
dispositive and investment power with Jack Golsen, and (b) 1,296,973
shares representing the reporting person’s percentage ownership of the
shares beneficially owned by SBL and GPC as described in footnotes (8) and
(9), respectively, as a result of the reporting person’s ownership in
GFLLC. The amount shown doesnot include,
and the reporting person disclaims beneficial ownership of the shares
listed in
|
Page 14
of 24
Pages
CUSIP NO.
5021600-10-4
|
|
footnote
(2) above as beneficially owned by Jack Golsen (except the shares noted in
the preceding sentence).
|
|
|
(4)
|
The
amount shown is comprised of the
following:
|
|
|
(a)
|
296,639
shares held directly;
|
|
|
(b)
|
11,250
shares issuable upon exercise of stock
options;
|
|
|
(c)
|
23,157
shares representing the reporting person’s percentage ownership of the
shares owned directly by GFLLC and that GFLLC has the right to acquire as
described in footnote (7) as a result of the reporting person’s ownership
in GFLLC; and
|
|
|
(d)
|
2,844,987
shares beneficially owned by SBL and GPC as described in footnotes (8) and
(9), respectively, over which the reporting person shares investment and
dispositive control with Jack
Golsen.
|
|
|
The
amount shown does not include (i)
533 shares that Barry Golsen's wife owns, in which Barry Golsen disclaims
beneficial ownership and (ii) 89,440 shares owned of record by the Barry
H. Golsen 2007 Irrevocable Trust, of which Barry Golsen is the primary
beneficiary, but of which Barry Golsen has no voting or dispositive
control.
|
|
|
(5)
|
The
amount shown is comprised of the
following:
|
|
|
(a)
|
263,915
shares held directly;
|
|
|
(b)
|
11,250
shares issuable upon exercise of stock
options;
|
|
|
(c)
|
61,306
shares representing the reporting person’s percentage ownership of the
shares owned directly by GFLLC and that GFLLC has the right to acquire as
described in footnote (7) and the reporting person’s percentage ownership
in the shares held by SBL and GPC as a result of the reporting person’s
ownership in GFLLC; and
|
|
|
(d)
|
483,648
shares representing the reporting person’s percentage ownership of the
shares beneficially owned by SBL and GPC as described in footnotes (8) and
(9), respectively, as a result of the reporting person’s ownership in
SBL.
|
Page 15
of 24
Pages
CUSIP NO.
5021600-10-4
|
|
The
amount shown does not include
84,440 shares owned of record by the Steven J. Golsen 2007 Irrevocable
Trust, of which Steven Golsen is the primary beneficiary, but of which
Steven Golsen has no voting or dispositive
control.
|
|
|
(6)
|
The
amount shown is comprised of the
following:
|
|
|
(a)
|
36,400
shares issuable upon the conversion of $1 million principal amount of
the Company’s 5.5% Convertible Senior Subordinated Debentures Due 2012,
the dispositive and voting power of which is shared with Jack
Golsen;
|
|
|
(b)
|
30,000
shares owned directly, the dispositive and voting power of which is shared
with Jack Golsen;
|
|
|
(c)
|
61,306
shares representing the reporting person’s percentage ownership of the
shares owned directly by GFLLC and that GFLLC has the right to acquire as
described in footnote (7) and the reporting person’s percentage ownership
in the shares held by SBL and GPC as a result of the reporting person’s
ownership in GFLLC;
|
|
|
(d)
|
483,648
shares representing the reporting person’s percentage ownership of the
shares beneficially owned by SBL and GPC as described in footnotes (8) and
(9), respectively, as a result of the reporting person’s ownership in SBL;
and
|
|
|
(e)
|
154,033
shares that the reporting person’s spouse owns, for which the reporting
person disclaims beneficial
ownership.
|
|
|
The
amount shown does not include 89,440 shares owned of record by the Linda
F. Rappaport 1992 Trust, of which Linda F. Rappaport is the primary
beneficiary, but of which Linda F. Rappaport has no voting or dispositive
control.
|
|
|
(7)
|
The
amount shown is comprised of the
following:
|
|
|
(a)
|
653,976
shares owned directly;
|
|
|
(b)
|
133,333 shares issuable upon the conversion of 4,000 shares of the
Company’s Series 2 Preferred; and
|
|
|
(c)
|
1,296,973
shares representing GFLLC's beneficial ownership in the shares held by SBL
and GPC as a result of the GFLLC's ownership in
SBL.
|
Page 16
of 24
Pages
CUSIP NO.
5021600-10-4
The amount of such shares shown as beneficially owned by each reporting
person is based on the reporting person’s proportionate ownership in GFLLC, as
described in footnote (1) to this table, except Jack and Sylvia Golsen, as
managers of GFLLC possessing voting and dispositive power over such shares,
report beneficial ownership of all shares beneficially owned by GFLLC.
|
|
(8)
|
The
amount shown is comprised of the
following:
|
|
|
(a)
|
1,632,099
shares owned directly;
|
|
(b)
|
250,000
shares issuable upon the conversion of 1,000,000 shares of the
Company's Series D Preferred;
|
|
(c)
|
400,000
shares issuable upon the conversion of 12,000 shares of the Company's
Series B Preferred;
|
|
|
(d)
|
145,600
issuable shares upon the conversion of $4 million principal amount of
the Company’s 5.5% Convertible Senior Subordinated Debentures Due 2012;
and
|
|
|
(e)
|
417,288
shares beneficially owned by SBL's wholly owned subsidiary, GPC, as
described in footnote (9).
|
The
amount of such shares shown as beneficially owned by each reporting person is
based on the reporting person’s proportionate ownership in SBL (whether direct
ownership in SBL or indirect ownership in SBL through ownership in GFLLC), as
described in footnote (1) to this table, except Jack and Barry Golsen, as the
managers SBL possessing voting and dispositive power over such shares, report
beneficial ownership of all such shares.
|
|
(9)
|
The
amount shown is comprised of (a) 283,955 shares owned directly, and (b)
133,333 shares that may be acquired upon conversion of 4,000 shares of the
Company's Series B Preferred Stock.
|
|
|
(10)
|
Holders
of the Series B Preferred are entitled to one vote per share, and holders
of the Series D Preferred are entitled to .875 votes per
share. Both vote together with holders of Common
Stock. The amounts and percentages set forth in the table
reflect only the voting power of Common Stock into which the Series B
Preferred and the Series D Preferred are
convertible.
|
Page 17
of 24
Pages
CUSIP NO.
5021600-10-4
|
|
(11)
|
Jack
Golsen, Sylvia Golsen, Barry Golsen, Steven Golsen, and Linda Rappaport
each disclaims beneficial ownership of the shares of Common Stock
beneficially owned by the other, as described in footnotes (2),
(3), (4), (5), and (6), respectively, except as stated in such
footnotes.
|
|
|
(12)
|
The
percentage ownership of each reporting person is based on 21,109,812
shares of Common Stock outstanding, as of December 31,
2008. Shares of Common Stock of the Company not outstanding,
but which may be acquired by a reporting person during the next 60 days
under options, warrants, rights or conversion privileges, are considered
to be outstanding only for the purpose of computing the percentage of the
class for such reporting person, but are not deemed to be outstanding for
the purpose of computing the percentage of the class by any other
person.
|
|
|
(b)
|
The
following table sets forth, as of the filing date of this Amendment No. 38
for each person and entity identified under paragraph (a), above, the
number of shares of Common Stock as to which the person and entity has (i)
the sole power to vote or direct the voting, (ii) shared power to vote or
direct the voting, (iii) the sole power to dispose or to direct the
disposition, or (iv) shared power to dispose or to direct the
disposition:
|
|
|
Person or
Entity
|
Sole
Voting
and Power
of
Disposition
|
Shared
Voting
and
Power of
Disposition
|
|
| Jack E. Golsen | 467,726 (2) | 3,698,696 (2) | ||
| Sylvia H. Golsen | None | 2,084,282 (3) | ||
| Barry H. Golsen | 307,889 (4) |
2,868,145
(4)
|
||
| Steven J. Golsen | 275,165 (5) | 544,954 (5) | ||
| Linda F. Rappaport | 66,400 (6) | 698,987 (6) | ||
| Golsen Family, L.L.C. (1) | None | 2,084,282 (7) | ||
| SBL (1) | None | 2,884,987 (8) | ||
| GPC (1) | None | 417,288 (9) | ||
Page 18
of 24
Pages
CUSIP NO.
5021600-10-4
____________________
|
|
(1)
|
See
footnote (1) under paragraph (a) of this Item
5.
|
|
|
(2)
|
See
footnote (2), (10), and (11) under paragraph (a) of this Item 5.
|
|
|
(3)
|
See
footnotes (3), (10), and (11) under paragraph (a) of this Item
5
|
|
|
(4)
|
See
footnotes (4), (10), and (11) under paragraph (a) of this Item
5.
|
|
|
(5)
|
See
footnotes (5), (10), and (11) under paragraph (a) of this Item
5.
|
|
|
(6)
|
See
footnotes (6), (10), and (11) under paragraph (a) of this Item 5.
|
|
|
(7)
|
See
footnote (7) and (10) under paragraph (a) of this Item
5.
|
|
|
(8)
|
See
footnote (8) and (10) under paragraph (a) of this Item
5.
|
|
|
(9)
|
See
footnote (9) and (10) under paragraph (a) of this Item
5.
|
|
(c)
|
During
the 60 days prior to the filing of this Amendment No. 38 to this Schedule
13D, the following reporting persons effected transactions in the Common
Stock:
|
|
(i)
|
SBL
purchased 120,000 shares of Common Stock on the New York Stock Exchange,
for a total purchase price of $858,297, as
follows:
|
|
Security
|
Purchase Date
|
Number
of
Shares |
Price
|
|
Common
Stock
|
11/13/2008
|
100
|
$7.07
|
|
Common
Stock
|
11/13/2008
|
5,000
|
$7.08
|
|
Common
Stock
|
11/13/2008
|
1,500
|
$7.10
|
|
Common
Stock
|
11/13/2008
|
3,400
|
$7.46
|
|
Common
Stock
|
11/13/2008
|
10,000
|
$7.47
|
|
Common
Stock
|
11/13/2008
|
3,500
|
$7.50
|
|
Common
Stock
|
11/13/2008
|
717
|
$7.57
|
|
Common
Stock
|
11/13/2008
|
1,200
|
$7.79
|
Page 19
of 24
Pages
CUSIP NO.
5021600-10-4
|
Security
|
Purchase Date
|
Number
of
Shares |
Price
|
|
Common
Stock
|
11/13/2008
|
4,200
|
$7.80
|
|
Common
Stock
|
11/17/2008
|
100
|
$7.43
|
|
Common
Stock
|
11/17/2008
|
500
|
$7.44
|
|
Common
Stock
|
11/17/2008
|
100
|
$7.46
|
|
Common
Stock
|
11/17/2008
|
900
|
$7.47
|
|
Common
Stock
|
11/17/2008
|
900
|
$7.48
|
|
Common
Stock
|
11/17/2008
|
200
|
$7.49
|
|
Common
Stock
|
11/17/2008
|
2,655
|
$7.50
|
|
Common
Stock
|
11/20/2008
|
2,500
|
$7.34
|
|
Common
Stock
|
11/20/2008
|
10,028
|
$7.38
|
|
Common
Stock
|
11/20/2008
|
1,500
|
$7.39
|
|
Common
Stock
|
11/20/2008
|
1,000
|
$7.40
|
|
Common
Stock
|
11/21/2008
|
200
|
$6.67
|
|
Common
Stock
|
11/21/2008
|
9,800
|
$6.70
|
|
Common
Stock
|
12/02/2008
|
36,700
|
$7.00
|
|
Common
Stock
|
12/04/2008
|
300
|
$6.88
|
|
Common
Stock
|
12/04/2008
|
300
|
$6.89
|
|
Common
Stock
|
12/04/2008
|
200
|
$6.90
|
|
Common
Stock
|
12/04/2008
|
100
|
$6.91
|
|
Common
Stock
|
12/04/2008
|
100
|
$6.92
|
|
Common
Stock
|
12/04/2008
|
500
|
$6.93
|
|
Common
Stock
|
12/04/2008
|
300
|
$6.94
|
|
Common
Stock
|
12/04/2008
|
100
|
$6.95
|
|
Common
Stock
|
12/04/2008
|
600
|
$6.96
|
|
Common
Stock
|
12/04/2008
|
743
|
$6.97
|
|
Common
Stock
|
12/04/2008
|
400
|
$6.98
|
|
Common
Stock
|
12/04/2008
|
100
|
$6.99
|
|
Common
Stock
|
12/04/2008
|
9,025
|
$7.00
|
|
Common
Stock
|
12/05/2008
|
10,532
|
$7.00
|
|
(ii)
|
On
November 10, 2008, SBL purchased $4 million principal amount of the
Company’s 5.5% Convertible Senior Subordinated Debentures Due 2012, which
are convertible into 145,600 shares of Common Stock, in a
privately
|
Page 20
of 24
Pages
CUSIP NO.
5021600-10-4
|
|
negotiated
transaction at a purchase price of $2,880,000, plus accrued interest of
$80,666.
|
|
(iii)
|
On
November 10, 2008, Linda Rappaport purchased $1 million principal amount
of the Company’s 5.5% Convertible Senior Subordinated Debentures Due 2012,
which are convertible into 36,400 shares of Common Stock, in a privately
negotiated transaction at a purchase price of $720,000, plus accrued
interest of $20,167.
|
|
(iv)
|
On
December 30, 2008, Linda Rappaport purchased 30,000 shares of Common Stock
on the New York Stock Exchange for a total purchase price of $213,263, as
follows:
|
|
Security
|
Purchase Date
|
Number
of
Shares |
Price
|
|
Common
Stock
|
11/29/2008
|
600
|
$7.06
|
|
Common
Stock
|
11/29/2008
|
1,740
|
$7.07
|
|
Common
Stock
|
11/29/2008
|
900
|
$7.08
|
|
Common
Stock
|
11/29/2008
|
14,057
|
$7.09
|
|
Common
Stock
|
11/29/2008
|
100
|
$7.10
|
|
Common
Stock
|
11/29/2008
|
601
|
$7.13
|
|
Common
Stock
|
12/5/2008
|
12,002
|
$7.14
|
(d) See
Item 6 below.
(e) Not
applicable.
|
Item
6.
|
Contracts,
Agreements, Underwritings or Relationships With
Respect to Securities of the
Issuer.
|
|
|
Item
6 of the Schedule 13D is unchanged, except as set forth
below.
|
Pledge
Agreement.
|
|
On
November 11, 2008, SBL pledged 827,397 shares of Common Stock pursuant to
a Security Agreement, dated the same date (the “Security Agreement”) to
secure a promissory note, dated the same date, executed by SBL in favor of
The Bank of The West. The promissory note has an original
principal amount of approximately $2.5 million and a term of five
years. In addition to standard default and similar provisions
contained in the
|
Page 21
of 24
Pages
CUSIP NO.
5021600-10-4
Security
Agreement, lender retains the right to all dividends paid in connection with the
collateral.
|
Item
7.
|
Materials to be Filed
as Exhibits.
|
|
24.1
|
Powers
of Attorney executed by Barry H. Golsen, Steven J. Golsen, and Sylvia H.
Golsen are filed as Exhibit 24.1 to Amendment No. 33 to this Schedule 13D
and are incorporated herein by
reference.
|
|
24.2
|
Power
of Attorney, dated December 29, 2008, executed by Linda F.
Rappaport.
|
|
99.1
|
Joint
Filing Statement, dated September 19, 2007, is filed as Exhibit 99.1 to
Amendment No. 34 and is incorporated herein by
reference.
|
|
99.2
|
Joint
Filing Statement, dated December 29, 2008, executed by Linda F.
Rappaport.
|
|
99.3
|
Convertible
Note between the Company and Jack E. Golsen filed as Exhibit (a) to the
original Schedule 13D and is incorporated herein by
reference.
|
|
99.4
|
Issuer's
Proxy Statement dated July 14, 1986 setting forth the terms of the
Company's Series B 12% Cumulative Convertible Preferred Stock is filed as
Exhibit 1 to Amendment No. 1 to the Schedule 13D and is incorporated
herein by reference.
|
|
99.5
|
Stacy
L. Rappaport 2007 Irrevocable Trust Agreement, dated January 15, 2007, is
filed as Exhibit No. 99.4 to Amendment No. 34 and is incorporated herein
by reference. The Joshua B. Golsen 2007 Irrevocable Trust
Agreement, Adam Z. Golsen 2007 Irrevocable Trust Agreement, Amy G.
Rappaport 2007 Irrevocable Trust Agreement, Lori R. Rappaport 2007
Irrevocable Trust Agreement, Michelle L. Golsen 2007 Irrevocable Trust
Agreement, and Preston Ayden Mattingly 2007 Irrevocable Trust Agreement,
each dated January 15, 2007, are substantially similar to the Stacy L.
Rappaport 2007 Irrevocable Trust Agreement, except each trust is named for
primary beneficiary of such trust, and copies of the same will be supplied
to the Commission upon request.
|
|
99.6
|
Barry
H. Golsen 2007 Irrevocable Trust Agreement, dated January 15, 2007, is
filed as Exhibit 99.5 to Amendment No. 34 and is incorporated herein by
reference. The Steven J. Golsen 2007 Irrevocable Trust
Agreement and Linda F. Rappaport 2007 Irrevocable Trust Agreement, each
dated January 15, 2007, are substantially similar to the Barry H. Golsen
2007 Irrevocable Trust Agreement, except each
trust
|
Page 22
of 24
Pages
CUSIP NO.
5021600-10-4
|
|
is
named for primary beneficiary of such trust, and copies of the same will
be supplied to the Commission upon
request.
|
|
99.7
|
Shareholder's
Agreement, effective December 1, 1995, between Sylvia Golsen and SBL
Corporation is filed as Exhibit 22 to Amendment No. 24 and is incorporated
herein by reference.
|
|
99.8
|
Shareholder's
Agreement, effective December 1, 1995, among Barry H. Golsen, Sylvia
Golsen and SBL Corporation is filed as Exhibit 99.7 to Amendment No. 33
and is incorporated herein by reference.
|
|
99.9
|
Shareholder's
Agreement, effective December 1, 1995, among Steven J. Golsen, Sylvia
Golsen and SBL Corporation. The Shareholder's
Agreement is substantially similar to the Shareholder's Agreement filed as
Exhibit 99.7 hereto and a copy of the same will be supplied to the
Commission upon request.
|
|
99.10
|
Shareholder's
Agreement, effective December 1, 1995, among Linda F. Rappaport, Sylvia
Golsen and SBL Corporation. The Shareholder's
Agreement is substantially similar to the Shareholder's Agreement filed as
Exhibit 99.7 hereto and a copy of the same will be supplied to the
Commission upon request.
|
|
99.11
|
Rule
10B5-1 Sales Plan, dated March 15, 2008, between SBL, L.L.C. and Capital
West Securities, Inc. is filed as Exhibit 99.10 to Amendment No. 37 and is
incorporated herein by reference.
|
|
99.12
|
Security
Agreement, dated November 7, 2008, executed by SBL, L.L.C. in favor of The
Bank Of The West.
|
Page 23
of 24
Pages
CUSIP NO.
5021600-10-4
SIGNATURE
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
DATED: January
12, 2009
/s/ Jack E. Golsen
Jack E.
Golsen
/s/ Sylvia H.
Golsen *
Sylvia H.
Golsen
/s/ Barry H. Golsen *
Barry H.
Golsen
/s/ Steven J.
Golsen *
Steven J.
Golsen
/s/ Linda F.
Rappaport *
Linda F.
Rappaport
*Executed
by Jack E. Golsen pursuant to Power of Attorney
GOLSEN
FAMILY, L.L.C.
By: /s/ Jack E. Golsen
Jack E.
Golsen, Manager
SBL
LLC
By: /s/ Jack E. Golsen
Jack E.
Golsen, Manager
GOLSEN
PETROLEUM CORPORATION
By: /s/ Jack E. Golsen
Jack E.
Golsen, President
Page 24
of 24
Pages
POWER OF
ATTORNEY
Know all
by these presents, that the undersigned hereby constitutes and appoints JACK E.
GOLSEN, signing singly, the undersigned’s true and lawful attorney-in-fact
to:
|
(1)
|
execute
for and on behalf of the undersigned Forms 3, 4, and 5 and Schedule 13D
and any and all amendments thereto, in accordance with Sections 16(a) and
13(d) of the Securities Exchange Act of 1934 and the rules thereunder, and
any other forms or reports the undersigned may be required to file in
connection with the undersigned’s ownership, acquisition, or disposition
of securities of the Company;
|
|
(2)
|
do
and perform any and all acts for and on behalf of the undersigned which
may be necessary or desirable to complete and execute any such Forms 3, 4,
or 5 or Schedule 13D and any and all amendments thereto, or other form or
report, and timely file such form or report with the United States
Securities and Exchange Commission and any stock exchange or similar
authority; and
|
|
(3)
|
take
any other action of any type whatsoever in connection with the foregoing
which, in the opinion of such attorney-in-fact, may be of benefit to, in
the best interest of, or legally required by, the undersigned, it being
understood that the documents executed by such attorney-in-fact on behalf
of the undersigned pursuant to this Power of Attorney shall be in such
form and shall contain such terms and conditions as such attorney-in-fact
may approve in such attorney-in-fact’s
discretion.
|
The
undersigned hereby grants to each such attorney-in-fact full power and authority
to do and perform any and every act and thing whatsoever requisite, necessary,
or proper to be done in the exercise of any of the rights and powers herein
granted, as fully to all intents and purposes as the undersigned might or could
do if personally present, with full power of substitution or revocation, hereby
ratifying and confirming all that such attorney-in-fact, or such
attorney-in-fact’s substitute or substitutes, shall lawfully do or cause to be
done by virtue of this power of attorney and the rights and powers herein
granted. The undersigned acknowledges that the foregoing
attorney-in-fact, in serving in such capacity at the request of the undersigned,
is not assuming, nor is the Company assuming, any of the undersigned’s
responsibilities to comply with Section 16 or Section 13 of the Securities
Exchange Act of 1934.
This
Power of Attorney shall remain in full force and effect until the undersigned is
no longer required to file such Forms 3, 4, and 5 or Schedule 13D with respect
to the undersigned’s holdings of and transactions in securities issued by the
Company, unless earlier revoked by the undersigned in a signed writing delivered
to the foregoing attorneys-in-fact.
IN
WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be
executed as of this 29 day of December 2008.
By: /s/ Linda G. Rappaport
LINDA G.
RAPPAPORT
ACKNOWLEDGEMENT
|
STATE
OF OKLAHOMA
|
)
|
|
|
)
|
ss:
|
|
|
COUNTY
OF OKLAHOMA
|
)
|
This
instrument was acknowledged, signed and sworn to before me this 29 day of
December 2008, by LINDA G. RAPPAPORT.
(SEAL)
/s/ Sharon
McCullough
Notary
Public
My Commission Expires 1/28/12
JOINT
FILING STATEMENT
(pursuant
to rule 13d-1(f)(1)(iii))
The undersigned acknowledges and agrees
that the foregoing Statement on Schedule 13D with respect to the ownership of
certain equity securities of LSB Industries, Inc. is filed on behalf of the
undersigned. The undersigned acknowledges that the undersigned is
responsible for the completeness and accuracy of the information concerning the
undersigned contained therein, but is not responsible for the completeness and
accuracy of the information concerning the other reporting persons, except to
the extent that the undersigned knows or has reason to believe that such
information is inaccurate.
Dated: December
29, 2008
By: /s/ Linda G. Rappaport
LINDA G. RAPPAPORT
LINDA G. RAPPAPORT
K:\07033
LSB\Securities (002)\Forms 13D\Joint Filing Statement.LFR.doc
|
SECURITY
AGREEMENT Stocks, Bonds and Possessory Collateral
|
DATE
OF AGREEMENT
11/07/2008
|
||
|
DEBTOR
NAME AND ADDRESS
|
PLEDGOR
NAME AND ADDRESS
|
LENDER
NAME AND ADDRESS
|
|
|
SBL,
L.L.C.
16
South Pennsylvania
Oklahoma
City, OK 73107
|
SBL,
L.L.C.
16
South Pennsylvania
Oklahoma
City, OK 73107
|
The
Bank Of The West
Oklahoma
City Branch
4801
Gaillardia Parkway, Suite 190
Oklahoma
City, OK 73142
|
|
I. GRANT
OF SECURITY INTEREST. For value received, Pledgor (hereinafter the
“Debtor”) hereby grants to Lender named above a security interest in the
property described in Paragraph II, which property is hereinafter referred to
collectively as “Collateral.” This security interest and assignment
is given to secure all the obligations of the Borrower and of the Debtor to
Lender as more fully set forth in Paragraphs III and IV hereof. If
the Collateral includes a certificate of deposit maintained with Lender, Lender
may place a hold on such certificate(s) of deposit.
For
purposes of this Agreement, any term used in the Uniform Commercial Code, as
adopted and revised from time to time in the State of Oklahoma (“UCC”), and not
defined in this Agreement has the meaning given to the term in the
UCC. Debtor’s location (if other than the address reflected above is
in the state of _______________.
II. COLLATERAL. The
Collateral includes: (A) All specifically described Collateral; (B) All proceeds
of Collateral; and (C) Other property as indicated below.
|
(A)
|
SPECIFICALLY
DESCRIBED COLLATERAL
|
|
share(s)
of LSB Corporation common/preferred stock evidenced by certificate number
SEE EXHIBIT “A”
|
|
|
(B)
|
ALL
PROCEEDS of the specifically described Collateral regardless of kind,
character or form (including, but not limited to, renewals, extensions,
redeposits, reissues or any other changes in form of the rights
represented thereby), together with any stock rights, rights to subscribe,
liquidating dividends, cash dividends, dividends paid in stock, or any
other property to which Undersigned may hereafter become entitled to
receive by reason of the specifically described Collateral; and in the
event Undersigned receives any such property, Undersigned agrees
immediately to deliver same to Lender to be held by Lender in the same
manner as Collateral specifically described above.
|
|
(C)
|
OTHER
PROPERTY which shall be deemed Collateral shall include all dividends and
interest paid in cash on the Collateral, provided, however, that Lender at
its option may permit such dividends and/or interest to be received and
retained by Undersigned, but provided further, that Lender may at any time
terminate such permission. Collateral shall further include
without limitation, all money, funds, or property owned by Undersigned
which is now or which hereafter may be possessed or controlled by Lender
whether by pledge, deposit or
otherwise.
|
III. OBLIGATIONS
SECURED BY THIS AGREEMENT. The security interest herein granted is
given to secure all of the obligations of Borrower or Debtor to Lender
including: (a) The performance of all of the agreements, covenants and
warranties of the Borrower or Debtor as set forth in any agreement between
Borrower or Debtor and Lender; (b) All liabilities of Borrower or Debtor to
Lender of every kind and description including: (1) all future advances, (2)
both direct and indirect liabilities, (3) liabilities due or to become due and
whether absolute or contingent, and (4) liabilities now existing or hereafter
arising and however evidenced; (c) All extensions and renewals of liabilities of
Borrower or Debtor to Lender for any term or terms to which Undersigned hereby
consents; (d) All interest due or to become due on the liabilities of Borrower
or Debtor to Lender; (e) All expenditures by Lender involving the performance of
or enforcement of any agreement, covenant or warranty provided for by this or
any other agreement between the parties; and (f) All costs, attorney fees, and
other expenditures of Lender in the collection and enforcement of any obligation
or liability of Borrower or Debtor to Lender and in the collection and
enforcement of or realization upon any of the Collateral.
IV. FUTURE
ADVANCES. It is specifically agreed that the obligations of Borrower
and Debtor secured by this Agreement include all future advances by Lender to
Borrower as set forth in Paragraph III above.
V. ADDITIONAL
PROVISIONS. The Undersigned agrees to the Additional Provisions set
forth on page two hereof, the same being incorporated herein by
reference.
|
RECEIPT
FOR COLLATERAL
|
SIGNATURE(S)
|
|
By: /s/Charlie
Smith
Charlie Smith, Loan
Operator
|
By: /s/ Jack E.
Golsen
Jack E. Golsen, Manager of SBL,
L.L.C.
|
Form 04
06764 © Copyright 08/05 American
Bank Systems
ADDITIONAL
PROVISIONS
UNDERSIGNED
EXPRESSLY WARRANTS, COVENANTS AND AGREES:
|
DEBTOR
NAME AND ADDRESS
|
||
|
1. Financial Information. All loan
applications, balance sheets, earnings statements, other financial
information and other representations which have been or may hereafter be,
furnished Lender to induce it to enter into or continue a financial
transaction with Borrower fairly represent the financial condition of
Borrower as of the date and for the period shown therein, and all other
information, reports, documents, papers and data furnished to Lender are
or shall be, at the time furnished, accurate and correct in all material
respects and complete insofar as completeness may be necessary
to give Lender a true and accurate knowledge of the subject
matter. There has been no material change in the financial
condition of Borrower since the effective date of the last furnished
financial information which has not been reported to Lender in
writing. (The provisions of this paragraph do not apply to
Debtors who are different parties from Borrower.)
2. Furnishing of Information on
Collateral. Undersigned will furnish Lender information
adequate to identify with accuracy all Collateral in a form and substance
and at times as may be requested by Lender. Undersigned will
also upon request deliver to Lender true copies of purchase orders,
shipping and delivery receipts and invoices evidencing and describing the
Collateral. Debtor will execute such documents as Lender may
from time to time require to enable Lender to perfect the security
interest granted hereby and to receive proceeds of and distributions from
or interests in the Collateral.
3. Adequacy of Collateral. After
written notice of such fact and within the time specified in such notice,
Debtor agrees to deliver to Lender additional collateral satisfactory to
Lender, if Lender in its sole discretion determines that the Collateral is
inadequate to secure the obligations of Borrower to Lender covered by this
Agreement or the Lender deems itself otherwise insecure.
4. Debtor’s Name and
Location. Debtor’s exact legal name is as set forth on
the reverse side of this Agreement. If Debtor is an individual,
Debtor’s principal residence is at Debtor’s address as set forth
herein. If Debtor is an entity other than an individual,
Debtor’s location (i.e., place of business, chief executive office or
state of organization, as the case may be) is in the state reflected for
Debtor’s address or as otherwise set forth on the reverse side of this
Agreement. Until the Indebtedness is paid in full, Debtor
agrees that it will not change its location (for example, its state of
incorporation, or its legal name without providing Lender 30 days prior
written notice.
|
5. Control. Debtor will cooperate
with Lender in obtaining control with respect to Collateral consisting of:
deposit accounts; investment property; letter-of-credit rights; electronic
chattel paper.
6. Possession. Debtor shall have
possession of the Collateral, except where expressly otherwise provided in
this Agreement or where Lender chooses to perfect its security interest by
possession in addition to the filing of a financing
statement. Where Collateral is in the possession of a third
party, Debtor will join with Lender in notifying the third party of
Lender’s security interest and obtaining an acknowledgement from the third
party that it is holding the Collateral for the benefit of
Lender.
7. Taxes. Undersigned shall
promptly pay any and all taxes, assessments and license fees with respect
to the Collateral or the use of the Collateral.
8. Sale, Lease or Disposition of Collateral
Prohibited. Undersigned shall not sell, transfer,
exchange, lease or otherwise dispose of the Collateral or any part thereof
or the Undersigned’s rights therein without first obtaining the prior
written consent of Lender. The consent of Lender may be
conditioned upon any requirements which lender deems to be for its
protection; and, it is understood and agreed that such consent will not be
deemed to be effective unless and until such requirements and conditions
have been fulfilled.
9. Financing Statement. No
Financing Statement covering Collateral is on file in any public
office. Undersigned agrees to join with Lender in executing one
or more Financing Statements, or other instrument of encumbrance, in form
satisfactory to Lender, in order to perfect, or to continue perfection of,
the security interest of Lender which may arise hereunder.
10. Adequate Insurance. Undersigned
at own expense, if required by Lender, shall insure Collateral with
companies acceptable to Lender against such casualties and in such amounts
as prudent and adequate to protect Lender or as Lender shall
require. All insurance policies shall be written for benefit of
Undersigned and Lender as their interests appear and such policies or
certified copies thereof evidencing same shall be furnished to Lender
within ten days of date of this agreement. All policies of
insurance shall provide for at least ten days prior written notice of
cancellation to Lender. Lender may act as attorney for
Undersigned in the procuring of insurance, in making, adjusting, and
settling claims under or cancelling such insurance and in endorsing
Undersigned’s name on any drafts or checks drawn by insurers of
Collateral.
|
|
|
EVENTS
OF DEFAULT
|
||
|
Debtor
shall be in default under this Agreement upon the happening of any of the
following events or conditions, herein called “Events of
Default”:
1. Any
warranty, covenant, agreement, representation, financial information or
statement made or furnished to Lender by or in behalf of Borrower or
Debtor to induce Lender to enter into this Agreement, or in conjunction
therewith, is violated or proves to have been false in any material
respect when made or furnished.
2. Any
payment required hereunder or under any note or obligation of Borrower or
Debtor to this Lender or to others is not made when due or in accordance
with terms of the applicable contract.
3. Borrower
or Debtor defaults in the performance of any covenant, obligation,
warranty or provision contained in any Loan Agreement or in any other note
or obligation of Borrower or Debtor to Lender or to others.
4. The
occurrence of any event or condition which results in acceleration of the
maturity of any obligation of Borrower or Debtor to Lender to others under
any note, indenture, agreement or undertaking.
|
5. Loss,
theft, substantial damage to or destruction of Collateral.
6. The
making of any levy against or seizure, garnishment or attachment of any
Collateral, the consensual encumbrance thereof, or the sale, lease or
other disposition of Collateral without the prior written consent of
Lender as required elsewhere in this Agreement.
7. When
the judgment of Lender the Collateral becomes unsatisfactory or
insufficient in character or value, and upon request Borrower fails to
provide additional Collateral as required by Lender.
8. Any
time Lender in its sole discretion believes the prospect of payment or
performance of any liability, covenant, warranty or obligation of Borrower
or Debtor is impaired.
9. The
death, dissolution, termination of existence or insolvency of Borrower or
Debtor, the appointment of a receiver over any part of Borrower’s or
Debtor’s property or any part of the Collateral, as assignment for the
benefit of creditors or the commencement of any proceeding under any
bankruptcy or insolvency law by or against Borrower or Debtor or any
guarantor or surety for Borrower or Debtor.
|
|
|
REMEDIES
|
||
|
Upon
the occurrence of an Event of Default, and at any time thereafter, Lender
may at its option and without notice or demand to Borrower or Debtor
except as otherwise provided by law, exercise any and all rights and
remedies provided by the U.C.C., as well as all other rights and remedies
possesses by Lender, including, but not limited to:
1. Declare
all liabilities secured hereby immediately due and payable, and/or proceed
to enforce payment and performance of all liabilities secured
hereby.
2. Require
Debtor to assemble Collateral or evidence thereof and make it available to
Lender at any place designated by Lender which is reasonably convenient to
both parties.
3. Repossess
the Collateral, and for the purpose Lender is hereby granted authority to
enter into and upon any premises on which Collateral or any part may be
situated, and remove it as a part of such repossession.
4. Possess
all books and records evidencing or pertaining to the Collateral, and for
this purpose Lender is hereby given authority to enter into and upon any
premises at which such books and records or any part of them may be
situated, and to remove them.
5. Apply
that portion of the Collateral consisting of cash or cash equivalent items
such as checks, drafts or deposited funds against any liabilities of
Borrower selected by Lender, and for this purpose Debtor agrees that cash
or equivalents will be considered identical to cash
proceeds. Lender shall have the right immediately and without
further action by it to set all against the liabilities secured hereby all
money owed by Lender to Borrower, whether due or not due, and Lender shall
be deemed to have exercised such right to set off and to have made a
charge against such money at the time of any acceleration upon default
even though such charges made are entered on the Lender’s books subsequent
thereto.
6. Transfer
any of the Collateral or evidence thereof into its own name or that of a
nominee and receive the proceeds therefrom and hold the same as security
for the liabilities of
|
Borrower
to Lender or apply it on or against any such liability. Lender
may also demand, collect, receipt for, settle, compromise, adjust, sue
for, foreclose, release or realize upon Collateral in its own name or in
the name of the Debtor as Lender may determine.
7. Sell
or otherwise dispose of the Collateral. Unless Collateral in
hole or part is perishable or threatens to decline speedily in value or is
of a type customarily sold on a recognized market, Lender will give
Borrower and Debtor reasonable notice, as required by law, of the time and
place of any public sale, or of the time after which any private sale or
other disposition is to be made. Any requirement of notice
shall be met if notice is mailed, postage prepaid, to the address provided
for herein at least ten days before sale or other disposition or
action. Lender shall be entitled to, and Undersigned shall be
liable for, all reasonable costs and expenditures incurred in realizing on
its security interest, including without limitation, court costs, fees for
replevin bonds, storage, repossession costs, repair and preparation costs
for sale, selling costs and reasonable attorneys’ fees as set forth in any
promissory note. All such costs shall be secured by the
Security interest in the Collateral covered herein.
8. Lender
shall not be liable for failure to collect any account, enforce any
contract right, or for any other act or omission on the part of Lender,
its officers, agents or employees, except as the same constitutes a lack
of good faith or failure to act in a commercially reasonable
manner. Lender shall have acted in a commercially reasonable
manner if its action or non-action is consistent with the general usage of
lenders in the area of Lender’s location at the time the action or
non-action occurs, but this standard shall not constitute disapproval of
any procedures which may be otherwise reasonable under the circumstances
nor require Lender to take necessary steps to preserve rights against
prior parties in an instrument or chattel paper.
|
|
|
GENERAL
|
||
|
1. Expenditures of Lender. At its option and
after any written notice to Undersigned required by law, which Undersigned
hereby agrees is sufficient if mailed, postage prepaid, to the address of
Undersigned provided for herein at least ten days before the commencement
of the performance of the duties specified therein, it is agreed Lender
may discharge taxes, liens, security interests or other encumbrances on
the Collateral and may pay for the repair of any damage to the Collateral,
for the maintenance and preservation thereof and for insurance
thereon. Undersigned shall be liable for and agrees to pay
Lender for all expenditures of Lender for taxes on Collateral, for the
discharge of liens, security interests or other encumbrances on the
Collateral, for the repair of any damage to Collateral, and for all costs,
attorneys’ fees and other disbursements of Lender in connection with the
foregoing. Undersigned agrees promptly to reimburse Lender for
all such expenditures and until such reimbursement the amounts of such
expenditures shall be considered a liability of Undersigned to Lender
which is secured by this Agreement. In addition, Undersigned
shall be liable for and agrees to pay Lender for all costs, attorneys’
fees and other disbursements of Lender as allowed by law or provided for
herein in the enforcement or collection of any note, warranty or liability
of Undersigned to Lender, or in the realization upon or the enforcement or
collection of any account receivable, contract right, promissory note,
chattel paper, instrument, document or other Collateral in which Lender
has a security interest. Undersigned agrees to reimburse Lender
for all such expenditures, and until such reimbursement the amount of such
expenditures shall be considered a liability of Undersigned to lender
which is secured by this Agreement.
2. Right of Offset. Any property,
tangible or intangible of Undersigned in possession of Lender at any time
during the term hereof, or any indebtedness due from Lender to Undersigned
and any deposit or credit balances due from Lender to Undersigned, or any
of the foregoing of any party hereto, is pledged to secure payments hereof
and may at any time while the whole or any part of Undersigned’s
indebtedness to Lender remains unpaid, whether before or after maturity
thereof, be appropriated, held or applied toward the payment of any
obligation of Undersigned to Lender.
3. Applicable Law. This Agreement
shall be construed and enforced in accordance with the laws of the State
of Oklahoma, except to the extent that the UCC provides for application of
the law where the Debtor or the collateral is located (if other than
Oklahoma) as the case may be.
|
4. Waivers. No act, delay or
omission, including Lender’s waiver of remedy because of any default
hereunder, shall constitute a waiver of any of the Lender’s rights and
remedies under this agreement between the parties. All rights
and remedies of Lender are cumulative and may be exercised singularly or
concurrently, and the exercise of any one or more remedy will not be a
waiver of any other. No waiver, change, modification or
discharge of any of Lender’s rights or of Undersigned’s duties as so
specified or allowed will be effective unless in writing and signed by a
duly authorized officer of Lender, and any such waiver will not be a bar
to the exercise of any right or remedy on any subsequent default,
Undersigned hereby waives: (a) all demands and notices of any
action taken by Lender under this Agreement or any other agreement between
the parties or in connection with any notes; (b) any indulgence Agreement
or any other of Lender; and (c) any substitution for, exchange of, or
release of all or any part of the Collateral or of other collateral
securing obligations of Borrower to Lender. Undersigned also
consents to the addition or release of person liable on any obligation of
Borrower to Lender.
5. Agreement Binding on
Assigns. This Agreement shall insure to the benefit of
the successors and assigns of Lender and shall be binding upon the heirs,
executors, administrators, successors and assigns of
Undersigned.
6. Rights of Lender
Assignable. Lender at any time and at its option may
pledge, transfer or assign its rights under this Agreement in whole or in
part, and any pledge, transferee or assignee shall have all the rights of
Lender as to the rights or parts thereof so pledged, transferred or
assigned. The rights of the Undersigned hereunder may not be
assigned.
7. Joint and Several Responsibility of
Debtor. If more than one Undersigned executes this
Agreement, their responsibility hereunder shall be joint and several and
the reference to Undersigned herein shall be deemed to refer to each
Undersigned signing this Agreement.
8. Severability of Provisions. If
any provision of this Agreement shall for any reason be held to be invalid
or unenforceable, such invalidity or unenforceability shall not affect any
other provision hereof, and this Agreement shall be construed as if such
invalid or unenforceable provision had never been contained
herein.
9. Copies. A carbon, photographic,
or other reproduction of this Security Agreement or of any financing
statement prepared or filed with respect hereto is sufficient as a
financing statement.
10. Notice of Name Change,
etc. Undersigned will immediately notify Lender of any
change in his, her, or their name, identity, or organizational or
corporate structure.
|
|
EXHIBIT
“A”
SBL,
L.L.C.
COLLATERAL
AT THE BANK OF THE WEST
|
Tax
ID
Number
|
Owner
|
Certificate
Number
|
Certificate
Date
|
#
of Shares
|
||||
|
73-1477865
|
SBL,
L.L.C.
|
OKS12546
|
11/10/2008
|
25,000
|
||||
|
OKS12547
|
11/10/2008
|
25,000
|
||||||
|
OKS12548
|
11/10/2008
|
25,000
|
||||||
|
OKS12549
|
11/10/2008
|
25,000
|
||||||
|
OKS12550
|
11/10/2008
|
25,000
|
||||||
|
OKS12551
|
11/10/2008
|
25,000
|
||||||
|
OKS12552
|
11/10/2008
|
25,000
|
||||||
|
OKS12553
|
11/10/2008
|
25,000
|
||||||
|
OKS12554
|
11/10/2008
|
25,000
|
||||||
|
OKS12555
|
11/10/2008
|
25,000
|
||||||
|
OKS12556
|
11/10/2008
|
25,000
|
||||||
|
OKS12557
|
11/10/2008
|
25,000
|
||||||
|
OKS12558
|
11/10/2008
|
25,000
|
||||||
|
OKS12559
|
11/10/2008
|
25,000
|
||||||
|
OKS12560
|
11/10/2008
|
25,000
|
||||||
|
OKS12561
|
11/10/2008
|
25,000
|
||||||
|
OKS12562
|
11/10/2008
|
25,000
|
||||||
|
OKS12563
|
11/10/2008
|
25,000
|
||||||
|
OKS12564
|
11/10/2008
|
25,000
|
||||||
|
OKS12565
|
11/10/2008
|
25,000
|
||||||
|
OKS12566
|
11/10/2008
|
25,397
|
||||||
|
OKS12567
|
11/10/2008
|
25,000
|
||||||
|
OKS12568
|
11/10/2008
|
25,000
|
||||||
|
OKS12569
|
11/10/2008
|
25,000
|
||||||
|
OKS12570
|
11/10/2008
|
25,000
|
||||||
|
OKS12571
|
11/10/2008
|
25,000
|
||||||
|
OKS12572
|
11/10/2008
|
25,000
|
||||||
|
OKS12573
|
11/10/2008
|
25,000
|
||||||
|
OKS12574
|
11/10/2008
|
25,000
|
||||||
|
OKS12576
|
11/10/2008
|
25,000
|
||||||
|
OKS12576
|
11/10/2008
|
25,000
|
||||||
|
OKS12577
|
11/10/2008
|
25,000
|
||||||
|
OKS12578
|
11/10/2008
|
25,000
|
||||||
|
Total
Number of Shares
|
825,397
|