UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐ Preliminary Proxy Statement

☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒ Definitive Proxy Statement

☐ Definitive Additional Materials

☐ Soliciting Material Pursuant to §240.14a-12

LSB Industries, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☒ No fee required.

☐ Fee paid previously with preliminary materials.

☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

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Selected Table of Contents

LSB INDUSTRIES, INC.

PROXY STATEMENT FOR

2024 ANNUAL MEETING OF STOCKHOLDERS

 

Solicitation of Proxies	4
Questions and Answers About the Annual Meeting	4
Code of Conduct	11
Proxy Voting Roadmap	11
Notice of Annual Meeting of Stockholders	12
Proposal 1 Election of Directors	14
General	14
Agreements as to Certain Directors and Committees	14
Nominees for the Class of Directors Whose Term Will Expire in 2027	15
Continuing Directors	18
Proposal 2 Approve the Amended and Restated Section 382 Rights Agreement	23
Proposal 3 Ratification of the Appointment of Ernst & Young LLP as the Independent Registered Public Accounting Firm for 2024	28
Proposal 4 Advisory Vote to Approve Named Executive Officer Compensation	29
Corporate Governance	30
Corporate Responsibility	30
Corporate Governance Highlights	30
Meetings of the Board	32
Board Leadership Structure	33
Committees of the Board of Directors and Committee Charters	33
Nominating and Corporate Governance Committee	34
Audit Committee	35
Compensation and Talent Management Committee	38
Board Independence	39
Communications with the Board	40
Policy as to Related Party Transactions	40
Our Named Executive Officers	41
Executive Compensation	43
Compensation Discussion and Analysis	43
Compensation Philosophy – How Executive Pay is Linked to Company Performance	46
Compensation Framework	46
Employment Agreements	52

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Management Stock Ownership Guidelines	53
Tax and Accounting Implications	54
Executive Compensation Tables	55
2023 Summary Compensation Table	55
2023 Grants of Plan-Based Awards	56
2023 Outstanding Equity Awards at Fiscal Year End	57
Stock Vested During 2023	58
Equity Compensation Plan Information	58
Potential Payments Upon Termination or Change in Control	59
Table of Severance Benefits	60
CEO Pay Ratio	62
Pay Versus Performance	62
Director Stock Ownership Guidelines	68
Director Compensation	68
2023 Director Compensation Table	68
Securities Ownership	69
Security Ownership of 5% Owners	69
Security Ownership of Certain Beneficial Owners	70
Section 16(a) Beneficial Ownership Reporting Compliance	72
Stockholder Proposals	72
Available Information	73
APPENDIX A Amended and Restated Section 382 Rights Agreement	74
2024 Proxy Card	132

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:

Certain statements contained in this proxy statement may be deemed "Forward-Looking Statements" within the meaning of U.S. federal securities laws. All statements in this proxy statement other than statements of historical fact are Forward-Looking Statements that are subject to known and unknown risks, uncertainties and other factors, many of which are difficult to predict or outside of the Company’s control, which could cause actual results and performance of the Company to differ materially from those expressed in, or implied or projected by, such statements. Any such Forward-Looking Statements are not guarantees of future performance. The words "believe," "expect," "anticipate," "intend," "plan," "may," "could," and similar expressions identify Forward-Looking Statements. Any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are difficult to predict and are generally outside the Company’s control, that could cause actual results to differ materially from those expressed in, or implied of projected by, such forward-looking statements. Forward-Looking Statements contained herein, and the associated risks, uncertainties, assumptions and other important factors include, but are not limited to, the following: the outlook of our chemical products and related markets; our ability to successfully leverage our existing business platform and portfolio of assets to produce low carbon products and execute our strategy to become a leader in the energy transition in the chemical industry; the development of the market and demand for low-carbon ammonia; the costs of compliance with environmental laws, health laws, security regulations and transportation regulations; the anticipated cost and timing of our capital projects; changes in domestic fertilizer production; and the outlook for the industrial and mining industries.

While we believe, the expectations reflected in such Forward-Looking Statements are reasonable, we can give no assurance such expectations will prove to have been correct. There are a variety of factors which could cause future outcomes to differ materially from those described in this proxy statement, including those identified under the heading "Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (SEC) on March 6, 2024 and in any subsequent filings with the SEC. We caution investors, potential investors, and others not to place considerable reliance on the forward-looking statements contained in this proxy statement. You are encouraged to read our filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this proxy statement speak only as of the date of this proxy statement, and we do not undertake any obligation to publicly update or revise our forward-looking statements, even if experience or future changes make it clear that any projected results expressed or implied in such statements will not be realized.

Information appearing on https://investors.lsbindustries.com/ is not part of and is not incorporated by reference in this proxy statement.

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LSB INDUSTRIES, INC.

3503 NW 63rd Street, Suite 500

Oklahoma City, Oklahoma 73116

PROXY STATEMENT FOR

2024 ANNUAL MEETING OF STOCKHOLDERS

To Be Held May 23, 2024

 

Solicitation of Proxies   This Proxy Statement is furnished in connection with the solicitation on behalf of the Board of Directors (the "Board") of LSB Industries, Inc. (the "Company," "us," "our," or "we") for proxies to be voted at our Annual Meeting of Stockholders (the "Annual Meeting") to be held on May 23, 2024, at 8:30 AM CDT in virtual-only meeting format via live video webcast and at any adjournment thereof. The Notice of the Annual Meeting of Stockholders and related proxy materials are being distributed or made available to stockholders beginning on or about April 12, 2024.

 

Questions and Answers About the Annual Meeting

 

What matters are being considered?

You will be voting on each of the following items of business:

The Board recommends a vote "FOR" each of the director nominees in Proposal No. 1

and a vote "FOR" each of Proposal Nos. 2, 3, and 4.

 

What is a proxy?

A proxy is your legal appointment of another person to vote the shares that you own in accordance with your instructions. The person you appoint to vote your shares is also called a proxy. On the enclosed proxy card, you will find the names of the persons designated by the Company to act as proxies to vote your shares at the Annual Meeting. The designated proxies are required to vote your shares in the manner you instruct.

 

Will other matters be brought before the Annual Meeting?

The Board does not intend to bring any other matters before the Annual Meeting and does not expect any other items of business because the deadline for stockholder proposals and nominations has already passed. However, if any other matter is properly brought before the Annual Meeting, the accompanying proxy gives discretionary authority to the persons named in the proxy with respect to any other matters that might be brought before the Annual Meeting. Those persons intend to vote that proxy in accordance with their best judgment on such matter.

 

 

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Who is entitled to vote at the Annual Meeting?

You or your proxy may vote if you owned voting stock as of the close of business on April 1, 2024, which is the record date for determining who is eligible to vote at the Annual Meeting.

As of the close of business on the record date, we had the following number of shares of common stock and no voting preferred stock issued and outstanding which were eligible to be voted:

 

 

What constitutes a quorum?

In order to conduct the Annual Meeting, we must have a quorum. Holders of a majority of the total of all of the outstanding shares of common stock will constitute a quorum for the Annual Meeting.

What vote is required to approve the items under consideration?

 

 

Are abstentions counted?

Abstentions occur when stockholders are present virtually or by proxy at the Annual Meeting but fail to vote or voluntarily withhold their vote for any of the matters upon which the stockholders are voting. If your proxy indicates an abstention from voting on the proposal, the shares represented will be counted as present for the purpose of determining a quorum, but they will not be voted on any matter at the Annual Meeting. If you abstain from voting, you have not cast a vote and the abstention will not be counted in determining the outcome of the proposals.

 

 

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How do I cast my vote?

Registered Holders. If shares are registered in your name, you may vote those shares at the annual meeting or by proxy. If you decide to vote by proxy, you may do so in any one of the following ways.

 

	By Telephone. After reading the proxy materials, you may call the toll-free number (866) 286 - 3181, using a touch-tone telephone. You will be prompted to enter your Control Number, which you can find on your Notice of Internet Voting or proxy card. This number will identify you and the Company. You can then follow the simple instructions that will be given to you to record your vote.
	Via the Internet. After reading the proxy materials, you may use a computer to access the website www.proxydocs.com/LXU. You will be prompted to enter your Control Number, which you can find on your Notice of Internet Voting Availability or your proxy card. This number will identify you and the Company. You can then follow the simple instructions that will be given to you to record your vote.
	By Mail. After reading the proxy materials, you may vote your shares by marking, signing, dating and returning your proxy card in the envelope provided. To best ensure timely receipt of your proxy, you are encouraged to mail your proxy card for arrival by May 23, 2024.
	Virtually. After reading the proxy materials, you may vote your shares by attending the 2024 Annual Meeting of Stockholders via live video webcast. You can then follow the simple instructions that will be given to you to record your vote.

 

 

The Internet and telephone voting procedures have been set up for your convenience and have been designed to authenticate your identity, allow you to give voting instructions and confirm that those instructions have been recorded properly.

Whether you choose to vote by telephone, over the Internet or by mail, you can specify whether your shares should be voted for all, some or none of the director nominees. You can also specify whether you want to vote for or against, or abstain from voting on:

Beneficial Owner. If your stock is held in your brokerage account, also known as "street name," you should instruct your broker how your shares should be voted. If you fail to give your broker instructions, in some cases but not others the broker may submit a "broker non-vote," which is explained below.

If you are a beneficial owner whose shares are held of record directly in your name by a broker, you will receive instructions from the broker describing how to direct the voting of or vote your shares. If you do not instruct your broker how to vote your shares, it may vote your shares as it decides with respect to any matter for which it has discretionary authority under the rules of the New York Stock Exchange ("NYSE").

There are also non-discretionary matters for which your broker does not have discretionary authority to vote unless it receives timely instructions from you. A "broker non-vote" results when a broker does not have discretion to vote on a particular matter, you have not given timely instructions on how the broker should vote your shares and the broker indicates it does not have authority to vote such shares on its proxy. Although broker non-votes will be counted as present at the Annual Meeting for purposes of determining a quorum, they will be treated as shares not entitled to vote on the proposal. Under the current NYSE rules, we believe Proposal No. 3 (ratification of the appointment of the independent registered public accounting firm) is a routine matter. Accordingly, if your broker holds shares that you own in street name, the broker may vote your shares on Proposal No. 3 even if the broker does not receive instructions from you. Proposal Nos. 1, 2, and 4 are considered to be "non-routine" under NYSE rules such that your

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broker, bank or other agent may not vote your shares on those proposals in the absence of your voting instructions.

If your shares are held in street name and you do not give voting instructions, the broker will only be entitled to vote your shares in its discretion with respect to the proposed ratification of the appointment of our independent registered public accounting firm. Without voting instructions from you, the record holder will not be permitted to vote your shares with respect to the election of directors, the approval of the Amended and Restated Section 382 Rights Agreement or the advisory vote on executive compensation. Your shares would therefore be considered broker non-votes with respect to these proposals and would have no effect on the proposal. Accordingly, it is important for you to instruct your broker how you wish to vote your shares.

 

 

Can I change my mind after I vote?

Yes, you may change your mind at any time before the polls close at the Annual Meeting, which will be at 8:30 AM CDT on May 23, 2024. If you hold your shares directly in record name, you can change your vote by:

In the absence of a revocation, shares represented by the proxies will be voted at the Annual Meeting. Your attendance at the Annual Meeting will not automatically revoke your proxy. If you do not hold your shares directly, you should follow the instructions provided by your broker, bank or nominee to revoke your previously voted proxy.

 

 

What if I sign and return my proxy card but I do not include voting instructions?

If you properly complete and submit a proxy card, but do not indicate any contrary voting instructions, your shares will be voted as follows:

If any other business comes before the stockholders for a vote at the Annual Meeting, your shares will be voted in accordance with the discretion of the holders of the proxy. The Board knows of no matters, other than those previously stated, to be presented for consideration at the Annual Meeting.

 

 

 

What does it mean if I receive more than one proxy card?

It means that you have multiple accounts with brokers and/or our transfer agent. Please vote all of these shares. We recommend that you contact your broker and/or our transfer agent to consolidate as many accounts as possible under the same name and address. Our transfer agent is Computershare Trust Company, N.A., 462 South 4th Street, Suite 1600, Louisville, KY 77845, (800) 736-3001 (U.S. and Canada) and (781) 575-3100 (outside U.S. and Canada).

 

 

 

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Will my shares be voted if I do not provide my proxy?

If your shares are registered in your name, they will not be voted unless you submit your proxy or vote at the Annual Meeting. As discussed above, if your shares are held in street name and you do not give voting instructions, the broker will only be entitled to vote your shares in its discretion with respect to the ratification of the appointment of our independent registered public accounting firm.

 

Who will count the votes?

All votes will be tabulated by Mediant Communications, Inc., who will serve as the inspector of election for the Annual Meeting.

 

 

What is the deadline for submission of stockholder proposals for the 2025 Annual Meeting?

If you wish to submit proposals to be included in our proxy statement for our 2025 Annual Meeting, proposals must be received at our principal executive offices in writing not later than December 13, 2024 and should be addressed to our Corporate Secretary, LSB Industries, Inc., 3503 NW 63rd Street, Suite 500, Oklahoma City, Oklahoma 73116.

If you wish to present a proposal, but you fail to notify us by such deadline, you will not be entitled to present the proposal at the 2025 Annual Meeting.

For more information regarding stockholder proposals, please see "Stockholder Proposals" below.

 

 

Who is soliciting proxies?

We will pay for preparing, printing and mailing this Proxy Statement. Proxies may be solicited on our behalf by our directors, officers or employees, without additional consideration, by telephone, electronic transmission and facsimile transmission. We will reimburse banks, brokers and other custodians, nominees and fiduciaries for their out-of-pocket costs of sending the proxy materials to our beneficial stockholders.

 

 

Stockholder List

A list of stockholders entitled to vote at the Annual Meeting will be open for examination by any stockholder for any purpose relevant to the Annual Meeting during ordinary business hours commencing 10 days before the Annual Meeting. The list will be maintained at our principal executive offices located at 3503 NW 63rd Street, Suite 500, Oklahoma City, Oklahoma 73116.

 

 

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Core Values

We seek to maximize the long-term value of the company for our shareholders, customers, employees, communities, suppliers, and the broader environment. Every decision we make is framed and guided by our core values. We seek ways to ensure the long-term sustainability of our business, including making a lasting positive impact on society and our environment. LSB and its employees are committed to upholding these values to drive our culture and frame how we conduct business and engage with our stakeholders.

 

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Company Vision

Our vision is to be a leader in the energy transition in the chemical industry through the production of low and no carbon products that build, feed and power the world. We are implementing a multi-pronged approach to be a low-carbon leader:

 

Executing on this multi-pronged approach, in 2023 we:

Sustainability

LSB Industries promotes corporate sustainability by formulating and implementing business strategies and practices that aim to create value and have a positive impact on our world.

Sustainability Goals

We seek to maximize the long-term value of the company for our shareholders and other stakeholders including our, customers, employees, communities, suppliers, and the broader environment. In 2022, we created a Sustainability Roadmap and in early 2023, we announced our Sustainability Goals. We followed that up by releasing our inaugural Sustainability Report. These can be found at https://lsbindustries.com/sustainability/. In this report we provide transparency into our performance against our core values and the strategies and actions to make a lasting positive impact on the world around us.

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Code of Conduct

A high standard of ethical business conduct is the responsibility of each individual LSB employee, officer and director. Our good name and reputation in the marketplace, depends ultimately on the way we conduct our business and the way the public perceives that conduct. All employees are required to review the Code of Conduct on an annual basis and whenever updated. Employees are likewise required to review and comply with the company’s Employee Handbook. These documents address important governance topics, including our insider trading policy and other compliance policies. In addition, in November 2023, we adopted an Anti-Bribery and Corruption Policy, which applies worldwide to LSB and all its directors, officers, employees, contractors and agents.

Learn more at https://investors.lsbindustries.com/corporate-governance-highlights.

 

 

Proxy Voting Roadmap

The Annual Meeting

 

Below is a summary of certain information included in the Proxy Statement. Please review the entire Proxy Statement before you vote.		Time and Date:		8:30 AM, Central Daylight Time ("CDT"), on May 23, 2024
			Place:		Virtual Meeting Only Registration is required at www.proxydocs.com/LXU
		Record Date:		April 1, 2024

 

 

Matters For Stockholder Vote

 

	Proposal	Board Recommendation	Page
	(1) Election of three nominees to our Board of Directors	"FOR" each nominee	14
	(2) Approval of the Amended and Restated Section 382 Rights Agreement	"FOR"	23
	(3) Ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2024	"FOR"	28
	(4) Advisory vote to approve named executive officer compensation	"FOR"	29

 

The Annual Meeting will be held in virtual-only meeting format via live video webcast.

In order to virtually attend the Annual Meeting, you must register at www.proxydocs.com/LXU.

You may vote at the meeting if you were a holder of record of our common stock at the close of business on April 1, 2024. Please see page 6 for instructions on how to vote your shares.

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Notice of Annual Meeting of Stockholders

To Be Held May 23, 2024

LSB INDUSTRIES, INC.

Virtual Meeting Only

Please register at www.proxydocs.com/LXU

 

To the Stockholders of LSB Industries, Inc.

The 2024 Annual Meeting of the Stockholders of LSB Industries, Inc. (the "Company") will be held in a virtual only format. You will not be able to attend the Annual Meeting in person. Registration is required online at www.proxydocs.com/LXU. The purpose of the Annual Meeting of Stockholders is the consideration and voting:

BENEFITS OF A VIRTUAL ANNUAL MEETING

The Annual Meeting will be held in a virtual-only meeting format, via live webcast that will provide stockholders with the ability to participate in the Annual Meeting, vote their shares and ask questions. We believe a virtual-only meeting format facilitates stockholder attendance and participation by enabling all stockholders to participate fully and equally, and without cost, using an Internet-connected device from any location around the world. In addition, the virtual-only meeting format increases our ability to engage with all stockholders, regardless of size, resources or physical location, and enables us to protect the health and safety of all attendees.

ATTENDANCE AT THE VIRTUAL ANNUAL MEETING

Only stockholders of record and beneficial owners of shares of our common stock as of the close of business on April 1, 2024, the record date, may attend and participate in the Annual Meeting, including voting and asking questions during the virtual Annual Meeting. You will not be able to attend the Annual Meeting physically in person.

In order to virtually attend the Annual Meeting, you must register at www.proxydocs.com/LXU. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you access to the Annual Meeting and to vote and submit questions during the Annual Meeting.

As part of the registration process, you must enter the control number located on your proxy card or voting instruction form. If you are a beneficial owner of shares registered in the name of a broker, bank or other nominee, you will also need to provide the registered name on your account and the name of your broker, bank or other nominee as part of the registration process. On the day of the Annual Meeting, May 23, 2024, stockholders may begin to log in to the virtual-only Annual Meeting 15 minutes prior to the Annual Meeting. The Annual Meeting will begin promptly at 8:30 AM CDT.

We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting. If you encounter any difficulties accessing the virtual-only Annual Meeting platform, including any difficulties voting or submitting questions, you may call the technical support number that will be posted in your instructional email.

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QUESTIONS AT THE VIRTUAL ANNUAL MEETING

Our virtual Annual Meeting will allow stockholders to submit questions before and during the Annual Meeting through the online portal. We will respond to appropriate questions submitted by stockholders within five days following the Annual Meeting.

We will review stockholder-submitted questions and all questions will be answered following the meeting, with the exception of any questions that are irrelevant to the purpose of the Annual Meeting or our business or that contain inappropriate or derogatory references which are not in good taste.

 

	YOUR VOTE IS IMPORTANT You are urged to vote your shares by promptly marking, signing, dating and returning the proxy card or, in the alternative, by voting your shares electronically either over the Internet or by touch tone telephone. Please see "Questions and Answers – How Do I Cast My Vote?" located on page 6 in this Proxy Statement for further information and instructions.   HOW TO VOTE:
		BY TELEPHONE Call the telephone number on your proxy card
		VIA THE INTERNET Visit the website listed on your proxy card
		BY MAIL Sign, date and return your proxy card in the enclosed envelope
		VIRTUAL Attend the 2024 Annual Meeting of Stockholders via live video webcast

 

Instructions are also included on the proxy card.

 

	By order of the Board of Directors,
	Michael J. Foster
Oklahoma City, Oklahoma	Executive Vice President,
April 12, 2024	Secretary and General Counsel

 

 

 

IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR

THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 23, 2024.

This Notice of Annual Meeting of Stockholders and related proxy materials are being distributed or made available to stockholders beginning on or about April 12, 2024. This includes instructions on how to access these materials (including the Proxy Statement for the Annual Meeting, along with the LSB 2023 Annual Report) via the Internet at www.proxydocs.com/LXU.

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Proposal 1

Election of Directors

General

Our Certificate of Incorporation and Bylaws provide for the division of the Board into three classes, each class consisting as nearly as possible of one-third of the whole. The term of office of one class of directors expires each year; with each class of directors elected for a term of three years and until the stockholders elect their qualified successors.

Barry H. Golsen, Kanna Kitamura and Richard W. Roedel are the class of directors whose terms expire at the Annual Meeting. Our Board has nominated, and stockholders are being asked to reelect, Mr. Golsen, Ms. Kitamura and Mr. Roedel for three-year terms expiring at our 2027 Annual Meeting of stockholders. If elected, the nominees will each hold office until the conclusion of our 2027 Annual Meeting of stockholders and a successor is duly elected and qualified or until earlier death, resignation, or removal.

Agreements as to Certain Directors and Committees

Board Representation and Standstill Agreement

On December 4, 2015, the Company entered into the Board Representation and Standstill Agreement (the "Board Representation and Standstill Agreement"), by and among the Company, LSB Funding LLC ("LSB Funding"), Security Benefit Corporation ("Security Benefit"), Todd Boehly, Jack E. Golsen ("J. Golsen"), Steven J. Golsen ("S. Golsen"), Barry H. Golsen ("B. Golsen"), Linda Golsen Rappaport ("L. Rappaport"), Golsen Family LLC, an Oklahoma limited liability company ("Family LLC"), SBL LLC, an Oklahoma limited liability company ("SBL LLC"), and Golsen Petroleum Corp., an Oklahoma corporation ("GPC," and together with Messrs. J. Golsen, S. Golsen and B. Golsen, Ms. L. Rappaport, Family LLC, SBL LLC, each a "Golsen Holder" and, collectively, the "Golsen Holders"). On October 26, 2017, October 18, 2018, and September 27, 2021 the parties to the Board Representation and Standstill Agreement entered into amendments thereto, and on August 10, 2022, SBT Investors LLC ("SBT Investors") and each of the parties to the Board Representation and Standstill Agreement entered into a letter agreement that, among other things, transferred certain rights of LSB Funding to SBT Investors and further amended the Board Representation and Standstill Agreement (collectively, the "Amendments"). On November 14, 2023, the Company entered into a Joinder Agreement (the "Joinder Agreement") to the Board Representation and Standstill Agreement with TLB-LSB, LLC that transferred certain rights of SBT Investors to TLB-LSB, LLC. The Board Representation and Standstill Agreement, the Amendments and the Joinder Agreement are collectively the "Amended Board Representation and Standstill Agreement".

TLB-LSB, LLC Designees

Pursuant to the Amended Board Representation and Standstill Agreement and based upon the equity holdings of TLB-LSB, LLC and the size of the Company’s Board, the Company has agreed to permit TLB- LSB, LLC to designate up to three nominees to the Board, at least one of which is required to satisfy NYSE standards of independence. Jonathan S. Bobb and Kanna Kitamura are the current TLB-LSB, LLC designees.

Golsen Designees

Under the Amended Board Representation and Standstill Agreement and based upon the Golsen Holders’ equity holdings, the Golsen Holders, collectively, have the right to designate two directors. Messrs. Barry H. Golsen and Steven L. Packebush are the current Golsen designees.

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Other Governance Matters

Our Bylaws provide that the Board may change the total number of directors on our Board from time to time provided that the minimum number of directors is 3 and the maximum is 14. Currently there are 9 directors.

As discussed under "Corporate Governance — Nominating and Corporate Governance Committee," our Nominating and Corporate Governance Committee (the "Nominating Committee") reviews the composition of the Board as part of its assessment of the Board’s performance, and effectiveness. The Nominating Committee values certain characteristics in all Board members, including personal and professional integrity, reputation, outstanding professional achievement, and sound business judgment. The Nominating Committee evaluates each individual director in the context of the Board as a whole with the goal of recommending an effective group with a diversity of experience and skills that exercises sound business judgment in the interest of our business and our stockholders. Consistent with their responsibilities, members of the Nominating Committee have interviewed and evaluated each of the current nominees for director and the Nominating Committee has determined that each is highly qualified to serve as a member of our Board.

The following sets forth certain information regarding the director nominees and other directors whose term will continue after the Annual Meeting.

Nominees for the Class of Directors Whose Term Will Expire in 2027

BARRY H. GOLSEN, J.D.	Barry H. Golsen, J.D., age 73, has been a director of the Company since 1981. His current term expires in 2024. Mr. Golsen is President of GOL Capital LLC. He served as the Vice-Chairman of the Board of the Company from 1993 until 2015. He also served as the Company’s President and Chief Executive Officer from January 2015 until September 2015 and as the Company’s President and Chief Operating Officer from 2004 to 2014. Mr. Golsen joined LSB Industries in 1978 and spearheaded the growth of LSB’s Climate Control Business with the development of innovative and climate-friendly products, a number of business startups, the acquisition of Climate Master, Inc. and its merger with LSB’s CHP Corporation. Under his leadership, LSB’s Climate Control Business attained substantial growth and leading U.S. market shares for its key products. Mr. Golsen attended Cornell University College of Engineering prior to earning both his B.A. and J.D. degrees from the University of Oklahoma. He was admitted to the Oklahoma Bar in 1978. Mr. Golsen is a past Director of the Oklahoma City Branch of the Federal Reserve Bank of Kansas City and served on the Board of Directors of Equity Bank for Savings N.A. His professional affiliations have included the Oklahoma Bar Association, the American Bar Association, the American Society of Heating, Refrigeration and Air-Conditioning Engineers, Young Presidents Organization and World Presidents Organization. Mr. Golsen is a National Association of Corporate Directors ("NACD") Board Leadership Fellow, the Gold Standard Director Credential. NACD Fellowship is a comprehensive and continuous program of study that empowers directors with the latest insight, intelligence and boardroom practices. Mr. Golsen’s extensive experience and his in-depth of knowledge and understanding of the businesses in which we operate, and his demonstrated leadership skills within the Company, among other factors, led the Board to conclude that he should serve as a director. Mr. Golsen is a Golsen designee under the terms of the Amended Board Representation and Standstill Agreement (see page 14).
Age: 73  Director since: 1981    Committees:  Audit  Nominating and  Corporate Governance

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KANNA KITAMURA	Kanna Kitamura, age 51, has been a director of the Company since December 2018. Her current term expires in 2024. Ms. Kitamura is a Principal and Chief Talent Officer at Eldridge. Prior to joining Eldridge, Ms. Kitamura was a Vice President and Head of Legal Operations for Guggenheim Investments. She was a member of Guggenheim Partners’ Women’s Innovation and Inclusion Network, Secretary of the Pro Bono Committee, and acted as a mentor in its Veterans Transition Assistance Program. Previously, Kanna was a VP of Business Development and Director of Operations for a management consulting firm and was employed by the United Nations Development Programme in the Division of Public Affairs. Born in Tokyo, Japan, Kanna was raised in New York, received a B.S. from Georgetown University, and a J.D. from Brooklyn Law School. Ms. Kitamura’s extensive financial industry leadership and legal experience, among other factors, led the Board to determine that she should serve as a director. Ms. Kitamura is a TLB-LSB designee under the terms of the Amended Board Representation and Standstill Agreement (see page 14).
Age: 51  Director since: 2018    Committees:  Compensation  Nominating and  Corporate Governance

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RICHARD W. ROEDEL	Richard W. Roedel, age 74 has been a director of the Company since 2015. His current term expires in 2024. Mr. Roedel serves as the non-executive chairman of LSB. He also is the chairman of the LSB Audit and Nominating and Corporate Governance committees and is a member of the Compensation and Talent Management Committee. Mr. Roedel also serves as a director of BrightView Holdings, Inc., Clarivate Plc and Luna Innovations Incorporated. Mr. Roedel is the Interim Executive Chairman and Interim President of Luna Innovations. He chairs the Audit Committees of BrightView and Clarivate and the Risk Committee of Clarivate. Mr. Roedel served on the board of Six Flags Entertainment from 2010 until he retired from the board in 2021 and IHS Markit from 2005 until he retired in 2020. Mr. Roedel was non-executive chairman of Six Flags at his retirement in addition to chairman of their Nominating and Governance Committee and a member of its Audit Committee. At IHS Markit, Mr. Roedel served as chairman of the Risk Committee and member of its Audit Committee. Mr. Roedel served on the board of Lorillard, Inc. until 2015 when it was acquired by Reynolds American Inc. During his years on the board Mr. Roedel served as chairman of the Audit Committee, a member of the Nominating and Governance Committee and lead independent director. Mr. Roedel served on the board of Sealy Corporation in several capacities, including chairman of it Audit Committee, until 2013 when Sealy was acquired by Tempur-Pedic International Inc. Mr. Roedel served on the Board of Directors of BrightPoint, Inc in several capacities until 2012, when it was acquired by Ingram Micro Inc., including chairman of its Audit Committee, chairman of its Compensation Committee and member of its Nominating and Governance Committee. Mr. Roedel served on the Board of Directors of Broadview Holdings, Inc. and was chairman of its Audit Committee and a member of its Compensation Committees until 2012, following the approval of its financial restructuring plan by the United States Bankruptcy Court, which resulted in a change to its ownership structure. Mr. Roedel served on the Board of Directors of Dade Behring Holdings, Inc. and was chairman of its Audit Committee until 2007 when Dade was acquired by Siemens AG. Mr. Roedel served on the board of Take-Two Interactive Software, Inc. until 2005, initially as chairman of its Audit and Governance Committees, later becoming chairman and chief executive officer. During his career, Mr. Roedel has been chairman of numerous audit, compensation, governance and special committees. Mr. Roedel was previously a member of the National Association of Corporate Directors (NACD) Risk Oversight Advisory Council. Mr. Roedel was appointed to a three-year term, ending in 2017, on the Standing Advisory Group of the Public Company Accounting Oversight Board (PCAOB). Until 2000 Mr. Roedel was employed by BDO Seidman LLP, having been managing partner of its Chicago and New York Metropolitan area offices and later chairman and CEO. Mr. Roedel is a graduate of The Ohio State University and a CPA. Mr. Roedel’s extensive experience in finance, accounting, risk management, and public company governance led the Board to conclude that he should serve as a director.
Age: 74  Director since: 2015    Committees: Audit (Chair) Compensation Nominating and Corporate Governance (Chair)

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE THREE NOMINEES AS DIRECTORS OF THE COMPANY

 

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Continuing Directors

The following six directors will continue in office until the expiration of their respective terms and until their successors have been elected and qualified.

MARK T. BEHRMAN	Mark T. Behrman, age 61, has served as President, CEO and board member of the Company since 2018. His term expires in 2025. Prior to that, Mr. Behrman served as Executive Vice President, Chief Financial Officer from June 2015 through December 2018. Mr. Behrman joined LSB in 2014 as Senior Vice President of Corporate Development. Prior to joining LSB, Mr. Behrman was Managing Director, Head of Investment Banking and Head of the Industrial and Energy Practices of Sterne Agee, Inc., from 2007 to 2014. Mr. Behrman has over 35 years of operational, financial, executive management, and investment banking experience. Mr. Behrman is currently Non-Executive Chairman of the Board of PHX Minerals, Inc. and has served on that board since 2017. He is also a member of its Audit and Compensation Committees. Mr. Behrman has also been a Director of The Fertilizer Institute since 2019. Mr. Behrman previously has served on the board of directors of the following publicly held companies: Noble International Ltd., (a supplier to the automotive industry) from 1998 to 2007, where he also served as Audit Committee Chairman from 1998 to 2003; Oakmont Acquisition Corporation (a special purpose acquisition corporation), from 2005 to 2007 and; Robocom Systems International (a developer and marketer of advanced warehouse management software solutions), from 1998 to 2000. Mr. Behrman holds an MBA in Finance from Hofstra University and a Bachelor of Science in Accounting, Minor in Finance from Binghamton University.
Age: 61  Director since: 2018    Committees:  None

 

JONATHAN S. BOBB	Jonathan S. Bobb, age 48, has been a director of the Company since 2015. His term expires in 2025. Mr. Bobb is a Senior Director on the investment team at Eldridge Industries. In this role, he is responsible for originating, executing and overseeing investments across a range of industries. Mr. Bobb previously served in a similar capacity at Guggenheim Partners. Prior to joining Guggenheim, Mr. Bobb was in the investment banking division at Goldman Sachs & Co. from 2007 to 2013. His previous business experience includes investment banking positions with J.P. Morgan and Deutsche Bank and financial planning roles at Gap Inc. Mr. Bobb serves as a TLB-LSB Designee under the terms of the Amended Board Representation and Standstill Agreement. Mr. Bobb received a B.A. in Economics from Stanford University and an M.B.A. from the University of Michigan.
Age: 48  Director since: 2015  Committees: Audit Compensation

 

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STEVEN L. PACKEBUSH	Steven L. Packebush, age 59, has been a director of the Company since 2020. His term expires in 2026. Mr. Packebush is a founder and partner in Elevar Partners, LLC, a company providing advisory and consulting services and capital solutions for companies in the agriculture and energy markets. Prior to Elevar Partners, Mr. Packebush worked at Koch Industries, Inc. for over 30 years, retiring in March 2018. Until his retirement, he was the president of Koch Ag & Energy Solutions ("Koch Ag"). Under Mr. Packebush’s leadership, Koch Ag grew from a break-even business to one of the larger business units at Koch Industries and one of world’s largest fertilizer companies. Koch Ag manufactured, marketed, distributed, and traded more than 14 million tons of fertilizer products annually. Key to this growth was acquiring and integrating five nitrogen fertilizer production plants in North America and equity interest in three nitrogen plants in Trinidad and Tobago. In addition, significant capital and resources were invested in the North American plants to improve the environmental, health and safety, efficiencies, and reliability of these facilities. Also, a $1.3 billion plant expansion project located in Enid, Oklahoma was executed, and a global fertilizer supply, trading, and distribution business was developed with commercial office locations in Europe, Asia, and Latin America. Mr. Packebush also oversaw the expansion of Koch Ag to include three additional start-up businesses: Koch Energy Services became one of the largest natural gas marketing companies in North America; Koch Methanol supplied methanol to global customers in the plywood, carpet, fuels, and plastics markets; and Koch Agronomic Services became one of world’s largest enhanced-efficiency fertilizer producers and marketers. Prior to his time at Koch Ag, Mr. Packebush held various business development and commercial roles in Koch International, Koch Agriculture, and Koch Minerals. Mr. Packebush serves as a Golsen Designee under the terms of the Amended Board Representation and Standstill Agreement. Mr. Packebush currently serves on the PHX Minerals, Inc. Board of Directors, Kansas State University Dean’s Agriculture Advisory Board, and the Wichita Metropolitan YMCA and YMCA360 Board of Directors. Previously he served on the board of directors of Monolith Materials Inc., EuroChem Group AG, Caribbean Nitrogen, Nitrogen 2000, KOCHPAC, and The Fertilizer Institute. He has also served on The Fertilizer Institute’s executive committee and Koch Industries’ Compliance and Ethics Executive Committees. Mr. Packebush is a 1987 graduate of Kansas State University with a bachelor’s degree in agricultural economics.
Age: 59  Director since: 2020    Committees:  Audit  Nominating and  Corporate Governance

 

 

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DIANA M. PENINGER	Diana M. Peninger, age 59, has been a director of the Company since 2020. Her term expires in 2026. Since 2021, Ms. Peninger, is the President and CEO of Reproductive Solutions, a medical device company located in Dallas, TX. She founded and serves as CEO of Geneva Lake Partners LLC since 2017 which is an advisory firm that works with middle market private industrial companies to help them develop strategic plans to accelerate their growth. She serves on the board of Rogers Group, Inc. since July 2017, chairs the compensation committee and is a member of the audit committee. She served four years as the Board Vice-Chair of the Committee of 200 which is a non-profit organization of the world’s most successful women CEO’s and senior business executives. Ms. Peninger spent 30 years in the chemical industry including three expat assignments in Frankfurt, Germany. In 2018, she served as interim CEO for Synata Bio a renewable clean fuels and chemicals technology company owned by True North Venture Partners. From 2007 through 2016, she held various roles within Celanese Corporation including, Vice President, Acetyl Intermediates, EVA Performance Polymers and Vice President General Manager for Nutrinova Specialty Food Ingredients business. Prior to this, as Director of Corporate Strategy and Business Development, she lead the business development initiatives to establish manufacturing locations in low cost regions of China and Middle East. From 2005 to 2007 while at Chemtura Corp., Ms. Peninger served as Vice President, Consumer Products and Vice President, PVC Additives businesses. She started her career in 1987 with Celanese Corporation in Pampa, Texas as a plant operations engineer before taking on progressively more responsibility including Director of Global Glass Fibers business and leading the integration several large acquisitions resulting in a leading $800M global industry emulsions position. Ms. Peninger holds a B.S. in Chemical Engineering from South Dakota School of Mines and was honored in 2017 with the prestigious "Distinguished Alumni" award for achievement of excellence in their careers and their communities. She is a National Association of Corporate Directors (NACD) Board Leadership Fellow, serves on the NACD North Texas Board and serves on the University Advisory Board for her alma mater.
Age: 59  Director since: 2020    Committees:  Audit  Compensation

 

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RICHARD S. SANDERS, JR	Richard S. Sanders, Jr., age 67, has been a director of the Company since 2014. His term expires in 2025. Mr. Sanders served as our Interim Executive Vice President, Chemical Manufacturing from September 2015 until August 2016. Mr. Sanders has been a nitrogen fertilizer manufacturing consultant since January 2011 through Circle S. Consulting LLC, of which he is the sole owner. Previously, Mr. Sanders served as Vice President of Manufacturing of Terra Industries Inc. from 2003 until the acquisition of Terra Industries by CF Industries Holdings, Inc. in April 2010. On completion of the transaction, he worked on the integration of manufacturing operations, and as Vice President of Environmental Health and Safety, Engineering and Procurement. At Terra Industries Inc., Mr. Sanders was responsible for Terra’s six manufacturing facilities’ overall operations including production operations, environmental health and safety, project engineering, and technical services. He was also responsible for Terra’s capital investment program of approximately $250 million per year, including major expansion projects. Mr. Sanders was Plant Manager of Terra’s Verdigris, Oklahoma nitrogen manufacturing complex for nine years prior to his role as Vice President of Manufacturing. Prior to Terra, Mr. Sanders served as Plant Manager at the Beaumont Methanol Corporation’s 800,000 GPD methanol manufacturing facility and in management and engineering positions for Agrico Chemical Company. Mr. Sanders served as a Non-Executive Director of Open Joint Stock Company Mineral and Chemical Company EuroChem during 2013. Mr. Sanders received a Bachelor of Science degree in Chemical Engineering from Louisiana State University in 1980.
Age: 67  Director since: 2014    Committees:  Audit  Nominating and Corporate Governance

 

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LYNN F. WHITE	Lynn F. White, age 71, has been a director of the Company since 2015. His term expires in 2026. Mr. White founded and has served as the Managing Director of Twemlow Group LLC since 2013, and previously from 2008 until 2009. Twemlow Group LLC is a consulting firm that provides strategic, organizational and product development counsel to agriculturally related businesses. From January to June 2023, Mr. White served as interim President and CEO of Anuvia Plant Nutrients, Inc. where he had served as a director since February 2021 and previously from January 2016 to November 2019. From 2009 to 2013, Mr. White served as Vice President, Corporate Development of CF Industries Holdings, Inc. (NYSE: CF). While at CF Industries, he was responsible for external growth initiatives, including M&A and organic efforts, new product development and strategy, and led the integration of the $4.6 billion acquisition of Terra Industries, Inc. While at CF Industries he served as non-executive Chairman or Vice-Chairman of GrowHow UK Limited, the leading British nitrogen fertilizer producer and as a director of KEYTRADE AG, a major Swiss based fertilizer trading firm. Prior to that, he was the President of John Deere Agri Services, Inc., a subsidiary of Deere & Co. (NYSE:DE), where he was responsible for leading a new global business unit created to pursue growth opportunities in technology-based services for industries linked to agriculture. Mr. White was also Vice President of Global AgServices of Deere, where he was responsible for identifying, testing, and developing new services for agriculture and food. Prior to that, he was Senior Vice President, Corporate Development of IMC Global Inc. (n/k/a The Mosaic Company), a producer of crop nutrients and salt, and served in various executive positions, including General Manager of the Food Ingredients Division, Director of the Flame Retardants & Fluids Business and Europe, Middle East, Africa Agricultural Chemicals Area Director of FMC Corporation (NYSE:FMC), a global producer of chemicals and machinery. Mr. White also served as Vice Chair of the Dean’s Advisory Council for the College of Agriculture, Food and Environmental Sciences at California Polytechnic State University through 2023. Through 2021 he was president and director of the Charlestowne Neighborhood Association (SC), and until 2014 served as a Trustee of the Barrington Hills (IL) Police Pension Fund. Mr. White is also a former director and President of the International Food and Agribusiness Management Association. Mr. White holds a B.A. in History (Highest Honors) from California Polytechnic State University, San Luis Obispo and an M.B.A. in Finance and Multinational Enterprise from the Wharton Graduate School of Business at the University of Pennsylvania.
Age: 71  Director since: 2015    Committees:  Audit  Compensation (Chair)

 

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Proposal 2

Approval of the Amended and Restated Section 382 Rights Agreement

We are asking our stockholders to approve and adopt the Amended and Restated Section 382 Rights Agreement, dated as of August 22, 2023 (the "Amended Rights Agreement"), which amended and restated the Section 382 Rights Agreement, dated as of July 6, 2020 (the "Original Rights Agreement"), by and between the Company and Computershare Trust Company, N.A., a federally charted trust company, as rights agent. The Amended Rights Agreement provides that the Rights (as defined in the Amended Rights Agreement) will no longer be exercisable if the Company’s stockholders do not approve the Amended Rights Agreement at the Annual Meeting. The Amended Rights Agreement is substantially similar to the Original Rights Agreement except that it extends the Final Expiration Date (as defined in the Original Rights Agreement) from July 6, 2023 to August 22, 2026. A summary of the Amended Rights Agreement appears below and is qualified by the full text of the Amended Rights Agreement attached as Appendix A - page 74 to this Proxy Statement.

Background

Our Board believes that our net operating loss carryforwards ("NOLs") have the potential to be a valuable asset. However, because the amount and timing of our future taxable income cannot be accurately predicted, we cannot reliably predict the amount of NOLs that will ultimately be used to reduce the Company’s federal income tax liability. Although we are unable to quantify an exact value for the benefits that the NOLs may ultimately provide us with, we believe that the NOLs are a potentially valuable asset and the Board believes it is in the Company’s best interests to attempt to protect this asset by preventing the imposition of limitations on their use. The benefits of the NOLs would be reduced, and our use of the NOLs would be substantially delayed or potentially lost, if we experience an "ownership change," as determined under Section 382 of the Internal Revenue Code, as amended, and applicable Treasury Regulations ("Section 382").

The purpose of the Amended Rights Agreement is to facilitate the Company’s ability to preserve its NOLs and its other Tax Attributes (as such term is defined in the Amended Rights Agreement) in order to be able to offset potential future income taxes for federal income tax purposes. The Company’s ability to use its NOLs and other Tax Attributes would be substantially limited if it experiences an "ownership change," as such term is defined in Section 382. A company generally experiences an ownership change if the percentage of the value of its stock owned by certain "5-percent shareholders," as such term is defined in Section 382, increases by more than 50 percentage points over a rolling three-year period. The Amended Rights Agreement is intended to reduce the likelihood of an ownership change under Section 382 by deterring any Person (as such term is defined in the Amended Rights Agreement) or group of affiliated or associated Persons from acquiring Beneficial Ownership (as defined below) of 4.9% or more of the outstanding Common Shares (as defined below).

Pursuant to the terms of the Amended Rights Agreement, the Rights issued pursuant to the Amended Rights Agreement will expire if stockholder approval has not been received following the final adjournment of the Annual Meeting. Thus, the Board is submitting the Amended Rights Agreement for stockholder approval.

Description of the Tax Benefits Preservation Plan

In connection with entry into the Original Rights Agreement, the Board declared a dividend of one preferred share purchase right (a "Right"), payable on July 16, 2020 for each outstanding share of common stock, par value $0.10 per share, of the Company (the "Common Shares") outstanding on July 16, 2020 (the "Record Date") to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series G Class C Preferred Stock, no par value, of the

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Company (the "Preferred Shares") at a price of $10.00 per one one-thousandth of a Preferred Share represented by a Right (the "Purchase Price"), subject to adjustment.

Distribution Date; Exercisability; Expiration

Initially, the Rights are attached to all Common Share certificates (or other evidence of book-entry or other uncertificated ownership) and no separate certificates evidencing the Rights ("Right Certificates") will be issued. Until the Distribution Date (as defined below), the Rights will be transferred with and only with the Common Shares. As long as the Rights are attached to the Common Shares, the Company will issue one Right with each new Common Share so that all such Common Shares will have Rights attached (subject to certain limited exceptions).

The Rights will separate and begin trading separately from the Common Shares, and Right Certificates will be caused to evidence the Rights, on the earlier to occur of (i) the Close of Business (as such term is defined in the Amended Rights Agreement) on the tenth day following a public announcement, or the public disclosure of facts indicating, that a Person or group of affiliated or associated Persons has acquired Beneficial Ownership of 4.9% or more of the outstanding Common Shares (an "Acquiring Person") (or, in the event that the Board of Directors determines to effect an exchange in accordance with Section 24 of the Amended Rights Agreement and the Board of Directors determines that a later date is advisable, then such later date) and (ii) the Close of Business on the tenth Business Day (as such term is defined in the Amended Rights Agreement) (or such later date as may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) following the commencement of a tender offer or exchange offer the consummation of which would result in the Beneficial Ownership by a Person or group of 4.9% or more of the outstanding Common Shares (the earlier of such dates, the "Distribution Date"). As soon as practicable after the Distribution Date, unless the Rights are recorded in book-entry or other uncertificated form, the Company will prepare and cause the Right Certificates to be sent to each record holder of Common Shares as of the Distribution Date.

An "Acquiring Person" will not include (i) the Company, (ii) any Subsidiary (as such term is defined in the Amended Rights Agreement) of the Company, (iii) any employee benefit plan of the Company or of any Subsidiary of the Company, (iv) any entity holding Common Shares for or pursuant to the terms of any such employee benefit plan or (v) any Person who or which, together with all Affiliates and Associates (as such terms are defined in the Amended Rights Agreement) of such Person, as of August 22, 2023, is a Beneficial Owner of 4.9% or more of the Common Shares then outstanding (a "Grandfathered Stockholder"). However, if a Grandfathered Stockholder becomes, after such time, the Beneficial Owner of any additional Common Shares (regardless of whether, thereafter or as a result thereof, there is an increase, decrease or no change in the percentage of Common Shares then outstanding Beneficially Owned (as such term is defined in the Amended Rights Agreement) by such Grandfathered Stockholder) then such Grandfathered Stockholder shall be deemed to be an Acquiring Person unless, upon such acquisition of Beneficial Ownership of additional Common Shares, such person is not the Beneficial Owner of 4.9% or more of the Common Shares then outstanding. In addition, upon the first decrease of a Grandfathered Stockholder’s Beneficial Ownership below 4.9%, such Grandfathered Stockholder will no longer be deemed to be a Grandfathered Stockholder. In the event that after August 22, 2023, any agreement, arrangement or understanding pursuant to which any Grandfathered Stockholder is deemed to be the Beneficial Owner of Common Shares expires, is settled in whole or in part, terminates or no longer confers any benefit to or imposes any obligation on the Grandfathered Stockholder, any direct or indirect replacement, extension or substitution of such agreement, arrangement or understanding with respect to the same or different Common Shares that confers Beneficial Ownership of Common Shares shall be considered the acquisition of Beneficial Ownership of additional Common Shares by the Grandfathered Stockholder and render such Grandfathered Stockholder an Acquiring Person for purposes of the Amended Rights Agreement unless, upon such acquisition of Beneficial Ownership of additional Common Shares, such person is not the Beneficial Owner of 4.9% or more of the Common Shares then outstanding.

 

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"Beneficial Ownership" is defined in the Amended Rights Agreement to include any securities (i) which a Person or any of such Person’s Affiliates or Associates (a) actually owns (directly or indirectly) or would be deemed to actually or constructively own for purposes of Section 382 of the Code or the Treasury Regulations (as such terms are defined in the Amended Rights Agreement) promulgated thereunder, including any coordinated acquisition of securities by any Persons who have a formal or informal understanding with respect to such acquisition (to the extent ownership of such securities would be attributed to such Persons under Section 382 of the Code and the Treasury Regulations promulgated thereunder), (b) beneficially owns, directly or indirectly, within the meaning of Rules 13d-3 or 13d-5 promulgated under the Exchange Act or (c) has the right or ability to vote, or the right to acquire, pursuant to any agreement, arrangement or understanding (except under limited circumstances), (ii) which are directly or indirectly Beneficially Owned by any other Person with which a Person has any agreement, arrangement or understanding for the purpose of acquiring, holding or voting such securities, or obtaining, changing or influencing control of the Company or (iii) which are the subject of, or reference securities for, or that underlie, certain derivative positions of any Person or any of such Person’s Affiliates or Associates; provided, that a Person shall not be deemed to be the Beneficial Owner of, or to Beneficially Own, (x) securities tendered pursuant to a tender or exchange offer made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act until such tendered securities are accepted for purchase or exchange or (y) any shares of the Company’s Preferred Stock or Class C Preferred Stock (other than the Preferred Shares).

The Rights are not exercisable until the Distribution Date. The Rights will expire on the earliest to occur of (i) the Close of Business on the day following the certification of the voting results of the Annual Meeting, if at such Annual Meeting a proposal to approve the Amended Rights Agreement has not been passed by the affirmative vote of the majority of the votes cast at the Annual Meeting or any other meeting of stockholders of the Company duly held prior to such meeting, (ii) the date on which the Board of Directors determines in its sole discretion that (x) the Amended Rights Agreement is no longer necessary for the preservation of material valuable NOLs or Tax Attributes or (y) the NOLs and Tax Attributes have been fully utilized and may no longer be carried forward and (iii) the Close of Business on August 22, 2026 (the "Final Expiration Date").

Exempt Persons and Transactions

The Board of Directors may, in its sole and absolute discretion, determine that a Person is exempt from the Amended Rights Agreement (an "Exempt Person"), so long as such determination is made prior to such time as such Person becomes an Acquiring Person. Any Person will cease to be an Exempt Person if the Board of Directors makes a contrary determination with respect to such Person regardless of the reason therefor. In addition, the Board of Directors may, in its sole and absolute discretion, exempt any transaction from triggering the Amended Rights Agreement, so long as the determination in respect of such exemption is made prior to such time as any Person becomes an Acquiring Person. Any Person, together with all Affiliates and Associates of such Person, who proposes to acquire 4.9% or more of the outstanding Common Shares may apply to the Board of Directors in advance for an exemption in accordance with and pursuant to the terms of the Amended Rights Agreement.

Flip-in Event

If a Person or group becomes an Acquiring Person at any time after the date of the Amended Rights Agreement (with certain limited exceptions), the Rights will become exercisable for Common Shares having a value equal to two times the exercise price of the Right. From and after the announcement that any Person has become an Acquiring Person, if the Rights evidenced by a Right Certificate are or were acquired or Beneficially Owned by an Acquiring Person or any Associate or Affiliate of an Acquiring Person, such Rights shall become void, and any holder of such Rights shall thereafter have no right to exercise such Rights. If the Board of Directors so elects, the Company may deliver upon payment of the exercise price of a Right an amount of cash, securities or other property equivalent in value to the Common Shares issuable upon exercise of a Right.

 

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Exchange

At any time after any Person becomes an Acquiring Person, the Board of Directors may exchange the Rights (other than Rights owned by any Person which have become void), in whole or in part, at an exchange ratio of one Common Share per Right (subject to adjustment). The Company may issue, transfer or deposit such Common Shares (or other property as permitted under the Amended Rights Agreement) to or into a trust or other entity created upon such terms as the Board of Directors may determine and may direct that all holders of Rights receive such Common Shares or other property only from the trust or other entity. In the event that the Board of Directors determines, before the Distribution Date, to effect an exchange, the Board of Directors may delay the occurrence of the Distribution Date to such time as it deems advisable.

Flip-over Event

If, at any time after a Person becomes an Acquiring Person, (i) the Company consolidates with, or merges with, any other Person (or any Person consolidates with, or merges with, the Company) and, in connection with such consolidation or merger, all or part of the Common Shares are or will be changed into or exchanged for stock or other securities of any other Person or cash or any other property or (ii) 50% or more of the Company’s consolidated assets or Earning Power (as defined in the Amended Rights Agreement) is sold, then proper provision will be made so that each holder of a Right will thereafter have the right to receive, upon the exercise thereof at the then current exercise price of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the exercise price of the Right.

Redemption

At any time prior to the earlier to occur of (i) the Close of Business on the tenth day following the Stock Acquisition Date (as defined in the Amended Rights Agreement) (or, if the tenth day following the Stock Acquisition Date occurs before the Record Date, the Close of Business on the Record Date) and (ii) the Final Expiration Date, the Board of Directors may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (the "Redemption Price"). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price.

Amendment

The terms of the Rights may be amended by the Board of Directors without the consent of the holders of the Rights, except that at any time after the Close of Business on the tenth day following the Stock Acquisition Date (or, if the tenth day following the Stock Acquisition Date occurs before the Record Date, the Close of Business on the Record Date), no such amendment may adversely affect the interests of the holders of the Rights (other than the Acquiring Person and its Affiliates and Associates).

Preferred Stock Rights

Each one-thousandth of a Preferred Share will entitle the holder thereof to the same dividends and liquidation rights as if the holder held one Common Share and will be treated the same as a Common Share in the event of a merger, consolidation or other share exchange.

Rights of Holders

Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends.

The Board has determined that the Amended Rights Agreement is advisable and, in the Company’s, and the stockholders’ best interests because the entry into and maintenance of the Amended Rights Agreement:

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Please also consider the items discussed below when voting on this Proposal No. 2.

The IRS could challenge the amount of the Company’s NOLs or claim that the Company experienced an ownership change, which could reduce the amount of NOLs that the Company could use or eliminate the Company’s ability to use NOLs altogether.

The Internal Revenue Service (the "IRS") has not audited or otherwise validated the amount of the Company’s NOLs. The IRS could challenge the amount of the Company’s NOLs, which could limit the Company’s ability to use NOLs to reduce future tax liabilities. In addition, the complex provisions of Sections 382 and the limited knowledge that any public company has about the ownership of its publicly traded stock can make it difficult for the Company and its advisors to determine whether an ownership change has occurred. Therefore, the Board cannot assure you that the IRS will not claim that the Company has experienced an ownership change and attempt to reduce or eliminate the benefits associated with the Company’s NOLs - even if the Amended Rights Agreement is in place.

Congress or the IRS could change Section 382 and/or the regulations promulgated thereunder.

The Tax Cuts and Jobs Act of 2017 will affect the Company’s ability to use NOLs generated in taxable years beginning after December 31, 2017, to offset the Company’s income tax obligations. Other potential future legislation, or the modification or promulgation of treasury regulations by the IRS, could change the provisions of Section 382 and/or other applicable provisions of the Code and treasury regulations in a manner that would limit the Company’s ability to utilize its NOLs. Therefore, the Board cannot assure you that tax laws and applicable treasury regulations will not change in a manner that could reduce or eliminate the benefits associated with the Company’s NOLs - even if the Amended Rights Agreement is in place.

The Company still faces a continued risk of an ownership change.

Although the Amended Rights Agreement is intended to reduce the likelihood of an ownership change, the Amended Rights Agreement cannot prevent transfers of the Company’s stock that could result in an ownership change. Accordingly, the Board cannot guarantee you that the Amended Rights Agreement will prevent or even reduce the risk of an ownership change.

The Amended Rights Agreement could impact on the value of the Common Stock.

If investors object to holding the Common Stock subject to the terms of the Amended Rights Agreement, the Amended Rights Agreement could depress the value of the Common Stock by an amount that could more than offset any value preserved by protecting the Company’s NOLs.

Certain Considerations Related to the Amended Rights Agreement

The Board believes that the Amended Rights Agreement may help preserve the Company’s ability to use its NOLs to reduce future tax liabilities and that the Amended Rights Agreement is in the Company’s and the stockholders’ best interests. However, the possibility of an ownership change cannot be eliminated and the Board cannot guarantee that an ownership change will not occur - even if the Amended Rights Agreement is in place.

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Potential Anti-Takeover Effects.

While intended to reduce the risk of an ownership change, the Amended Rights Agreement could have certain anti-takeover effects. The Rights will cause substantial dilution to any person or group that becomes an Acquiring Person. Accordingly, the Rights may render more difficult, or discourage, a merger, tender offer, proxy contest or assumption of control by a holder of the Common Stock or other Company securities. However, because the Board can unilaterally redeem the Amended Rights Agreement prior to any person become an Acquiring Person, the Amended Rights Agreement will not interfere with any merger, change in control or other business combination approved by the Board.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE AMENDED AND RESTATED SECTION 382 RIGHTS AGREEMENT

 

 

 

 

 

Proposal 3

Ratification of the Appointment of Ernst & Young LLP as the Independent Registered Public Accounting Firm for 2024

The Audit Committee has appointed the firm of Ernst & Young LLP ("E&Y") as its independent registered public accounting firm for 2024.We are asking our stockholders to ratify this appointment.

E&Y has served as our auditors for more than five years, including the fiscal year most recently completed. If the stockholders do not ratify the appointment of E&Y, the Audit Committee will reconsider the appointment and may or may not consider the appointment of another independent registered public accounting firm for the Company for 2024 or future years.

Consistent with past practices, it is expected that one or more representatives of E&Y will attend the Annual Meeting and will be available to respond to appropriate questions or make a statement should they desire to do so.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2024

 

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Proposal 4

Advisory Vote to Approve Named Executive Officer Compensation

We are asking our stockholders to approve the following advisory resolution related to the compensation of the Company’s named executive officers ("NEOs") commonly known as a "say-on-pay" proposal:

RESOLVED, that the stockholders approve, on a non-binding advisory basis, the compensation of the NEOs for the fiscal year ended December 31, 2023, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables, and the related narrative discussion in this Proxy Statement.

Our stockholders’ opinions are important to us, and we hold this advisory vote annually in order to get a better understanding of their views on the compensation of our NEOs and its alignment with stockholder interests. The Board and the Compensation and Talent Management Committee, which is composed of independent directors, will review and take into account the outcome of this vote when considering future executive compensation decisions.

Stockholders are encouraged to read the Compensation Discussion and Analysis, the accompanying compensation tables, and the narrative disclosure related to executive compensation disclosure in this Proxy Statement, which provide information about our compensation policies and the compensation of our NEOs. Stockholders should note that, because the advisory vote on executive compensation occurs well after the beginning of the compensation year, and because the different elements of our executive compensation program is designed to operate in an integrated manner and to complement one another, it may not be appropriate or feasible to change our executive compensation program in consideration of any one-year’s advisory vote on executive compensation by the time of the following year’s Annual Meeting of stockholders.

The Board intends to hold this vote annually, and the next advisory vote to approve NEO compensation will occur in 2025.

 

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL, ON AN ADVISORY BASIS, OF THE RESOLUTION TO APPROVE THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION

 

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Corporate Governance

 

Corporate Governance Highlights The Board is committed to continually improving its corporate governance processes, practices and procedures. Our governance policies and structures are designed to promote the Board’s thoughtful oversight of the Company’s business decisions and ensure intelligent risk-taking, with the goal of furthering our long-term strategic goal of becoming a best-in-class chemical producer. Highlights include: • A diverse Board with the appropriate mix of skills, experience and perspective. 22% of our directors are women and one of our directors is a member of a minority group; • The appointment of a non-Executive Chairman of the Board; • Eight of our nine directors are independent under NYSE listing standards, with Mr. Behrman, our President and CEO as the only non-independent director. While Mr. Behrman is not deemed independent, we believe his interests are aligned with the Company’s as a result of his significant ownership interest in the Company; • All Board committees are fully independent; • Policy limiting the number of public company boards on which directors may serve; • A portion of all executives’ annual compensation is tied to the achievement of environmental and safety metrics, reflecting the importance of our employees and their safety to the Company; • Minimum share ownership guidelines for Directors and requirements for Executive Officers; • Anti-Hedging of Company Securities Policy; • A global Anti-Bribery and Corruption Policy; and • Stockholder ratification of the selection of external audit firm.

Corporate Responsibility

Overview

As a public company and as a member of the communities where we live and work, it is our obligation to maximize long-term value of the Company for all our stakeholders, including our employees, customers, stockholders, the communities where we operate and the environment. We do this by focusing on safety throughout the Company, on efficiently operating our business and on actively implementing efficient capital management strategies. As we work to achieve success in these endeavors, we are constantly mindful of our responsibility as an organization to be a good corporate citizen. In every facet of operating our company, our decisions are guided by our Core Values, which are intended to lead us toward minimizing any negative impacts our operations may have on the aspects of our society and environment that we come in contact with, while also diligently seeking ways to improve society and the environment.

We are committed to being a leader in the energy transition through the production of low and no carbon products that build, feed and power the world. LSB is dedicated to building a culture of excellence in customer experiences as we deliver essential products across the agricultural, industrial, and mining end markets and, in the future, the energy markets. Building culture is not simply a priority or an initiative. Our efforts to develop and grow our culture are continuous, never-ending and are delivering impactful outcomes throughout our organization.

Risk Management and Strategy

We recognize the importance of developing, implementing, and maintaining robust cybersecurity measures to maintain the security, confidentiality, integrity, and availability of our business systems and commercially sensitive or confidential information. Our business depends on the proper functioning and availability of our information technology platform, including communications and data processing systems. We are also

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required to effect electronic transmissions with third parties including clients, vendors and others with whom we do business, and with our Board. We also recognize that, as we continue to increase our dependence on information technologies to conduct our operations the risks associated with cyber security also increase.

LSB utilizes an enterprise-wide risk management process to identify, assess and manage risks faced by our organization. The Company’s Enterprise Risk Management Committee ("ERM Committee"), is designated with the responsibility to direct our risk management program and to execute our risk management strategy, including cyber and technology risk. The ERM Committee is the management-entity designated by the Chief Executive Officer with the responsibility to direct and execute our risk governance and strategy, including cyber risk. This ERM Committee is composed of the Company’s Executive Vice Presidents and each of the Company’s Senior Vice Presidents. Our Senior Vice President and Treasurer chairs the ERM Committee. To protect our information systems and operations from risks and to execute our cyber strategy, we use various security processes and technology tools that help identify, investigate, assess, prevent, and resolve potential vulnerabilities and security incidents in a timely manner. These include, but are not limited to, detection, monitoring and reporting tools. Our team uses widely adopted methods and models to identify, prioritize and manage cyber and technology risks and develop related information security controls and safeguards. In partnership with third party advisors and consultants, we conduct regular reviews and tests of our program and leverage audits, penetration and vulnerability testing, cyber risk tabletops and security awareness trainings, and other cyber exercises to evaluate the effectiveness of our program and improve our security measures. Our information security policies are designed to address current applicable legal requirements and to align with recognized frameworks for cyber risk management. These standards cover physical, administrative, and technical controls and address a wide range of current cyber threats. These policies and standards are reviewed and updated on a regular basis in order to respond to the constantly changing threat landscape.

Governance of Cybersecurity Matters

Our Board of Directors considers cybersecurity to be a business risk and oversees enterprise-wide risks through the Audit Committee. The Audit Committee is designated by the Board with the responsibility for monitoring and reporting on management’s cybersecurity and risk management processes. The Vice President for Information Technology ("IT") leads the information security program, manages cyber governance and incident management. The Vice President of IT and the Director of Infrastructure and Security have over forty-five years of combined information technology experience and over a decade of cybersecurity experience. The ERM Committee and Vice President for IT assess cyber risk and provide recommendations for management. The Chair of the ERM Committee and the Vice President for IT brief the Audit Committee regularly. These updates include an overview of cyber risk management activities, cyber threats, and key information security processes and mitigation efforts. The Chair of the Audit Committee provides regular reports to the Board of Directors on critical cyber risk and security topics presented to the Committee by management.

Incident Management

We have implemented security procedures and measures in order to protect our information from being vulnerable to theft, loss, damage or interruption from a number of potential sources or events. LSB maintains and tests an incident response plan that outlines steps for the containment, investigation of, response to and recovery from cyber events. The plan also includes information pertaining to roles, responsibilities, and reporting process. This plan is a part of our formal, enterprise-wide crisis management process, which outlines a communication plan with executive leadership as well as guidelines for communication with the Board of Directors. Although we make efforts to maintain the security and integrity of our information systems and technology operations, these systems are subject to the cyber risk of incident or disruption, and there can be no assurance that our security safeguards, and those of our third-party providers, will prevent incidents to our or our third-party providers’ systems that could adversely affect our business. For a discussion of these risks, see "Item 1A. Risk Factors—General Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2023

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Board Oversight of ESG

Our Board is engaged in overseeing our business strategies and related risks and opportunities. This includes Environmental, Social and Governance ("ESG") topics. The Committees of the Board facilitate oversight of issues that impact many areas of our business, and the Board and various Committees continue to review the manner in which oversight of ESG topics is exercised. Committees report to the full Board on key issues. Examples of ESG oversight include:

Board Diversity

We believe that having a mix of directors on the board who are from varied backgrounds and who bring a diverse range of perspectives and insights, foster enhanced decision-making, promote better corporate governance and build board capability.

Our belief is reflected in our Corporate Governance Guidelines, which recognizes that only highly qualified candidates with the right personal qualities (such as leadership skills, integrity, time and commitment), core business skills and industry experience will be considered as board members. While the qualifications of each individual director are paramount, diversity criteria relating to the director’s age, tenure, geographic location, education, gender and ethnicity must also be given due consideration. Our Corporate Governance Guidelines include diversity criteria to formally acknowledge the Company’s goal to include, women and minority candidates in its director search process. Our guidelines confirm our commitment to diversity and inclusion and the diversity criteria that are always considered. Of our current directors, two are women and one of our female directors is a member of a minority group. Our Corporate Governance Guidelines are available for Review at www.lsbindustries.com/investors.

Executive Diversity

We believe that a diverse workplace culture drives enhanced decision-making and can influence employee attraction and retention, as well as customer satisfaction. Diversity in our business creates long-term value by aligning LSB’s business perspectives with an increasingly diverse customer base, building the capability to operate in our markets and enabling the Company to recruit from a larger talent pool. Within our senior executive leadership team, as is the case within the Company as a whole, the level of representation from diverse groups is a criterion that we give due consideration when identifying candidates for senior leadership roles. We do not mandate specific diversity targets in hiring executive officers due to the small size of this group and the need to carefully consider a broad range of criteria. Of our current senior executive team, three are women, including one of our NEOs, and one of our executives is a member of a minority group.

Meetings of the Board

Our Board held 6 meetings in 2023. Like many companies, we moved to a blend of in person and virtual meetings. We have found the virtual meeting format works well and we will continue to review the right mix of in-person and virtual meetings going forward. All directors attended 99% of the combined total of the meetings held by the Board and the meetings held by all committees of the Board on which each director served.

 

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Board Leadership Structure

Mr. Roedel has served as Chairman of the Board since 2018. The responsibilities of the Chairman of the Board generally include:

The Board reviews the appointment of the Chairman on an annual basis.

Committees of the Board of Directors and Committee Charters

The Board has three separately designated active standing committees: a Nominating and Corporate Governance Committee, an Audit Committee, and a Compensation and Talent Management Committee. The Board has adopted written charters for each of these committees. The Board has determined that all members of these committees are independent directors and satisfy the Securities and Exchange Commission ("SEC") and NYSE requirements for independence. A current copy of the charters of the aforementioned committees along with our corporate governance guidelines are available on our website at www.lsbindustries.com and are also available from the Company upon request to our Corporate Secretary. The following sets forth the current members of each committee and current Board class expiration year:

 

Name	Class			Age		Director Since	Audit			Nominating and Corporate Governance			Compensation
Mark T. Behrman		2025		61		2018
Jonathan S. Bobb		2025		48		2015		X						X
Richard Sanders, Jr.		2025		67		2014		X			X
Steven L. Packebush		2026		59		2020		X			X
Diana M. Peninger		2026		59		2020		X						X
Lynn F. White		2026		71		2015		X						Chair
Barry H. Golsen		2024		73		1981		X			X
Kanna Kitamura		2024		51		2018					X			X
Richard W. Roedel		2024		74		2015		Chair			Chair			X

Director Statistics

 

Gender Diversity	Racial Diversity	Average Age			Independence	Average Tenure
22%	11%		63		89%		10

 

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Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee ("Nominating Committee") consists entirely of independent directors who were appointed by the Board to serve until their successors are appointed and qualified. The Board determined that each member of the Nominating Committee is independent in accordance with the listing standards of the NYSE. During 2023, the Nominating Committee held 4 meetings.

The Nominating Committee is primarily responsible for:

The Nominating Committee periodically assesses the skills and experience needed for the Board to properly direct the business and affairs of the Company. The Nominating Committee seeks Board candidates possessing the following qualities:

The Nominating Committee evaluates the skills, qualifications, experience and expertise of candidates to determine director nominees. For incumbent directors, the factors also include past performance on the Board and contributions to their respective committees.

The Nominating Committee is also responsible for:

The Nominating Committee considers the qualifications of director candidates recommended by stockholders and evaluates each of them using the same criteria the Nominating Committee uses for incumbent or other candidates identified by the Nominating Committee. Director candidate recommendations by stockholders must be made in compliance with the procedures set forth in our Bylaws by notice in writing delivered or mailed by first class U.S. mail, postage prepaid, to the Chairman of the Nominating and Corporate Governance Committee, in care of our Corporate Secretary, LSB Industries, Inc., 3503 NW 63rd Street, Suite 500, Oklahoma City, Oklahoma 73116. Please indicate "Nominating and Corporate Governance Committee" on the envelope.

 

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Audit Committee

The Audit Committee assists the Board in (i) overseeing the accounting, reporting, and financial practices of the Company and its subsidiaries, (ii) preparing the report required by the SEC to be included in the Company’s annual proxy and (iii) providing oversite of the Company’s Enterprise Risk Management program.

In carrying out these purposes, the Audit Committee, among other things, is responsible for:

During 2023, the Audit Committee held 8 meetings.

Audit Committee Financial Expert

In 2023, the Board evaluated the members of the Audit Committee and believes that each member of the Audit Committee is financially literate and that each member has sufficient background and experience to fulfill the duties of the Audit Committee. The Board has determined that Mr. Roedel satisfies the definition of "audit committee financial expert" under the NYSE listing standards and applicable SEC regulations.

 

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Audit Committee Report The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for establishing and maintaining adequate internal controls over financial reporting, including disclosure controls and procedures, and for preparing the Company’s consolidated financial statements. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited consolidated financial statements of the Company and its subsidiaries and management’s report on the Company’s internal control over financial reporting in the 2023 annual report with management. The Audit Committee also reviews the Company’s quarterly and annual reporting on Forms 10-Q and 10-K prior to filing with the SEC. The Audit Committee’s review process includes discussions of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and estimates and the clarity of disclosures in the financial statements. The independent registered public accounting firm is responsible for expressing opinions on the conformity of the consolidated financial statements with accounting principles generally accepted in the United States and the effectiveness of the Company’s internal control over financial reporting. The Audit Committee has discussed with the independent registered public accounting firm the matters that are required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. In addition, in accordance with the rules of the PCAOB, the Audit Committee has discussed with and has received the written disclosures and letter from the independent registered public accounting firm regarding its independence from management and the Company. The Audit Committee also has considered whether the independent registered public accounting firm’s provision of non-audit services to the Company is compatible with maintaining the firm’s independence. The Audit Committee discussed their overall audit scopes and plans separately with the Company’s internal auditors and independent registered public accounting firm. The Audit Committee meets with the internal auditors and the independent registered public accounting firm, with and without management present, to discuss the results of their audits, evaluations by management and the independent registered public accounting firm of the Company’s internal control over financial reporting and the overall quality of the Company’s financial reporting. The Audit Committee also meets privately with the Company’s compliance officer. The Audit Committee held eight meetings during 2023. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors (and the Board approved) that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and filed with the SEC. The Audit Committee also reappointed Ernst & Young LLP as the Company’s independent registered public accounting firm for 2024. Stockholders are being asked to ratify that selection at the 2024 Annual Meeting. Submitted by the Audit Committee of the Company’s Board of Directors.
	Richard W. Roedel Chair Jonathan S. Bobb Barry H. Golsen Steven L. Packebush Diana M. Peninger Richard S. Sanders, Jr. Lynn F. White
Notwithstanding anything to the contrary set forth in our filings under the Securities Act of 1933, as amended, or the Exchange Act that might incorporate by reference previous or future filings, including this Proxy Statement, in whole or in part, the foregoing report of the Audit Committee and any statements regarding the independence of the Audit Committee members shall not constitute soliciting material and shall not be deemed filed or incorporated by reference into any such filings, except to the extent the Company specifically incorporates this Report or any such statements therein.

 

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Fees Paid to Independent Registered Public Accounting Firm

Audit Fees

The aggregate fees billed by E&Y for professional services rendered for the audit of our annual financial statements for the fiscal years ended December 31, 2023 and 2022, for the reviews of the financial statements included in our Quarterly Reports on Form 10-Q for those fiscal years, and for review of SEC-related documents for those fiscal years were approximately $1,168,550 and $1,547,450, respectively.

Audit-Related Fees

E&Y billed us $43,450 and $41,800 during 2023 and 2022 for audit related services, which included services relating to our benefit plan audits.

Tax Fees

E&Y billed us $145,277 and $127,996 during 2023 and 2022, respectively, for tax services, tax consultations and planning.

All Other Fees

E&Y billed us $15,034 during 2022 (none in 2023), for financial and tax due diligence related services.

Engagement of the Independent Registered Public Accounting Firm

The Audit Committee is responsible for approving all engagements with E&Y to perform audit or non-audit services for us prior to us engaging E&Y to provide those services. All of the services outlined under the headings "Audit Related Fees," "Tax Fees," and "All Other Fees," above were approved by the Audit Committee. The Audit Committee of our Board has considered whether E&Y’s provision of the services described above for the fiscal years ended December 31, 2023 and 2022 is compatible with maintaining its independence.

Audit Committee’s Pre-Approval Policies and Procedures

All audit and non-audit services that may be provided to us by our principal accountant, E&Y, require pre-approval by the Audit Committee. The Audit Committee delegates such pre-approval of services to the Chairman of the Audit Committee. The Audit Committee or the Chairman of the Audit Committee evaluates the pre-approval request to determine the appropriateness of the proposed project and proposed fee. Further, E&Y may not provide to us those services specifically prohibited by the SEC.

Oversight of Risk Management

The Board oversees management’s risk management activities, including those relating to credit risk, liquidity risk, cyber risk, and operational risk, through a combination of processes. The Board believes effective risk management will enable us to accomplish the following:

In addition to the Company’s compliance program, the Board encourages management to promote a corporate culture that incorporates risk management into the Company’s corporate strategy and day-to-day business operations. The Board also continually works, with the input of the Company’s executive officers, to assess and analyze the most likely areas of future risk for the Company.

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The Audit Committee is responsible for overseeing the Company’s policies with respect to risk assessment and risk management relating to the Company’s major financial risk exposures and to review and discuss such material risks and the steps taken to monitor and control such exposures.

Enterprise Risk Management

As discussed on page 30, LSB has a robust enterprise risk management program that facilitates identification, communication and management of the most significant risks throughout the Company. We employ a formalized framework in which risk, governance and oversight are largely embedded in our organization and control structures. Included in our formal process are regular risk assessments. The purpose of these risk assessments is:

The risk assessment is performed through information gathering, analysis and meetings with members of the manufacturing, commercial, sales, logistics, finance, legal and other teams across the organization.

The Company's ERM Committee is designated with the responsibility to direct our risk management program and to execute our risk management strategy, including cyber and technology risk. The Audit Committee is primarily responsible for the risk oversight function and regularly reports to the full Board on the enterprise risks, including on management’s cybersecurity and risk management process. The ERM Committee reports directly to the Audit Committee on risk management matters and management regularly provides reports to the Audit Committee and the full Board. We believe that our leadership structure supports the Board’s risk oversight.

Code of Ethics

The Chief Executive Officer, the Chief Financial Officer, the principal accounting officer, treasurer, and, or persons performing similar functions, are subject to our Code of Ethics for CEO and Senior Financial Officers. Additionally, we and each of our subsidiary companies have adopted a Code of Conduct applicable to all of the employees, officers and directors of the Company and its subsidiaries.

Our Code of Ethics for CEO and Senior Financial Officers and Code of Conduct are available on our website at www.lsbindustries.com. We will post any amendments to these documents, as well as any waivers that are required to be disclosed pursuant to the rules of either the SEC or the NYSE, on our website (to the extent applicable to the Company’s executive officers, senior financial officers or directors).

Anti-Bribery and Corruption Policy

LSB has an Anti-Bribery and Corruption Policy which memorializes our commitment to adhere faithfully to both the letter and spirit of all applicable anti-bribery legislation in the conduct of our business activities worldwide.

Compensation and Talent Management Committee

Our Compensation and Talent Management Committee (the "Compensation Committee") is comprised of non-employee, independent directors in accordance with the rules of the NYSE. During 2023, the Compensation Committee held 5 meetings.

The Compensation Committee’s responsibilities include, among other duties:

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Recommendations regarding non-equity compensation of our non-executive officers and our NEOs are made by our CEO, other than decisions related to the CEO’s own compensation, and are presented for discussion with the Compensation Committee.

During 2023, the agenda for meetings of the Compensation Committee was determined by its Chairman with the assistance of our CEO. Compensation Committee meetings are regularly attended by the CEO. The Compensation Committee also meets regularly in executive session without the CEO. The Compensation Committee may delegate authority to the CEO in order to fulfill certain administrative duties regarding the executive compensation program.

The Compensation Committee has authority under its charter to retain, approve fees for, and terminate advisors, consultants and agents as it deems necessary to assist in the fulfillment of its responsibilities. If a compensation consultant is engaged, the Compensation Committee reviews the total fees paid to such outside consultant by the Company to ensure that the consultant maintains its objectivity and independence when rendering advice to the Compensation Committee. During 2023, the Compensation Committee retained Compensation Strategies, Inc. ("Compensation Strategies") as its independent compensation consultant to advise the Compensation Committee on matters related to executive and non-employee director compensation. For information regarding the compensation consultant, please see page 43 regarding the "Executive Compensation — Compensation Discussion and Analysis-Use of Compensation Consultant" in this Proxy Statement.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee has the authority to determine the compensation of all of our officers. The Compensation Committee considered the recommendations of the CEO when setting the compensation of our officers. During 2023, the CEO did not make any recommendation regarding the CEO’s own compensation. None of the members of the Compensation Committee is an officer or employee of the Company or any of its subsidiaries or had any relationship requiring disclosure by the Company under Item 404 of Regulation S-K during 2023. No executive officer of the Company served on any board of directors or compensation committee of any other company for which any of our directors served as an executive officer at any time during 2023.

Board Independence

At least annually, the Board receives a report on all commercial, consulting, legal, accounting, charitable or other business relationships that a Director or the Director’s immediate family members have with the Company and its subsidiaries. This report includes all ordinary course transactions with entities with which the Directors are associated.

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As a result of its review process, the Board affirmatively determined that 8 of its 9 Directors are independent. The only member of the Board who is not independent is Mr. Behrman, who is the President and CEO of the Company.

Communication with the Board

Our Board believes that it is important for us to have a process whereby stockholders may send communications to the Board. Stockholders and interested parties who wish to communicate with the Board, the Chairman, the independent directors as a group, or a particular director, may do so by sending a letter to the Chairman of the Board of Directors at 3503 NW 63rd Street, Suite 500, Oklahoma City, Oklahoma 73116. Please indicate on the mailing envelope a clear notation indicating that the enclosed letter is a "Stockholder-Board Communication" or "Stockholder-Director Communication." All such letters must identify the author as a stockholder or an interested party and clearly state whether the intended recipients are all members of the Board, the Chairman, the independent directors, non-management directors, or only certain specified individual directors. The Chairman will make copies of all such letters and circulate them to the appropriate director or directors.

Policy as to Related Party Transactions

Pursuant to the Audit Committee Charter, our Audit Committee reviews any related party transactions involving any of our directors and executive officers. The Audit Committee believes that it considers all relevant facts and circumstances in its review process.

During 2023, LSB did not have any related party transactions requiring review by the Audit Committee or the Board as a whole.

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Our Named Executive Officers

MARK T. BEHRMAN		Mr. Behrman, age 61, became our President and Chief Executive Officer effective December 30, 2018. He served as the Company’s Executive Vice President and Chief Financial Officer from June 2015 and its Senior Vice President of Corporate Development beginning in March 2014. Mr. Behrman’s biographical information is set forth on page 18 of this Proxy.

 

CHERYL A. MAGUIRE		Ms. Maguire, age 46, became the Company’s Executive Vice President and Chief Financial Officer in January 2020. She was previously the Company’s Senior Vice President and Chief Financial Officer. She joined the Company as Vice President, Financial Planning and Accounting in November 2015. She has more than 20 years of financial and accounting experience across manufacturing and energy industries. Prior to joining the Company, Ms. Maguire served as a Senior Manager of financial planning and analysis with LyondellBasell, a large international plastics, chemicals and refining company, from July 2012 to June 2015. Ms. Maguire was previously head of external reporting, corporate accounting, accounting policy and financial analysis at Petroplus, a European Refining company. During her career, Ms. Maguire was integral to the financial integration of large-scale acquisitions, the execution of multiple debt and equity transactions and the implementation of several corporate restructurings and business turnarounds. She began her career at Grant Thornton LLP. Ms. Maguire holds a Bachelor of Business Administration from the University of Prince Edward Island and is a certified public accountant.

 

MICHAEL J. FOSTER		Mr. Foster, age 57, became the Company’s Executive Vice President, General Counsel and Secretary on December 30, 2018. He joined the Company as Senior Vice President, General Counsel and Secretary in January 2016. Immediately prior to joining the Company, Mr. Foster was engaged in the private practice of law. From 2007 to 2014 Mr. Foster served as the Senior Vice President, General Counsel and Secretary for Tronox (NYSE:TROX), a global mining and manufacturing firm. Before his appointment as the Tronox General Counsel, Mr. Foster served as its Managing Counsel leading the operations of the Tronox legal team following its spin-off from Kerr-McGee Corporation. Prior to the Tronox spin-off, Mr. Foster served as a member of the Kerr-McGee legal team. His earlier experience includes nearly five years in the midstream energy industry and more than five years in the public and private practice of law. Mr. Foster holds a Bachelor of Science degree in Agriculture Science from the University of Illinois Urbana-Champaign and a Juris Doctor degree from the University of Tulsa.

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JOHN P. BURNS		Mr. Burns, age 60, became the Company’s Executive Vice President, Manufacturing of the Company in February 2020. He brings 30 years of operating experience in petroleum refining and chemical manufacturing industries including 8 years of experience in the nitrogen-based fertilizers and industrial feedstocks sector. His leadership roles include Reliability Engineering Manager, Area Operations Manager, Engineering and Maintenance Manager, Director of Operations Excellence and Vice President of Operations leading multiple facilities. In these roles, he has improved performance in the key operating categories of safety, environmental stewardship, production performance and cost, and product quality. He has demonstrated skills and capability in process safety excellence, leadership development and coaching, competitive benchmarking, dynamic work design, lean process implementation and digital innovation. John graduated from Texas A&M University, College Station, TX with a BS in Engineering Technology and Texas A&M University, Corpus Christi, TX with an MBA.
DAMIEN J. RENWICK		Mr. Renwick, age 47, became the Company’s Executive Vice President and Chief Commercial Officer in January 2021. Mr. Renwick has more than 17 years of experience in the chemical industry, most recently with Houston-based Cyanco where he was President of Cyanco International and held the additional position of Chief Commercial Officer. Prior to this, Mr. Renwick was with Perth, Australia-based Wesfarmers Limited, one of Australia’s largest listed companies. There he held various positions of increasing responsibility in the Chemicals, Energy and Fertilizers division, including Director and General Manager of Australian Gold Reagents, and Commercial Manager, Ammonium Nitrate. Mr. Renwick has led and executed multiple significant commercial transactions to underpin large-scale capital investment projects, led large improvements in operating and safety performance of product on plants and been deeply involved in numerous capital growth projects and acquisition and divestment transactions and evaluations. He began his career with Arthur Andersen in its consulting division. Mr. Renwick holds a Bachelor of Engineering (Honors) and a Bachelor of Commerce from the University of Western Australia.

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Executive Compensation

Compensation Discussion and Analysis

Overview of Executive Compensation Program

This Compensation Discussion and Analysis describes our compensation philosophy, objectives, policies and practices framed within the context of the chemical manufacturing industry, our specific strategy and the performance of our NEOs for 2023.

Our NEOs for 2023 were:

Mark T. Behrman	President and Chief Executive Officer
Cheryl A. Maguire	Executive Vice President and Chief Financial Officer
Michael J. Foster	Executive Vice President, General Counsel and Secretary
John P. Burns	Executive Vice President, Manufacturing
Damien J. Renwick	Executive Vice President and Chief Commercial Officer

Compensation Principles

Our executive compensation program ties strategy and performance to compensation, including equity-based compensation. This is intended to focus our executive team on the long-term success of the Company and to further align their interests with the interests of our stockholders. Our executive compensation program is designed to assist us in attracting, motivating and retaining exceptional talent with skills across a diverse set of capabilities. This allows us to continue improving our operational and financial performance, which is essential to achieving the long-term success of our business and the sharing our success with our customers, stockholders and other stakeholders.

The following principles guide the Compensation Committee in the management, design, and administration of LSB’s executive compensation program, while supporting the core value of our compensation philosophy of pay-for-performance:

The following summarizes how we seek to achieve our compensation principles, and highlights key risk-mitigating features incorporated into our processes and programs:

Compensation Plan Design

✓	Executive compensation program is simple and transparent;
✓	Compensation is balanced between fixed and variable compensation, with a significant part of NEO total direct compensation (salary plus annual incentive plus long-term incentive) being at-risk;
✓	Level of fixed compensation is designed to promote retention;
✓	Performance targets are derived from LSB’s annual business plan and longer-term strategic business plan objectives;
✓	Long-term incentive plan has threshold performance levels (below which payouts are not made) and is capped at two times target payout;
✓	Total direct compensation is benchmarked versus relevant peers while also considering internal equity and other factors; and
✓	Judgment is applied to address individual circumstances.

 

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Corporate Governance

✓	Independent Compensation Committee oversees all aspects of executive compensation to assess potential impact on business risk (including human resource risk);
✓	Compensation Committee retains an independent compensation consultant;
✓	Incentive Compensation Recoupment Policy applies to incentive-based compensation;
✓	NEOs are subject to mandatory Management Stock Ownership Guidelines;
✓	Directors and officers are subject to an insider trading and anti-hedging and pledging policy;
✓	Double trigger change in control provisions, requiring both a change in control and a qualifying termination of the executive’s employment, are embedded in employment contracts and long-term incentive plans; and
✓	Stockholders have an annual "say on pay" vote.

The Compensation Committee reviews and recommends to the Board the compensation philosophy, strategy and principles, and program design, as well as oversees the administration of our executive compensation plans, policies and programs.

The Compensation Committee is composed of independent directors who have been determined by the Board to possess human capital literacy, meaning an understanding of compensation theory and practice, human resources management and development, succession planning and executive development. Such knowledge and capability includes: (i) current or prior experience working as a chief executive or senior officer of a major organization (which provides significant financial and human resources experience), (ii) involvement on board compensation committees of other entities, (iii) experience and education pertaining to financial accounting and reporting, which is integral to managing executive incentive compensation, and/or (iv) familiarity with internal financial controls. This knowledge and experience, in conjunction with a comprehensive compensation decision-making process and the support of its independent compensation consultant, enables the Compensation Committee to formulate informed compensation recommendations for Board approval. One of the primary purposes of the Committee is to assist the Board in fulfilling its oversight responsibilities for executive compensation. Together with the Board, the Compensation Committee is committed to getting LSB’s approach to human capital and talent management matters and compensation right, both for stockholders and for the Company’s long-term success. The executive compensation elements of our Compensation Committee’s charter focus on:

To support the decision-making process, the Compensation Committee receives input from management and an independent compensation consultant. The Compensation Committee considers the data provided by and the advice of its independent compensation consultant, as well as many other factors. Ultimately, all decisions and recommendations to the Board are the Committee’s own. The Compensation Committee reviews the performance goals for the CEO, assesses the CEO’s performance, and makes compensation recommendations for the CEO to the other independent members of the Board for approval. With respect to the other executive officers, the CEO’s assessment of their performance is taken into account by the Committee when making compensation recommendations to the Board. The Compensation Committee reviews and approves the compensation structure and evaluation process for the CEO and the executives who report directly to the CEO.

Executive Compensation Program Risk Management

We endeavor to mitigate executive compensation risk through appropriate oversight of our executive compensation program, through our executive compensation plan design (as outlined below) and through our corporate governance policies. We also seek to motivate certain behaviors that encourage appropriate

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risk-taking to drive performance in accordance with our risk profile. As part of its risk management role, the Compensation Committee:

Our executive compensation program is designed to provide competitive levels of reward that are responsive to Company and individual performance but do not incentivize risk taking that is reasonably likely to have a material adverse effect on the Company. In reaching the conclusion that our executive compensation program does not create risks that are reasonably likely to have a material adverse effect on us, the Compensation Committee examined the various elements of our executive compensation program and our risk mitigation controls. In particular, numerous factors were considered, including:

Specific corporate governance policies related to compensation risk management include:

These policies are available for review at:

https://investors.lsbindustries.com/corporate-governance-highlights

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The three elements of total direct compensation for our NEOs are: (i) base salary, (ii) short-term incentive awards and (iii) long-term incentive awards. Unlike base salary, which is fixed annually, short-term and long-term incentive awards each represent variable, at risk, compensation. These three elements are balanced such that a portion of each NEO’s compensation is contingent on performance over both the short and longer-term. The Compensation Committee has adopted and implemented core principles that form the framework for our executive compensation program. We believe that the Company’s executive compensation program clearly aligns executive compensation opportunities with our Company’s long-term strategic plan and provide accountability for long-term results.

Compensation Philosophy –

How Executive Pay is Linked to Company Performance

Our executive compensation program is designed to incentivize and motivate our executive officers to lead and manage our business well over the long-term, to drive performance improvements, and to increase stockholder value. It is also designed to enable us to compete effectively with other companies in attracting, motivating and retaining talented executives.

The incentive compensation elements of our program are designed to align closely the financial interests of our executives with those of our stockholders. We believe the portion of compensation that is at-risk and tied to organization-wide performance metrics should increase as the level of responsibility increases.

Because of the inherent risk in chemical operations, we place a high priority on our leaders to create, maintain and reinforce a strong safety culture. Because of the environmental risks in our business, we place a high priority on managing our operations responsibly and sustainably.

We regularly assess how our executive compensation program compares to companies with a similar profile to ours. Our objective is to deliver compensation at a competitive market level that will enable executive officers who demonstrate consistent performance over a multi-year period to earn compensation that is competitive and consistent with or above targeted total compensation. Conversely, the program is designed to pay less than the annual target compensation when performance does not meet expectations. Individual executive compensation may be above or below the annual targeted compensation level, based on our performance; economic and market conditions; the individual’s performance, contribution to the organization, experience, expertise, and skills; and other relevant factors. Please see our Compensation Framework below for further information on this topic.

Compensation Framework

In accordance with our compensation philosophy, the salary and benefits for NEOs provide the secure fixed compensation component that the Compensation Committee feels is necessary to attract and retain key executive talent. The combination of annual and long-term incentives is designed to motivate the execution of our business strategy in a manner that creates stockholder value while retaining executive talent and aligning our executives' interests with those of our stockholders.

The combination of the fixed and at-risk compensation components provides our executives with a competitive compensation package that is designed to meet our needs and the expectations of our stockholders. Our 2023 compensation elements include:

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Compensation Element	Performance Period	Performance Measures	Purpose of Compensation Element
Base Salary	· Not applicable	· Pay aligned with scope of responsibilities and experience	· Provides competitive fixed pay
Performance Annual Incentive Award (Short-Term Incentive)	· 1 year	· Environmental, Health & Safety · Financial and operational performance measures	· Promotes achievement of shorter-term performance goals
Equity Grants (Long-Term Incentive)	· 3 years	Depending on form of grant: · Time-based (vesting ratably over 3 years) · Relative stock-based performance metrics	· Aligns NEOs’ and stock-holders’ interests · Retains talent with long-term wealth accumulation opportunities · Ties compensation to a longer-term performance goal, in the case of PSUs
Perquisites and Other Benefits	· Not applicable	· Not applicable	· Allows the Company to remain competitive among its peers to attract and retain key talent

 

For 2023, the pay mix, as between salary, short-term incentives and long-term incentives, is below, determined using actual amounts earned for short-term incentives and assuming target performance for long-term incentives, where applicable, and based on the grant date fair value of any equity awards.

 

Role of Executive Officers in Compensation Decisions

Our CEO annually reviews the performance of each of our NEOs (other than himself) and provides recommendations to the Compensation Committee with respect to salary, STI Plan and 2016 LTIP

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compensation, and other benefits for such executive officers. The Compensation Committee reviews these recommendations while considering the Company’s compensation philosophy and objectives. In determining recommendations for the the compensation for our CEO, the Compensation Committee reviews his responsibilities and performance. Such review includes regular meetings with our CEO, consideration of the Compensation Committee’s observations of his performance during the applicable year, and overall Company performance against short-term and long-term goals. When appropriate, NEOs are invited by the Compensation Committee to provide insight regarding Company and individual performance and feedback regarding compensation structure. NEOs are not present at any meeting of the Compensation Committee while their own compensation is being discussed or determined.

Compensation Peer Group

LSB benchmarks NEO compensation levels using a peer group of companies (the "Compensation Peer Group"). The Compensation Committee annually commissions its independent compensation consultant to review the criteria and composition of the peer group. The Compensation Peer Group utilized in making the compensation decisions for 2023 was comprised of the following companies:

Advansix Inc.

American Vanguard Corporation

Balchem Corporation

Compass Minerals International, Inc.

CSW Industrials, Inc.

CVR Partners, LP

Ecovyst, Inc.

Hawkins, Inc.

Haynes International, Inc.

Ingevity Corporation

Intrepid Potash, Inc.

Livent Corp.

Orion Engineered Carbons S.A.

Quaker Chemical Corporation

Overall, the Committee uses a number of factors when determining the compensation for each executive, including a broad range of market data, corporate performance, executive performance, competitive labor conditions, among others.

The Compensation Committee, in consultation with its compensation consultant, evaluates the composition of the Compensation Peer Group by evaluating, among other things, the industry or business models, annual revenues, market capitalization, and geographic locations of potential Compensation Peer Group companies, as well as those companies that are perceived competitors for talent. After reviewing the Compensation Peer Group, the Compensation Committee, in consultation with its compensation consultant, determined to add Compass Minerals International, Inc. and Orion Engineered Carbons S.A., remove Chase Corporation and otherwise retain the peer group of companies that was in effect for 2022 for purposes of 2023 compensation-related decisions based on the annual revenue and market capitalization of the Company.

Setting Executive Compensation

The Compensation Committee annually sets cash and non-cash executive compensation to reward the NEOs for achievement of, and to motivate the NEOs to achieve, near-term and long-term business objectives. The Compensation Committee also reviews the compensation information of our Compensation Peer Group companies. As described in more detail below, in 2023, the Compensation Committee engaged Compensation Strategies as its independent compensation consultants to assist the Compensation Committee in conducting its review of our executive compensation program. The information provided by the independent compensation

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consultant is used to determine how our executive compensation program compares to those of our Compensation Peer Group and the market generally, as further described below.

In setting compensation, the Compensation Committee also considers the allocation between cash and non-cash compensation amounts, and near-term and long-term compensation, but does not have a specific formula or required allocation between such compensation types. In each case, such allocation is considered as part of the overall compensation determination.

During 2023, the Compensation Committee compared the CEO’s total compensation to the total compensation of our other NEOs. However, the Compensation Committee has not established a target ratio between total compensation of the CEO and the median total compensation level for the next lower tier of management. The Compensation Committee also considers internal pay equity among the NEOs and in relation to the next lower tier of management and average compensation of all employees to maintain compensation levels that are consistent with the individual contributions and responsibilities of those NEOs. The Compensation Committee does not consider amounts payable under severance agreements when setting the annual compensation of the NEOs.

Base Salary

The Compensation Committee annually reviews and adjusts salaries based on changes in the market, including Compensation Peer Group data, responsibilities and performance against job expectations, strategic importance and experience and tenure. The following table sets forth the base salaries for each of our NEOs as of the end of 2023. The Compensation Committee, based upon its annual review and overall market conditions, approved increases to the base salaries of each of our NEOs for 2024. The increases went into effect on March 30, 2024.

 

Named Executive Officer		2023 Base Salary					2024 Base Salary
Mark T. Behrman		$	725,000				$	747,000
Cheryl A. Maguire		$	425,000				$	438,000
Michael J. Foster		$	422,000				$	434,000
John P. Burns		$	379,000				$	390,000
Damien J. Renwick		$	379,000				$	390,000

Short-Term (Annual) Incentive Plan

NEOs participate in the Company’s Short-Term Incentive Plan (the "STI Plan"), our annual performance bonus plan. The STI Plan provides the opportunity for annual cash payments tied directly to the achievement of key pre-established financial and operational goals. The Compensation Committee sets goals derived from our strategic plan that are designed to align the interests of our NEOs with the interests of our stockholders.

Our STI Plan is a key element in supporting our pay-for-performance philosophy. Each NEO’s annual incentive opportunity is determined by performance in up to three categories, with an emphasis on key operating and financial metrics:

Annual incentive targets are set as a percentage of salary, with actual payouts based on a performance multiplier dependent on the achievement of predetermined annual goals. The annual incentive targets for Messrs. Behrman, Burns, and Foster and Ms. Maguire were established in their respective employment agreements. Mr. Renwick’s payout target was established upon his beginning employment with the Company. At the end of each year, the Compensation Committee determines the actual achievement of each performance goal. The Compensation Committee and the Board have the ability to apply informed judgment to adjust outcomes based on market, operational and other realities that may not have been contemplated in the scorecard formula. In 2023, the Compensation Committee exercised its judgment and adjusted the STI by

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applying a multiplier between 1.1 and 1.2 to the bonus amounts earned based on the achievement of the annual goals described above and below.

 

 

Category	Performance Metric
Environmental, Health & Safety performance	Achieve Total Recordable Injury Rate (TRIR) company-wide Achieve Process Safety Tier I Incidents (PSI) company-wide Achieve Reportable Environmental Events company-wide
LSB Corporate Financial Performance	Achieve Adjusted EBITDA at budget
Production Rates	Achieve NH3 production at budget

 

 

NEO	2023 Salary			Target Annual Incentive (% of Salary)	Safety & Environmental Performance		Adjusted EBITDA		NH3 Production		Overall Multiplier	Overall Payout (% of Target)	2023 STI Plan Payout
					Weight	Weighted Payout (1)	Weight	Weighted Payout (2)	Weight	Weighted Payout (3)
Mark T. Behrman	$	725,000		110%	25%	42%	50%	0%	25%	21%	120%	76%	$	603,000
Cheryl A. Maguire	$	425,000		75%	25%	42%	50%	0%	25%	21%	120%	76%	$	241,000
Michael J. Foster	$	422,000		70%	25%	42%	50%	0%	25%	21%	120%	76%	$	223,000
John P. Burns	$	379,000		70%	25%	42%	50%	0%	25%	21%	110%	69%	$	184,000
Damien J. Renwick	$	379,000		70%	25%	42%	50%	0%	25%	21%	120%	76%	$	200,000

 

Long-Term (Equity) Incentive Plan

We award long-term performance equity awards to our NEOs under the terms of the 2016 Long Term Incentive Plan, as amended and restated March 4, 2021 (the "2016 LTIP") that was approved by stockholders at the 2021 Annual Meeting of stockholders. The Compensation Committee, with the input of its independent compensation consultant, designed the 2016 LTIP to align NEO compensation with stockholders’ interests and to serve as a retention tool. The Compensation Committee believes the 2016 LTIP allows us to continue to motivate our NEOs through the grant of equity-based awards and will also increase the Compensation Committee’s flexibility to grant different types of equity, equity-based, and cash awards in the future.

The Compensation Committee evaluates each NEO’s performance on an annual basis and grants equity awards, and, for each NEO, determines the allocation between time-based grants and performance-based grants.

Both the time-based and the performance-based awards generally vest over a three-year period. Time-based awards, in the form of restricted stock units, vest one-third on each of the first three anniversaries of the date of grant. Performance-based awards, in the form of performance-based restricted stock units, vest at the end of the three-year performance measurement period. We believe both award types link the value of payments to the long-term results of the Company.

The 2023 grants for each of our NEOs included performance-based and time-based restricted stock units. The performance metric for the 2023 performance-based grants was total shareholder return (TSR) relative to a

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peer group measured annually over a three-year performance period. The peer group utilized for relative TSR ranking included the following companies: The Andersons, Advansix, American Vanguard, CF Industries, Chemtrade Logistics, Compass Minerals, Ecovyst, ICL Group, Intrepid Potash, Methanex, Mosaic, Nutrien, OCI, CVR and Yara International. The Compensation Committee determined that this performance metric was a good measure of overall Company performance. For performance on the relative TSR metric that is above the threshold, vesting will result in a range of 50%-200% of the target vesting.

Perquisites and Other Personal Benefits

The Compensation Committee believes that perquisites and personal benefits can be an appropriate component of total compensation that can contribute to our ability to attract and retain talented executives. Accordingly, the Company provided our NEOs with limited perquisites and personal benefits in 2023 that were consistent with our overall executive compensation program, including an automobile allowance for Messrs. Behrman, Foster and Renwick and country club dues for Mr. Behrman.

The Compensation Committee periodically reviews the levels of perquisites provided to the NEOs to determine whether such perquisites are consistent with our compensation policies.

Consideration of Stockholder Say-On-Pay Advisory and Say-on-Frequency Votes

At our Annual Meeting of stockholders held in May 2023, approximately 97% of the total votes cast on our say-on-pay proposal approved the compensation of our NEOs on a non-binding, advisory basis. The Compensation Committee and the Board believe that this affirms our stockholders’ support of our approach to executive compensation and did not make any changes as a direct result of this vote. Any concerns and comments raised by our stockholders related to our executive compensation program are considered by the Compensation Committee as it completes its periodic reviews of our executive compensation program and considers any potential changes to the program.

The Compensation Committee will continue to consider any and all feedback it receives from stockholders and proxy advisory firms when making future compensation decisions for our NEOs, including when negotiating any future employment agreements.

In accordance with the advisory vote on the frequency of the stockholder advisory vote on executive compensation submitted to the stockholders at the Company Annual Meeting of stockholders held in May 2023, the Company will continue to hold a stockholder advisory vote on executive pay on an annual basis until the next required advisory vote on the frequency of such votes which, in accordance with applicable law, will occur no later than the Company’s 2029 annual meeting.

 

 

Use of Compensation Consultants

The Compensation Committee has the sole authority to hire and terminate its independent compensation consultant, approve its compensation, determine the nature and scope of its services, and evaluate its performance. In 2023, the Compensation Committee engaged Compensation Strategies as its compensation consultant to provide information to the Compensation Committee to assist it in making determinations regarding our executive compensation program for our NEOs and non-employee directors.

In August and November 2023, Compensation Strategies provided the Compensation Committee with, among other things, a competitive pay analysis comparing the compensation of our executive officers against peer group compensation statistics, 2024 program design advice, an independent review of 2024 compensation proposals developed by management, comparative analysis of non-employee director compensation, including compensation for the regular and special committees of the Board, review of trends and regulatory developments, and assistance with peer group review.

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A representative from Compensation Strategies attended the January, March, May, August, and November meetings of the Compensation Committee during 2023. Compensation Strategies did not perform any other services for the Company or its management other than those described above.

Compensation Strategies provides information and data to the Compensation Committee from its surveys, proprietary databases and other sources, which the Compensation Committee utilizes along with information provided by management and obtained from other sources. In making its decisions, the Compensation Committee reviews such information and data provided to it by Compensation Strategies and management and also draws on the knowledge and experience of its members as well as the expertise and information from within the Company, including from the Company’s human resources, legal, and finance groups. The Compensation Committee considers executive and non-employee director compensation matters at its quarterly meetings and at special meetings as needed based on our annual compensation schedule.

In connection with its engagement of Compensation Strategies, the Compensation Committee considered various factors bearing upon Compensation Strategies’ independence including, but not limited to, the amount of fees received by Compensation Strategies from the Company as a percentage of Compensation Strategies’ total revenue, Compensation Strategies’ policies and procedures designed to prevent conflicts of interest, and the existence of any business or personal relationship that could impact Compensations Strategies’ independence. After reviewing these and other factors, the Compensation Committee determined that Compensation Strategies is independent and that its engagement did not present any conflicts of interest. In 2023, we paid Compensation Strategies for the services it provided to the Compensation Committee.

Employment Agreements

The Compensation Committee believes that executive employment agreements are an integral component of our competitive executive compensation program. Our employment agreements are an important risk management tool that creates continuity in severance and other benefits upon certain termination events. Messrs. Behrman, Burns and Foster and Ms. Maguire are each a party to an executive employment agreement in the Company’s standard form, which was implemented in 2018. Mr. Renwick is not party to an employment or severance agreement with the Company.

Mark T. Behrman

2018 Behrman Agreement—On December 30, 2018, we entered into an employment agreement with Mr. Behrman. The employment agreement provides in part that Mr. Behrman will:

Following his termination of employment, Mr. Behrman will be subject to non-competition and non-solicitation restrictions for a period of 24 months. For information regarding the provisions of the agreement related to change in control and severance payments, please see "Potential Payments Upon Termination or Change in Control" on page 59.

John P. Burns

2019 Burns Agreement—On December 20, 2019, we entered into an employment agreement with Mr. Burns. The agreement provides that Mr. Burns will:

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Following his termination of employment, Mr. Burns will be subject to non-competition and non-solicitation restrictions for a period of 24 months. For information regarding the provisions of the agreement related to change in control and severance payments, please see "Potential Payments Upon Termination or Change in Control" on page 59.

Michael J. Foster

2018 Foster Agreement—On December 30, 2018, we entered into an employment agreement with Mr. Foster. The agreement provides in part that Mr. Foster will:

Following his termination of employment, Mr. Foster will be subject to non-competition and non-solicitation restrictions for a period of 24 months. For information regarding the provisions of the agreement related to change in control and severance payments, please see "Potential Payments Upon Termination or Change in Control" on page 59.

Cheryl A. Maguire

2018 Maguire Agreement—On December 30, 2018, we entered into an employment agreement with Ms. Maguire. The agreement provides in part that Ms. Maguire will:

Following her termination of employment, Ms. Maguire will be subject to non-competition and non-solicitation restrictions for a period of 24 months. For information regarding the provisions of the agreement related to change in control and severance payments, please see "Potential Payments Upon Termination or Change in Control" on page 59.

Management Stock Ownership Guidelines

Beginning in April 2017, the Compensation Committee approved stock ownership guidelines that are intended to further align the interests of our NEOs with the interests of our stockholders by requiring the NEOs to hold significant levels of Company stock. In keeping with our overall compensation philosophy, we believe that the equity ownership levels that they are required to maintain are high enough to appropriately incentivize our NEOs’ commitment to long-term value creation. The Compensation Committee evaluates the Stock Ownership Guidelines at least annually. The terms of our Management Stock Ownership Guidelines are set out below:

Term	Component/Description
	Position	Guidelines

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	Chief Executive Officer	5x base salary
Target Ownership Amount(1)	Chief Financial Officer	3x base salary
	Other NEOs(1)	3x base salary
Shares Counted Towards Ownership	• Shares owned outright or held in trust • Time-based vesting restricted stock units • The target number of any performance shares or units
Compliance Period	• The later of April 26, 2022 or 5 years from hire/promotion into covered role
Tracking Achievement	• Measure compliance on December 31 each year using 90-trading day average stock price • Notify participants and Compensation Committee of compliance/progress towards meeting guidelines
Controls	• Once the guideline is met, participants are expected to maintain share ownership pursuant to the guideline thereafter • Should a participant who previously met the guideline subsequently fall below the guideline for any reason, they will be required to meet the guideline within 2 years

As of December 31, 2023, each of our NEOs exceeded the stock ownership guidelines.

Tax and Accounting Implications

When setting executive compensation, we consider many factors, such as attracting and retaining executives and providing appropriate performance incentives. We also consider the after-tax cost to the Company in establishing executive compensation program, both individually and in the aggregate, but tax deductibility is not our sole consideration. Section 162(m) of the Internal Revenue Code generally disallows a federal income tax deduction to public companies for annual compensation over $1 million (per individual) paid to their chief executive officer, chief financial officer, and the next three most highly compensated executive officers (as well as certain other executive officers whose compensation may have been subject to this limitation in prior tax years). As a result, we do not expect the compensation payable to covered employees, including our NEOs, in excess of $1 million per person in a year to be fully deductible and we have paid and will continue to pay compensation that is limited in deductibility, in whole or in part.

We consider the accounting impact reflected in our financial statements when establishing the amounts and forms of executive compensation. We account for stock-based incentive compensation expense in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation ("FASB ASC Topic 718").

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Compensation Committee Report The Compensation Committee of the Board of Directors reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based on our review and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2023. This report is provided by the following independent Directors, who comprise the Compensation Committee.
	Lynn F. White (Chair) Jonathan S. Bobb Kanna Kitamura Diana M. Peninger Richard W. Roedel
The foregoing Report of the Compensation Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent the Company specifically incorporates this Report.

 

 

Executive Compensation Tables

2023 Summary Compensation Table

The following table summarizes the compensation of the NEOs for 2023, 2022 and 2021 in accordance with SEC reporting rules.

 

Name and Principal Position	Year					Salary $					Bonus $					Stock Awards(1) $					Non-Equity Incentive Plan Compensation(2) $					All Other Compensation(3) $					Total $
Mark T. Behrman			2023				$	725,000				$	—				$	3,146,428				$	603,000				$	13,405				$	4,487,833
President and Chief			2022				$	676,000				$	—				$	2,089,578				$	926,120				$	12,815				$	3,704,513
Executive Officer			2021				$	650,000				$	250,000				$	1,787,997				$	786,500				$	7,800				$	3,482,297
Cheryl A. Maguire			2023				$	425,000				$	—				$	568,923				$	241,000				$	1,052				$	1,235,975
Executive Vice President			2022				$	384,800				$	—				$	432,449				$	369,000				$	—				$	1,186,249
and Chief Financial Officer			2021				$	370,000				$	100,000				$	369,999				$	313,390				$	—				$	1,153,389
Michael J. Foster			2023				$	422,000				$	—				$	563,583				$	223,000				$	7,800				$	1,216,383
Executive Vice President,			2022				$	405,600				$	—				$	456,273				$	389,000				$	7,800				$	1,258,673
General Counsel and Secretary			2021				$	390,000				$	100,000				$	389,999				$	330,330				$	7,800				$	1,218,129
John P. Burns			2023				$	379,000				$	—				$	379,304				$	184,000				$	1,540				$	943,844
Executive Vice			2022				$	364,000				$	—				$	306,448				$	349,000				$	—				$	1,019,448
President - Manufacturing			2021				$	350,000				$	—				$	262,998				$	222,338				$	—				$	835,336
Damien J. Renwick			2023				$	379,000				$	—				$	379,304				$	200,000				$	8,939				$	967,243
Executive Vice President			2022				$	330,000				$	—				$	281,496				$	345,500				$	8,379				$	965,375
and Chief Commercial Officer			2021				$	288,462				$	—				$	150,002				$	200,000				$	67,868				$	706,332

 

(1) The amounts shown in this column represent the aggregate grant date fair value of the stock awards granted to our NEOs computed in accordance with FASB ASC Topic 718, determined without regard to estimated forfeitures. The amounts likely do not reflect the actual value that will be recognized by the NEOs. For performance-based awards that were based on relative TSR, the grant date fair value was determined based on Monte Carlo simulation whereas the grant date fair value of performance-based awards based on other performance conditions that were granted in 2020 and 2021 were based on the market price of our stock at the time of the grant. If the performance-based awards were achieved at the highest level of performance, the aggregate value (based on the market price of our stock price at the date of the grant) of the performance-based awards granted during 2023 would be $2,356,000 for Mr. Behrman, $426,000 for Ms. Maguire, $422,000 for Mr. Foster, $284,000 for Mr. Burns, and $284,000 for Mr. Renwick.

(2) The amounts shown in this column represent the actual amounts earned under the STI Plan for fiscal year ended December 31, 2023. For further details regarding these awards, see " Executive Compensation-Compensation Discussion and Analysis-Compensation Framework-Short-Term (Annual) Incentive Plan."

(3) For 2023, "All Other Compensation" includes

• For Messrs. Behrman, Foster and Renwick $7,800 for an automobile allowance.

• For Mr. Behrman $5,605 for club related dues and spouse airfare. For Mr. Renwick $1,139 for spouse airfare. For Mr. Burns $1,540 for spouse airfare. For Ms. Maguire $ 1,052 for spouse airfare.

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2023 Grants of Plan-Based Awards

The following table sets forth information concerning grants of plan-based awards to our NEOs during the fiscal year ended December 31, 2023.

								Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)								Estimated Future Payouts Under Equity Incentive Plan Awards(2)
Name		Grant Date			Date Approved by Board			Target ($)				Maximum ($)				Threshold (#)					Target (#)(3)				Maximum (#)				All Other Stock Awards: Number of Shares of Stock or Units (#)(4)				Grant Date Fair Value of Stock Awards ($)(5)
Mark T. Behrman			1/25/2023			1/25/2023			$	797,511			$	1,450,020				47,731					95,462				190,924				95,462			$	3,146,428
Cheryl A. Maguire			1/25/2023			1/25/2023			$	318,750			$	510,000				8,631					17,261				34,522				17,261			$	568,923
Michael J. Foster			1/25/2023			1/25/2023			$	295,400			$	590,800				8,550					17,099				34,198				17,099			$	563,583
John P. Burns			1/25/2023			1/25/2023			$	265,300			$	379,000				5,754					11,508				23,016				11,508			$	379,304
Damien J. Renwick			1/25/2023			1/25/2023			$	265,300			$	379,000				5,754					11,508				23,016				11,508			$	379,304

 

 

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2023 Outstanding Equity Awards at Fiscal Year End

The following table contains information about outstanding equity awards held by our NEOs as of December 31, 2023.

Name	Grant Date	Number of Shares or Units of Stock That Have Not Vested (#)(1)			Market Value of Shares or Units of Stock That Have Not Vested ($)(2)			Equity Incentive Plan Awards:  Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3)			Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
Mark T. Behrman	1/21/2021(4)		245,533		$	2,285,912			—		$	—
	1/20/2022(5)		59,291		$	551,999			—		$	—
	1/20/2022(6)		—		$	—			59,290		$	551,990
	1/25/2023(7)		95,462		$	888,751			—		$	—
	1/25/2023(8)		—		$	—			63,641		$	592,498
Cheryl A. Maguire	1/21/2021(4)		50,810		$	473,041			—		$	—
	1/20/2022(5)		12,270		$	114,234			—		$	—
	1/20/2022(6)		—		$	—			12,269		$	114,224
	1/25/2023(7)		17,261		$	160,700			—		$	—
	1/25/2023(8)		—		$	—			11,507		$	107,130
Michael J. Foster	1/21/2021(4)		53,556		$	498,606			—		$	—
	1/20/2022(5)		12,946		$	120,527			—		$	—
	1/20/2022(6)		—		$	—			12,947		$	120,537
	1/25/2023(7)		17,099		$	159,192			—		$	—
	1/25/2023(8)		—		$	—			11,399		$	106,125
John P. Burns	1/21/2021(4)		36,117		$	336,249			—		$	—
	1/20/2022(5)		8,695		$	80,950			—		$	—
	1/20/2022(6)		—		$	—			8,696		$	80,960
	1/25/2023(7)		11,508		$	107,139			—		$	—
	1/25/2023(8)		—		$	—			7,672		$	71,426
Damien J. Renwick	1/21/2021(4)		22,887		$	213,078			—		$	—
	1/20/2022(5)		7,987		$	74,359			—		$	—
	1/20/2022(6)		—		$	—			7,988		$	74,368
	1/25/2023(7)		11,508		$	107,139			—		$	—
	1/25/2023(8)		—		$	—			7,672		$	71,426

(1) The amounts shown in this column reflect the number of time-based vesting restricted stock units granted under the 2016 LTIP that are not vested as of December 31, 2023. Shares of restricted stock units will vest in substantially equal one-third increments on the first three anniversaries or one-half increments on the first two anniversaries of the grant date, as applicable, and restricted stock units will vest in substantially equal one-third increments on the first three anniversaries of the grant date.

(2) The amounts reported in this column were calculated by multiplying the number of unvested shares of restricted stock units included in this table by the closing price of our common stock on the NYSE on December 29, 2023, the last trading day of 2023, which was $9.31.

(3) The amounts shown in this column reflect the number of performance-based vesting restricted stock units granted under our 2016 LTIP that are not vested as of December 31, 2023. For the shares granted on January 20, 2022 the amounts are based on the number of shares earned in years 2022 and 2023 plus the target number of shares for 2024 based on Company performance against targets for fixed cost per ton of NH3 and the Company’s TSR. For the shares granted on January 25, 2023 the amounts are based on the number of shares earned in 2023 plus the target number of shares for 2024 and 2025 based on the Company's annual TSR ranking relative to companies in a peer group adjusted up or down based on the Company’s three-year period TSR ranking. For further details regarding the performance-based vesting restricted stock unit grants made in 2023, see "Executive Compensation — Compensation Discussion and Analysis – Compensation Framework – Long-Term (Equity) Incentive Plan".

(4) All outstanding awards vested on January 21, 2024.

(5) This row reflects the number of shares of common stock underlying time-based restricted stock units granted on January 20, 2022 under the 2016 LTIP, which are scheduled to vest in equal increments on January 20, 2024 and January 20, 2025.

(6) This row reflects the number of shares of common stock underlying performance-based restricted stock units granted on January 20, 2022 under the 2016 LTIP, which are scheduled to vest on January 20, 2025.

(7) This row reflects the number of shares of common stock underlying time-based restricted stock units granted on January 25, 2023 under the 2016 LTIP, which are scheduled to vest in equal increments on January 25, 2024, January 25, 2025 and January 25, 2026.

(8) This row reflects the number of shares of common stock underlying performance-based restricted stock units granted on January 25, 2023 under the 2016 LTIP, which are scheduled to vest on January 25, 2026.

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Stock Vested During 2023

The following table contains information regarding the vesting of stock awards held by our NEOs during 2023.

	Stock Awards
Name	Number of Shares Acquired on Vesting (#)(1)					Value Realized on Vesting ($)(2)
Mark T. Behrman			275,181				$	3,425,494
Cheryl A. Maguire			56,946				$	708,872
Michael J. Foster			60,032				$	747,287
John P. Burns			81,787				$	1,006,604
Damien J. Renwick			26,883				$	334,523

 

(1) The amounts reported in this column represent the number of shares of restricted stock units that vested during 2023, without reduction for any shares withheld to satisfy applicable tax obligations.

(2) The value equals the Company's closing stock price on the business day immediately before the vesting date multiplied by the number of shares vesting or acquired on vesting.

Equity Compensation Plan Information

The following table shows, as of December 31, 2023, information with respect to our equity compensation plans under which shares of common stock are authorized for issuance.

 

Plan category	Number of securities to be issued upon exercise of outstanding options, restricted stock units, warrants and rights (a)(1)					Weighted average exercise price of outstanding options, restricted stock units, warrants and rights (b)					Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c)
Equity compensation plans approved by stockholders(2)			1,046,803				$	0.32					6,318,499
Equity compensation plans not approved by stockholders			—					—					—
Total			1,046,803				$	0.32					6,318,499

 

As of December 31, 2023, there were options and restricted stock units outstanding to acquire a total of 1,046,803 shares of common stock under our 2008 Stock Incentive Plan and 2016 LTIP (as defined in the "Long Term (Equity) Incentive Plan" section below), which represent 1.4% of the number of common stock outstanding. A total of 408,892 unvested shares of time-based restricted stock units were excluded from this column (a) as those shares are considered issued at the time of grant. The weighted average price in column (b) includes[1]restricted stock units which do not have an exercise price.

 

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Potential Payments Upon Termination or Change in Control

Employment Agreements

As previously discussed, on December 30, 2018, we entered into an employment agreement with each of Ms. Maguire and Messrs. Behrman and Foster, and on December 20, 2019 (effective on February 3, 2020) with Mr. Burns (the "Employment Agreements"). We are not party to an employment agreement with Mr. Renwick.

Severance Payments and Benefits under the Employment Agreements

The Employment Agreements with our NEOs provide for potential severance payments upon the termination of the NEO’s employment in certain situations, including in connection with a "change in control," without "cause" by the Company or for "good reason" by the executive, due to nonrenewal by the Company and upon the death or permanent disability of the executive (as each term is defined in the NEO’s Employment, Agreement as applicable).

Termination for Cause, without Good Reason, or Due to Executive’s Nonrenewal. In the event of the executive’s termination by the Company for "cause" or by the executive without "good reason," the Company has no severance obligation to the executive other than payment of accrued obligations, which are (i) earned but unpaid base salary through the date of termination, (ii) any employee benefits to which the executive has a vested entitlement as of the date of termination, (iii) accrued but unused vacation, (iv) any earned but unpaid annual bonus for a performance year that has ended on or prior to the date of termination; and (v) approved but unreimbursed eligible business expenses. Additionally, pursuant to the terms of the applicable restricted stock unit agreements, all unvested restricted stock units will be forfeited by the executive (including Mr. Renwick) upon termination for cause, without good reason or the executive’s non-renewal.

Death or Permanent Disability. Under the terms of the Employment Agreements, in the event of the NEO’s death or termination on account of becoming permanently disabled, the agreement will terminate and the executive will be entitled to (i) payment of accrued obligations and (ii) payment of a pro-rata portion of his or her annual bonus for the relevant year determined and paid in accordance with the Company’s regular bonus practices. Additionally, pursuant to the terms of the applicable restricted stock unit agreements, a pro-rata portion of the executive’s time-based restricted stock units will vest upon termination of the executive’s service due to death or disability calculated by multiplying the numbers of shares of restricted stock units scheduled to vest on the anniversary of the grant date immediately succeeding the date of termination by a fraction, the numerator of which is the number of days that have elapsed from the last anniversary of the grant date and the denominator of which is 365. For performance-based restricted stock units, the executive will vest in a pro-rata portion of the target number of restricted stock units based on actual performance, as determined in good faith by the Compensation Committee. Any outstanding stock grants to Mr. Renwick will be treated in the same manner as the other NEOs.

Termination without Cause, for Good Reason or Due to Company’s Nonrenewal. Under the terms of the Employment Agreements, if the executive is terminated by the Company without "cause," by the executive for "good reason" or by the Company’s proper notice of nonrenewal of the Employment Agreement, the executive will be entitled to (i) payment of a pro rata portion of his or her annual bonus for the year in which such termination occurs based on the actual achievement of the applicable performance criteria for such year and paid in accordance with the Company's regular bonus practices; (ii) payment of a lump sum cash payment equal to the product of one times (or two times in the case of Mr. Behrman) the sum of his or her then-current base salary and target bonus payable on the first payroll date following the executive’s execution and non-revocation of a general release of claims; and (iii) continued participation in our medical, dental and hospitalization insurance coverage for himself or herself and his or her qualified dependents for a period of 18 months with the employer portion of the continued coverage paid by the Company. Additionally, pursuant to the terms of the applicable restricted stock unit agreements, upon termination of the executive by the Company without cause, by the executive for good reason or by the Company's proper notice of nonrenewal of the Employment Agreement, all shares of time-based restricted stock units will automatically vest. For performance-based restricted stock units, the executive will vest in a pro-rata portion of the performance-based restricted stock units, based on the actual performance determined at the end of the performance period by the Compensation Committee in good faith. Any outstanding stock grants to Mr. Renwick will be treated in the same manner as the other NEOs.

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Change in Control. Under the terms of the Employment Agreements, if the NEO’s employment is terminated by the Company without "cause" or by the executive for "good reason" within 24 months of the change in control or either (a) within 90 days prior to the date a definitive agreement is executed which results in a change in control within 180 days after the date such definitive agreement is executed or (b) on or within 180 days following the date a definitive agreement is executed which results in a change in control within 180 days after the date such definitive agreement is executed, the executive will be entitled to (i) payment of a pro rata portion of his or her annual bonus for the year in which such termination occurs based on the actual achievement of the applicable performance criteria for such year and paid in accordance with the Company's regular bonus practices; (ii) payment of a lump sum cash payment equal to the product of two times (or three times in the case of Mr. Behrman) (three times, or four times in the case of Mr. Behrman, in the event of a termination covered by clauses (a) or (b)) the sum of his or her then-current base salary and target bonus payable on the first payroll date following the executive’s execution and non-revocation of a general release of claims; and (iii) continued participation in our medical, dental and hospitalization insurance coverage for himself or herself and his or her qualified dependents for a period of 18 months, with the employer portion of the continued coverage paid by the Company. Additionally, pursuant to the terms of the applicable restricted stock unit agreements, upon termination resulting from a change in control, if the restricted stock unit award is not assumed or substituted in connection with a change in control, all time-based restricted stock unit will automatically vest in full. For performance-based restricted stock units, if a change in control occurs prior to the end of the performance period, the portion of the target number that is earned will be determined by the Compensation Committee immediately prior to the change in control and will equal the greater of (x) the target number of restricted stock units or (y) the portion of the target number that is earned based on the actual performance as determined by the Compensation Committee. Any outstanding stock grants to Mr. Renwick will be treated in the same manner as the other NEOs.

Table of Severance Benefits

The following table summarizes the dollar amounts of potential payments to each NEO upon a qualifying termination of employment or change in control pursuant to the terms of our equity incentive plans and the Employment Agreements, as applicable, assuming that the events described in the table occurred on December 31, 2023, and using the closing price of the Company’s common stock on December 29, 2023, the last business day of 2023, of $9.31. The values below are our best estimates of the severance payments and benefits the NEOs would receive upon a termination of employment or a change in control as of December 31, 2023 and we believe the amounts are calculated using reasonable assumptions. All amounts are before taxes, which would reduce amounts ultimately received by our NEOs. The table is only intended to summarize various terms of the Employment Agreements and equity award documents and is qualified in its entirety by reference to the full text of the actual agreements, copies of which are on file with the SEC.

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Executive Officer	Termination For Cause $			Termination Without Cause or For Good Reason $					Termination During Change in Control Period $					Change in Control Without Termination(1) $					Death $					Disability $
Mark T. Behrman
STI Plan Payments(2)	$	603,000			$	603,000				$	603,000				$	603,000				$	603,000				$	603,000
Cash Severance		—			$	3,045,000		(3)		$	4,567,500		(4)		$	—				$	—				$	—
Equity Awards
Unvested and Accelerated		—			$	4,871,150		(5)		$	4,871,150		(5)		$	4,871,150		(5)		$	3,501,789		(7)		$	3,501,789		(7)
Health Coverage(6)		—			$	22,918				$	22,918				$	—				$	—				$	—
Total	$	603,000			$	8,542,068				$	10,064,568				$	5,474,150				$	4,104,789				$	4,104,789
Cheryl A. Maguire
STI Plan Payments(2)	$	241,000			$	241,000				$	241,000				$	241,000				$	241,000				$	241,000
Cash Severance		—			$	743,750		(3)		$	1,487,500		(4)		$	—				$	—				$	—
Equity Awards
Unvested and Accelerated		—			$	969,329		(5)		$	969,329		(5)		$	969,329		(5)		$	703,007		(7)		$	703,007		(7)
Health Coverage(6)		—			$	22,918				$	22,918				$	—				$	—				$	—
Total	$	241,000			$	1,976,997				$	2,720,747				$	1,210,329				$	944,007				$	944,007
Michael J. Foster
STI Plan Payments(2)	$	223,000			$	223,000				$	223,000				$	223,000				$	223,000				$	223,000
Cash Severance		—			$	717,400		(3)		$	1,434,800		(4)		$	—				$	—				$	—
Equity Awards
Unvested and Accelerated		—			$	1,004,987		(5)		$	1,004,987		(5)		$	1,004,987		(5)		$	731,654		(7)		$	731,654		(7)
Health Coverage(6)		—			$	22,918				$	22,918				$	—				$	—				$	—
Total	$	223,000			$	1,968,305				$	2,685,705				$	1,227,987				$	954,654				$	954,654
John P. Burns
STI Plan Payments(2)	$	184,000			$	184,000				$	184,000				$	184,000				$	184,000				$	184,000
Cash Severance		—			$	644,300		(3)		$	1,288,600		(4)		$	—				$	—				$	—
Equity Awards
Unvested and Accelerated		—			$	676,724		(5)		$	676,724		(5)		$	676,724		(5)		$	492,890		(7)		$	492,890		(7)
Health Coverage(6)		—			$	22,918				$	22,918				$	—				$	—				$	—
Total	$	184,000			$	1,527,942				$	2,172,242				$	860,724				$	676,890				$	676,890
Damien J. Renwick
STI Plan Payments		—			$	—				$	—				$	—				$	—				$	—
Cash Severance		—			$	—				$	—				$	—				$	—				$	—
Equity Awards
Unvested and Accelerated		—			$	540,370		(5)		$	540,370		(5)		$	540,370		(5)		$	370,585		(7)		$	370,585		(7)
Health Coverage(6)		—			$	—				$	—				$	—				$	—				$	—
Total		—			$	540,370				$	540,370				$	540,370				$	370,585				$	370,585

(1) The amounts shown in this column represent the value attributable to accelerated vesting of equity awards upon a change in control under the terms of our equity incentive plans and employment agreements, which would be realized by the NEOs regardless of whether they incurred a termination of employment in connection with such change in control.

(2) This amount represents the actual STI Plan payments made to the NEO earned in 2023. Under their employment agreements, upon a termination of employment, the NEOs are entitled to any earned by unpaid bonuses for a performance year prior to the year of termination.

(3) This amount represents one times (two times for Mr. Behrman) the sum of base salary and target bonus.

(4) This amount represents two times (three times for Mr. Behrman) the sum of base salary and target bonus.

(5) This amount represents the value of the restricted stock units that would have vested if the qualifying event occurred on December 31, 2023, valued at $9.31 per share, the closing price of our stock on the NYSE on December 29, 2023.

(6) The amounts included for health coverage are the estimated cost to us for providing continuing health care under our existing medical, dental and vision benefits to each eligible executive for the applicable time period specified in the NEO’s Employment Agreement.

(7) Represents the value on December 31, 2023 of the pro-rata vesting of outstanding equity awards upon the death or disability of the executive valued at $9.31 per share, the closing price of our stock on the NYSE on December 29, 2023.

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CEO Pay Ratio

Our CEO to median employee pay ratio is calculated pursuant to Item 402(u) of Regulation S-K. We identified the median employee by examining the income set out on form W-2 for all individuals, including our CEO, who were employed by the Company on December 31, 2023. We included all employees in the calculation (other than our CEO), whether employed on a full-time, part-time or seasonal basis, as of the end of the year. We believe the use of W-2 income for all employees is a consistently applied compensation measure.

Mr. Behrman’s 2023 total annual compensation was $4,487,833 as reflected in the Summary Compensation Table included in this Proxy Statement. Our median employee’s total annual compensation for 2023, determined in the same manner as the compensation reported for the NEOs in the Summary Compensation Table, was $98,928. As a result, the ratio of Mr. Behrman’s total compensation to that of our median employee was 45 to 1.

This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

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As noted above, the Compensation Committee believes in a comprehensive evaluation of the NEOs’ and the Company’s performance, and uses a mix of performance measures under our annual STI Plan and our 2016 LTIP to align executive pay with Company performance.

We believe the table above generally shows the alignment between compensation actually paid to our PEO and our non-PEO NEOs and the Company’s performance, consistent with our compensation philosophy. Specifically, a large portion of our NEOs’ compensation is reliant on the Company’s financial performance and, as such, the PEO "compensation actually paid" and non-PEO NEO average "compensation actually paid" each year was aligned with our financial performance and our TSR performance.

Description of Relationship Between NEO Compensation and Total Shareholder Return.

As reflected in the table above, our Total Shareholder Return ("TSR") increased from the beginning of fiscal year 2021 to the end of fiscal year 2022 and then decreased to the end of fiscal year 2023. During the same period, "compensation actually paid" to our PEO (Mr. Behrman), and average "compensation actually paid" to our non-PEO NEOs, decreased. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs (Ms. Maguire, and Messrs. Foster, Burns and Renwick for 2022 and 2023 and Ms. Maguire and Ms. Carver and Messrs. Foster, Burns and Renwick for 2021) was higher in 2021 than in 2022 and 2023. This is primarily due to the impact of the significantly lower share price under the 2016 LTIP grant date in 2021 as compared with the "Fair value of equity compensation granted in current year – value at end of year-end" for 2022 and 2023. The increase in share price from the grant date to the end of the year resulted, in large part, from the Exchange Transaction the Company successfully completed in 2021. The Compensation Committee considers the Company’s stock performance as one of several factors to be considered in setting the compensation of our PEO and our non-PEO NEOs. Because a significant portion of the PEO’s and non-PEO NEOs’ compensation is stock-based, the Compensation Committee anticipates that the "compensation actually paid" to such officers will vary with changes in the price of our common stock.

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Description of Relationship Between NEO Compensation and Net Income.

As reflected in the table above, Net Income for the Company increased from the beginning of fiscal year 2021 to the end of fiscal year 2022 and decreased over fiscal year 2023. During the same period, "compensation actually paid" to our PEO (Mr. Behrman), and average "compensation actually paid" to our Non-PEO NEOs (Ms. Maguire, and Messrs. Foster, Burns and Renwick for 2022 and Ms. Maguire and Ms. Carver and Messrs. Foster, Burns and Renwick for 2021), decreased. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs was higher in 2021 than in 2022 primarily due to the Exchange Transaction the Company successfully completed in 2021, which increased the Company’s share price during 2021 resulting in an increase in the fair value of awards, both granted in 2021 and in prior years. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs was lower in 2023 than in 2022, primarily due to the impact of our share price decline in 2023, which resulted in lower fair values of outstanding awards at year end 2023, and due to certain performance-based grants no longer being considered probable of vesting.

 

 

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Description of Relationship Between NEO Compensation and Adjusted EBITDA.

As reflected in the table above, Adjusted EBITDA for the Company increased from the beginning of fiscal year 2021 to the end of fiscal year 2022 and decreased over fiscal year 2023. During the same period, "compensation actually paid" to our PEO (Mr. Behrman), and average "compensation actually paid" to our Non-PEO NEOs (Ms. Maguire, and Messrs. Foster, Burns and Renwick for 2022 and 2023 and Ms. Maguire and Ms. Carver and Messrs. Foster, Burns and Renwick for 2021), decreased. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs was higher in 2021 than in 2022 primarily due to the Exchange Transaction the Company successfully completed in 2021, which increased the Company’s share price during 2021 resulting in an increase in the fair value of awards, both granted in 2021 and in prior years. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs was lower in 2023 than in 2022, primarily due to the impact of our share price decline in 2023, which resulted in lower fair values of outstanding awards at year end 2023, and due to certain performance-based grants no longer being considered probable of vesting.

 

 

 

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Description of Relationship Between NEO Compensation and Total Shareholder Return.

As reflected in the table above, our Total Shareholder Return ("TSR") increased from the beginning of fiscal year 2021 to the end of fiscal year 2022 and then decreased to the end of fiscal year 2023. During the same period, "compensation actually paid" to our PEO (Mr. Behrman), and average "compensation actually paid" to our non-PEO NEOs, decreased. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs (Ms. Maguire, and Messrs. Foster, Burns and Renwick for 2022 and 2023 and Ms. Maguire and Ms. Carver and Messrs. Foster, Burns and Renwick for 2021) was higher in 2021 than in 2022 primarily due to the Exchange Transaction the Company successfully completed in 2021, which increased the Company’s share price during 2021 resulting in an increase in the fair value of awards, both granted in 2021 and in prior years. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs was lower in 2023 than in 2022, primarily due to the impact of our share price decline in 2023, which resulted in lower fair values of outstanding awards at year end 2023, and due certain performance-based grants no longer being considered probable of vesting. The Compensation Committee considers the Company’s stock performance as one of several factors to be considered in setting the compensation of our PEO and our non-PEO NEOs. Because a significant portion of the PEO’s and non-PEO NEOs’ compensation is stock-based, the Compensation Committee anticipates that the "compensation actually paid" to such officers will vary with changes in the price of our common stock.

Most Important Financial Performance Measures

Our Compensation Committee selects performance metrics for our short-term and long-term incentive plans that align NEO interests with those of our shareholders. See "Executive Compensation — Compensation Discussion and Analysis — Compensation Framework" for the definition of these metrics and further explanation of how our compensation metrics in our short-term and long-term incentive plans tie to our business strategy.

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Director Stock Ownership Guidelines

On April 26, 2017, the Board unanimously adopted the LSB Industries, Inc. stock ownership guidelines. The stock ownership guidelines require each non-employee director (other than Mr. Bobb and Ms. Kitamura) to own shares of our common stock having an aggregate value of at least $310,000 (two times the non-employee director retainer) by the later of (i) five years following the effective date of the guidelines (April 26, 2022) or (ii) the fifth anniversary of a director’s election to the Board. The value of the director’s holdings is calculated using the higher of the actual cost of a director’s holdings when purchased or the market value of the holdings.

As of December 31, 2023, each of Messrs. Golsen, Roedel, Sanders, White and Ms. Peninger are in compliance with the stock ownership guidelines and exceeds the minimum stock ownership level under the director stock ownership guidelines. Mr. Packebush has until May 2025 to meet the director stock ownership guidelines.

 

 

Director Compensation

2023 Director Compensation Table

The following table sets forth the compensation earned by our non-employee directors who served on the Board during 2023.

Name(1)		Fees Earned or Paid in Cash(2)						Stock  Awards(2)(3)						All Other Compensation						Total
Jonathan S. Bobb			$	192,500					$	—					$	—					$	192,500
Barry H. Golsen			$	190,000					$	—					$	—					$	190,000
Kanna Kitamura			$	187,500					$	—					$	—					$	187,500
Steven L. Packebush			$	85,000					$	105,001					$	—					$	190,001
Diana M. Peninger			$	87,500					$	105,001					$	—					$	192,501
Richard W. Roedel(4)			$	152,500					$	105,001					$	—					$	257,501
Richard S. Sanders			$	85,000					$	105,001					$	—					$	190,001
Lynn F. White			$	95,000					$	105,001					$	—					$	200,001

 

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Our Non-Employee Director Compensation and Stock Ownership Policy (as amended and restated, the "Director Policy") provides for:

Cash fees earned under the Director Policy are earned on a calendar-quarter basis and are paid in arrears not later than the 15th day following the end of each calendar quarter. Such cash fees are pro-rated to reflect the period of year during which the director was not a member of the Board. Additionally, under the Director Policy, restricted stock units are granted on the first business day following our Annual Meeting of stockholders each year. The number of restricted stock units will be determined by dividing $105,000 by the closing price of our common stock on the first business day following our Annual Meeting of stockholders.

 

Certain of our Directors are eligible to participate in the Nonqualified Deferred Compensation Plan for Non-Employee Directors. Under the Plan, participants make an election to defer settlement of some or all of the restricted stock units granted or cash compensation earned to a future date. The election must be made before the end of the preceding year that the restricted stock units are granted or cash compensation is earned. Participants choose the amounts to defer and the future settlement date(s) or event(s). Settlement dates can be fixed or contingent on a change in control or separation of service. We established an equity instrument in the form of a Deferred Stock Unit ("DSU") which is a restricted stock unit that settles on a specified deferred payment date as opposed to on the vesting date. Restricted stock units which are elected to be deferred will be classified as DSUs on the grant date. Any cash compensation during the calendar year elected to be deferred will be accrued and accumulated until December 15 of a given year upon which the cash obligation will be exchanged for DSUs, the number of which will be determined by dividing the accrued compensation amount with the market price of LSB’s common stock on December 15. This will result in DSUs with a vesting period (for restricted stock units grants) and DSUs which are already vested at the time of the grant (for cash fees).

Securities Ownership

Security Ownership of 5% Owners

The following table sets forth the beneficial ownership of our common stock as of April 1, 2024, held by beneficial owners of 5% or more of each class of our common stock and voting preferred stock.

The amounts and percentage of units beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is

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deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to vote or to direct the voting of such security, or "investment power," which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days of April 1, 2024. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all stock shown as beneficially owned by them, subject to community property laws where applicable.

 

Name and Address of Beneficial Owner		Title of Class				Amounts of Shares Beneficially Owned(1)							Percent of Class+
TLB-LSB LLC			Common					15,306,927		(2)				21.2%
Blackrock			Common					5,605,145		(3)				7.8%

 

+ Because of the requirements of the SEC as to the method of determining the amount of shares an individual or entity may own beneficially, the amount shown for an individual may include shares also considered beneficially owned by others. Any shares of stock which a person does not own, but which he or she has the right to acquire within 60 days of April 1, 2024, are deemed to be outstanding for the purpose of computing the percentage of outstanding stock of the class owned by such person but are not deemed to be outstanding for the purpose of computing the percentage of the class owned by any other person.

Security Ownership of Certain Beneficial Owners

The following table sets forth the beneficial ownership of each class of our common stock as of April 1, 2024, held by (1) directors and director nominees; (2) each NEO listed in this Proxy Statement; and (3) all current directors and NEOs as a group.

The amounts and percentage of units beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to vote or to direct the voting of such security, or "investment power," which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days of April 1, 2024. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all stock shown as beneficially owned by them, subject to community property laws where applicable.

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Name of Beneficial Owner		Title of Class				Amount of Shares Beneficially Owned(1)						Percent of Class+
Mark T. Behrman			Common					1,370,635		(2)			1.9%
John P. Burns			Common					120,416		(3)			*
Michael J. Foster			Common					367,339		(4)			*
Cheryl A. Maguire			Common					226,749		(5)			*
Jonathan S. Bobb			Common					12,611		(6)			*
Barry H. Golsen			Common					676,388		(7)			*
Kanna Kitamura			Common					—					*
Steven L. Packebush			Common					33,050		(8)			*
Diana M. Peninger			Common					37,228		(9)			*
Damien J. Renwick			Common					50,293		(10)			*
Richard W. Roedel			Common					98,287		(11)			*
Richard S. Sanders, Jr.			Common					176,907		(12)			*
Lynn F. White			Common					205,653		(13)			*
Directors and Executive Officers as a group (14 persons)			Common					3,428,497					4.7%
5% Holders
TLB-LSB LLC			Common					15,306,927		(14)			21.2%
Blackrock			Common					5,605,145		(15)			7.8%

 

* Less than 1%.

+ See footnote "+" to the table under "Security Ownership of Certain 5% Owners."

 

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Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, officers, and beneficial owners of more than 10% of the Company’s common stock to file with the SEC reports of holdings and changes in beneficial ownership of the Company’s stock. Based solely on a review of copies of the Forms 3, 4 and 5 furnished to us with respect to 2023, or written representations that no Form 5 was required to be filed, we believe that during 2023 all our directors and officers and beneficial owners of more than 10% of the Company’s common stock timely filed their required Forms 3, 4, or 5.

Stockholder Proposals

If you wish to submit proposals to be included in our proxy statement for our 2025 Annual Meeting, proposals must be received at our principal executive offices in writing not later than December 13, 2024. If the date of the 2025 Annual Meeting is changed by more than 30 days from the date of the 2024 Annual Meeting, the deadline for submitting proposals is a reasonable time before we begin to print and mail the proxy materials for our 2025 Annual Meeting. Proposals must satisfy the requirements set forth in Rule 14a-8 under the Exchange Act and as set out in the Bylaws. Proposals should be addressed to our Corporate Secretary, LSB Industries, Inc., 3503 NW 63rd Street, Suite 500, Oklahoma City, Oklahoma 73116.

Other than matters properly brought under Rule 14a-8, the deadline for providing us with timely notice of matters that you otherwise desire to introduce at our next Annual Meeting of stockholders, other than those that will be included in our proxy materials, is not later than December 13, 2024, but not before November 12, 2024; provided that if the date of the Annual Meeting is more than 30 days before or more than 60 days after May 23, 2025, the notice must be received not later than the 90th day prior to such Annual Meeting, or if later, the 10th day following the date on which the public disclosure of the date of such Annual Meeting was made. The written notice must set forth the information specified in the Bylaws.

If you wish to present a proposal, but you fail to notify us by such deadline, you will not be entitled to present the proposal at the Annual Meeting.

Only persons who are nominated in accordance with the procedures set forth in our Bylaws are eligible for election as directors. Nominations of persons for election to the Board may be made at a meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board; or (ii) by any stockholder of the Company entitled to vote for the election of directors at the Annual Meeting who complies with the notice procedures set forth in our Bylaws. A director nomination made by a stockholder must be delivered or mailed to and received at our principal executive offices not less than 120 days nor more than 150 days prior to the anniversary date of the 2024 Annual Meeting; provided, however, if the date of the Annual Meeting is more than 30 days before or more than 60 days after such date, notice by the stockholder to be timely must be so delivered, or mailed and received not later than the 90th day prior to such Annual Meeting, or if later, the 10th day following the date on which the public disclosure of the date of such Annual Meeting was so made. Pursuant to our Bylaws, the deadline for submitting nominations for directors for our Annual Meeting in 2025 is January 23, 2025, but no nominations may be submitted before December 24, 2024.

The Bylaws also provide that a stockholder satisfying the above notice requirements may nominate an independent director for inclusion in our proxy statement, if the additional specified conditions set forth in our Bylaws, are satisfied.

 

 

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Available Information

We file or furnish annual, quarterly and current reports and other documents with the SEC under the Exchange Act. The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0030. Also, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC. The public can obtain any documents we file with the SEC at www.sec.gov.

We also make available free of charge through our Internet website (www.lsbindustries.com) our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. In addition to the reports filed or furnished with the SEC, we publicly disclose material information from time to time in press releases, at Annual Meetings of stockholders, in publicly accessible conferences and investor presentations, and through our website.

A copy of the Company’s 2023 Annual Report accompanies this Proxy Statement, which Annual Report includes the Company’s 2023 Form 10-K. Copies of exhibits to the Form 10‑K are available upon request, but a reasonable copy fee per page will be charged to the requesting stockholder.

One copy of the Notice of Annual Meeting of Stockholders, this Proxy Statement and the Company’s 2023 Annual Report will be sent to stockholders who share an address, unless they have notified the Company that they want to continue receiving multiple packages. This practice, known as "householding," is designed to reduce duplicate mailings and save significant printing and postage costs. If you received a householding mailing this year and you would like to have additional copies of this Proxy Statement and the Company’s 2023 Annual Report mailed to you or you would like to opt out of this practice for future mailings, the Company will promptly deliver such additional copies to you if you submit your request in writing to the address below. You may also contact the Company in the same manner if you received multiple copies of the materials and would prefer to receive a single copy in the future.

Requests for documents relating to the Company should be directed to:

Director—Communications Department

c/o LSB Industries, Inc.

3505 NW 63rd Street, Suite 500

Oklahoma City, Oklahoma 73116

(405) 235-4546

Whether or not you plan to attend the Annual Meeting, you are urged to complete, date and sign the enclosed proxy card and return it in the accompanying envelope or follow the instructions provided for voting by phone or via the Internet, if applicable. Prompt response will greatly facilitate arrangements for the Annual Meeting, and your cooperation is appreciated. Stockholders who attend the Annual Meeting may vote their shares personally even though they have sent in their proxy card or voted by phone or the Internet.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 23, 2024

The Company’s Notice of Annual Meeting of Stockholders, Proxy Statement for the 2024 Annual Meeting of Stockholders and Annual Report for the year ended December 31, 2023 are available online at www.proxydocs.com/LXU.

	By order of the Board of Directors,
	Michael J. Foster
Oklahoma City, Oklahoma	Executive Vice President,
April 12,2024	Secretary and General Counsel

 

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