FORM 10-K/A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Amendment No. 1
to
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended: December 31, 1996
or
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to __________
Commission File Number: 1-7677
LSB INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 73-1015226
- ------------------------- -------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
16 South Pennsylvania Avenue
Oklahoma City, Oklahoma 73107
- --------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code:
(405) 235-4546
--------------
Securities Registered Pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class On Which Registered
- -------------------------------- -----------------------
Common Stock, Par Value $.10 New York Stock Exchange
$3.25 Convertible Exchangeable
Class C Preferred Stock, Series 2 New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
None
(Facing Sheet Continued)
Indicate by check mark whether the Registrant (1) has filed
all reports required by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for the
shorter period that the Registrant has had to file the reports),
and (2) has been subject to the filing requirements for the past
90 days. YES X NO .
----- -----
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
As of February 28, 1997, the aggregate market value of the
8,830,654 shares of voting stock of the Registrant held by
non-affiliates of the Company equaled approximately $44,153,270
based on the closing sales price for the Company's common stock
as reported for that date on the New York Stock Exchange. That
amount does not include (1) the 1,539 shares of Convertible Non-
Cumulative Preferred Stock (the "Non-Cumulative Preferred Stock")
held by non-affiliates of the Company, (2) the 20,000 shares of
Series B 12% Convertible, Cumulative Preferred Stock (the "Series
B Preferred Stock"), and (3) the 915,000 shares of $3.25
Convertible Exchangeable Class C Preferred Stock, Series 2,
excluding 5,000 shares held in treasury (the "Series 2 Preferred
Stock"). An active trading market does not exist for the shares
of Non-Cumulative Preferred Stock or the Series B Preferred
Stock. The shares of Series 2 Preferred Stock do not have voting
rights except under limited circumstances.
As of February 28, 1997, the Registrant had 12,949,356
shares of common stock outstanding (excluding 1,939,120 shares of
common stock held as treasury stock).
PART III
Item 10. Directors and Executive Officers of the Company.
- ----------------------------------------------------------
DIRECTORS. The Certificate of Incorporation and By-laws of
the Company provide for the division of the Board of Directors
into three (3) classes, each class consisting as nearly as
possible of one-third of the whole. The term of office of one
class of directors expires each year, with each class of
directors elected for a term of three (3) years and until the
shareholders elect their qualified successors. Barry H. Golsen,
David R. Goss, and Jerome D. Shaffer, are presently serving as
directors of the Company in the class whose term is expiring as
of the Annual Meeting.
The Company's By-laws provide that the Board of Directors,
by resolution from time to time, may fix the number of directors
that shall constitute the whole Board of Directors. The By-laws
presently provide that the number of directors may consist of not
less than three (3) nor more than nine (9). The Board of
Directors currently has set the number of directors at nine (9).
The By-laws of the Company further provide that only persons
nominated by or at the direction of: (i) the Board of Directors
of the Company, or (ii) any stockholder of the Company entitled
to vote for the election of the directors that complies with
certain notice procedures, shall be eligible for election as a
director of the Company. Any stockholder desiring to nominate
any person as a director of the Company must give written notice
to the Secretary of the Company at the Company's principal
executive office not less than fifty (50) days prior to the date
of the meeting of stockholders to elect directors; except, if
less than sixty (60) days' notice or prior disclosure of the date
of such meeting is given to the stockholders, then written notice
by the stockholder must be received by the Secretary of the
Company not later than the close of business on the tenth (10th)
day following the day on which such notice of the date of the
meeting was mailed or such public disclosure was made. In
addition, if the stockholder proposes to nominate any person, the
stockholder's written notice to the Company must provide all
information relating to such person that the stockholder desires
to nominate that is required to be disclosed in solicitation of
proxies pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended.
The following table sets forth the name, principal
occupation, age, year in which the individual first became a
director, and year in which the director's term will expire for
each nominee for election as a director at the Annual Meeting and
all other directors whose term will continue after the Annual
Meeting.
Name and First Became
Principal Occupation A Director Term Expires Age
- ------------------------- ------------ ------------ ---
Barry H. Golsen (1) 1981 1997 46
Vice Chairman of the
Board of Directors of
the Company and President
of the Environmental Control
Business of the Company
David R. Goss (2) 1971 1997 56
Senior Vice President of
Operations of the Company
Jerome D. Shaffer, M.D. (3) 1969 1997 80
Investments
Robert C. Brown, M.D. (4) 1969 1998 66
President of Northwest
Internal Medicine
Associates, Inc.
Jack E. Golsen (5) 1969 1998 68
President, Chief Executive
Officer and Chairman of
the Board of Directors of
the Company
Horace G. Rhodes (6) 1996 1998 69
President/Managing Partner,
Kerr, Irvine, Rhodes
and Ables
Raymond B. Ackerman (7) 1993 1999 74
Chairman Emeritus of Ackerman
McQueen, Inc.
Bernard G. Ille (8) 1971 1999 70
Investments
Tony M. Shelby (9) 1971 1999 55
Senior Vice President of
Finance and Chief
Financial Officer of the
Company
- -----------------
(1) Mr. Barry H. Golsen, LLB, was elected as Vice Chairman of
the Board of Directors of the Company on August 18, 1994.
For more than five (5) years Mr. Golsen has served as a
director and the President of the Company's Environmental
Control Business.
(2) Mr. Goss, a certified public accountant, has served in
substantially the same capacity for the past five (5) years.
(3) Dr. Shaffer retired from the practice of medicine in 1987.
Prior to that time, Dr. Shaffer practiced medicine in
Oklahoma City, Oklahoma, for more than five (5) years.
(4) Dr. Brown has practiced medicine in Oklahoma City, Oklahoma,
for more than five (5) years.
(5) Mr. Jack E. Golsen, founder of the Company, has served in
the same capacity for more than five (5) years.
(6) Mr. Rhodes has practiced law in Oklahoma City for a period
in excess of five (5) years and is the managing partner in
the law firm of Kerr, Irvine, Rhodes & Ables. Since 1972,
Mr. Rhodes has served as Executive Vice President & General
Counsel for the Association of Oklahoma Life Insurance
Companies and since 1982 has served as Executive Vice
President & General Counsel for the Oklahoma Life and Health
Insurance Guaranty Association.
(7) Mr. Ackerman retired in 1992 from Ackerman McQueen, Inc.
From 1972 until his retirement, Mr. Ackerman served as
Chairman of the Board and President of Ackerman McQueen,
Inc., a public relations and advertising firm, located in
Oklahoma.
(8) Mr. Ille served as President and Chief Executive Officer of
First Life Assurance Company ("First Life") from May 1988,
through March 31, 1994, when he retired from First Life and
from that position. In 1991, First Life was placed in
conservatorship by the Oklahoma Department of Insurance and
was sold on March 31, 1994. For more than five (5) years
prior to that time, Mr. Ille also served as President of
United Founders Life Insurance Company. Mr. Ille also
serves as a director of Landmark Land Company Inc.
("Landmark"). First Life was a subsidiary of Landmark until
First Life was placed in conservatorship.
(9) Mr. Shelby, a certified public accountant, has served in
substantially the same capacity for more than five (5)
years.
FAMILY RELATIONSHIPS. Jack E. Golsen is the father of Barry
H. Golsen and the brother-in-law of Robert C. Brown, M.D. Robert
C. Brown, M.D. is the uncle of Barry H. Golsen.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Based solely on a review of copies of the Forms 3, 4 and 5 and
amendments thereto furnished to the Company with respect to 1996,
or written representations that no such reports were required to
be filed with the Securities and Exchange Commission, the Company
believes that during 1996 all directors and officers of the
Company and beneficial owners of more than ten percent (10%) of
any class of equity securities of the Company registered pursuant
to Section 12 of the Exchange Act filed their required Forms 3,
4, or 5, as required by Section 16(a) of the Securities Exchange
Act of 1934, as amended, on a timely basis, except that Tony
Shelby filed one late Form 4 to report one transaction.
ITEM 11. EXECUTIVE COMPENSATION.
The following table shows the aggregate cash compensation
which the Company and its subsidiaries paid or accrued to the
Chief Executive Officer and each of the other four (4) most
highly-paid executive officers of the Company (which includes the
President of the Company's Environmental Control Business, who
also serves as Vice Chairman of the Board of Directors of the
Company and who performs key policy making functions for the
Company). The table includes cash distributed for services
rendered during 1996, plus any cash distributed during 1996 for
services rendered in a prior year, less any amount relating to
those services previously included in the cash compensation table
for a prior year.
Summary Compensation Table
Long-term
Compen-
sation
Annual Compensation Awards
------------------------
Other All
Annual Securities Other
Compen- Underlying Compen-
Name and Salary Bonus sation Stock sation
Position Year ($) ($)(1) ($)(2) Options ($)(3)
- -------------- ---- ------ ------ ------ ------- ------
Jack E. Golsen 1996 469,125 - - 100,000 -
Chairman of the 1995 457,892 100,000 - - -
Board, President 1994 429,423 150,000 - 165,000(4) 100,000
and Chief
Executive Officer
Barry H. Golsen 1996 209,125 - - 105,000 -
Vice Chairman of 1995 187,885 60,000 - - -
the Board of 1994 176,769 90,000 - - 100,000
Directors and
President of the
Environmental
Control Business
David R. Goss 1996 173,300 - - 85,000 -
Senior Vice 1995 153,022 60,000 - - -
President - 1994 146,708 90,000 - - 100,000
Operations
Tony M. Shelby 1996 173,425 - - 85,000 -
Senior Vice 1995 152,923 60,000 - - -
President/Chief 1994 146,708 90,000 - - 100,000
Financial Officer
David M. Shear 1996 151,300 - - 64,000 -
Vice President/ 1995 137,923 40,000 - - -
General Counsel 1994 128,827 40,000 - - -
(1) Bonuses noted are for services rendered for the prior
fiscal year. Bonuses, if any, have not been declared or paid for
1996 performance as of the date of this report on Form 10-K.
(2) Does not include perquisites and other personal
benefits, securities or property for the named executive officer
in any year if the aggregate amount of such compensation for such
year does not exceed the lesser of either $50,000 or 10% of the
total of annual salary and bonus reported for the named executive
officer for such year.
(3) In 1994, the Company paid to Messrs. J. Golsen, B.
Golsen, Goss, and Shelby an additional bonus of $100,000 each for
their services as members of the Board of Directors of Equity
Bank for Savings, F.A., during the six years that the Company
owned that financial business, which was sold by the Company in
1994.
(4) On June 1, 1989, the Company originally granted a
nonqualified stock option to J. Golsen to purchase 165,000 shares
of the Company's Common Stock at an exercise price of $2.625 per
share (the "NQSO"), which on the date of grant was the fair
market value of the Company's Common Stock. Prior to the NQSO's
expiration date of June 1, 1994, the Company granted an extension
of the option period of the NQSO for an additional five (5) year
period, beginning on June 1, 1994, and terminating on June 1,
1999 (the "Extended NQSO"). The Extended NQSO vests and becomes
exercisable at twenty percent (20%) per year on June 1, 1995,
1996, and 1997, and the remaining forty percent (40%) becomes
exercisable June 1, 1998. The exercise price of the Extended
NQSO is $2.625 per share, the same as the original NQSO. The
Extended NQSO shall become immediately exercisable in full upon
the death of the optionee or a change in control of the Company,
and the Board of Directors of the Company may, at its option,
accelerate such vesting at any time.
Option Grants in 1996. The following table sets forth information relating
to individual grants of stock options made to each of the named executive
officers in the above Summary Compensation Table during the last fiscal year:
Individual Grants
Number of Potential Realizable Value
Shares of % of at Assumed Annual Rates
Common Stock Total of Stock Price
underlying Options Appreciation
Options Granted Exercise for Option Term (2)
Granted Employees Price Expiration -----------------
Name: (#)(1) in 1996 ($/sh) Date 5%($) 10%($)
- --------------- ------- ------- ------ -------- ------ --------
Jack E. Golsen 100,000 13.9 $4.538 11/19/01 72,550 $210,325
Barry H. Golsen 100,000 13.9 4.538 11/19/01 72,550 210,325
5,000 .7 5.362 6/27/01 4,293 12,434
David R. Goss 80,000 11.1 4.125 11/19/06 207,900 524,700
5,000 .7 4.875 6/27/06 15,356 38,756
Tony M. Shelby 80,000 11.1 4.125 11/19/06 207,900 524,700
5,000 .7 4.875 6/27/06 15,356 38,756
David M. Shear 60,000 8.3 4.125 11/19/06 155,925 393,525
4,000 .6 4.875 6/27/06 12,285 31,005
(1) The Company has adopted a 1981 Incentive Stock Option Plan
(the 1981 Plan ), a 1986 Incentive Stock Option Plan (the
1986 Plan ), and a 1993 Incentive Stock Option Plan (the
1993 Plan ). The 1981 Plan, 1986 Plan, and the 1993 Plan
are collectively designated as the Plans . The Plans
provide that the Company may grant options under the Plans
to key salaried employees of the Company. The option price
for all options granted under the Plans cannot equal less
than 100% (or 110% for persons possessing more than 10% of
the voting stock of the Company) of the market value of the
Company s Common Stock on the date of the grant. The
Company could grant options under the 1981 Plan until
November 30, 1991, until April 10, 1996 under the 1986 Plan,
and can grant options until August 5, 2003 under the 1993
Plan. The holder of an option granted under the Plans may
not exercise the option after ten (10) years from the date
of grant of the option (or five (5) years for persons
possessing more than 10% of the voting stock of the
Company). The options become exercisable approximately 20%
after one year from the date of grant, an additional 20%
after two years, an additional 30% after three years, and
the remaining 30% after four years.
(2) The potential realizable value of each grant of options
assumes that the market price of the Company s Common Stock
appreciates in value from the date of grant to the end of
the option term at the annualized rates shown above each
column. The actual value that an executive may realize, if
any, will depend on the amount by which the market price of
the Company s Common Stock at the time of exercise exceeds
the exercise price of the option. As of April 17, 1997, the
closing price of a share of the Company s Common Stock as
quoted on the New York Stock Exchange was $4.50. There is
no assurance that any executive will receive the amounts
estimated in this table.
AGGREGATED OPTION EXERCISES IN 1996 AND
FISCAL YEAR END OPTION VALUES.
The following table sets forth information concerning each
exercise of stock options by each of the named executive officers
during the last fiscal year and the year-end value of unexercised
options:
Number of Value
Securities of Unexercised
Underlying In-the-Money
Unexercised Options at
Options at FY End
FY End (#)(3) ($) (3) (4)
------------- ---------------
Shares
Acquired Value
on Exercise Realized Exercisable/ Exercisable/
Name (#)(1) ($) (2) Unexercisable Unexercisable
Jack E. Golsen - - 106,000/ 166,230/
199,000 (5) 185,625
Barry H. Golsen - - 8,000/ 8,496/
105,000 -
David R. Goss - - 11,000/ 20,375/
85,000 30,000
Tony M. Shelby - - 11,000/ 20,375/
85,000 30,000
David M. Shear - - 23,000/ 36,875/
64,000 22,500
(1) Each number represents the number of shares received by
the named individual upon exercise.
(2) The values set forth in the column below are the
difference between the market value of the Company's Common Stock
on the date the particular option was exercised and the exercise
price of such option.
(3) The options granted under the Company's Plans become
exercisable 20% after one year from date of grant, an additional
20% after two years, an additional 30% after three years, and the
remaining 30% after four years.
(4) The values are based on the difference between the
price of the Company's Common Stock on the New York Stock
Exchange at the close of trading on December 31, 1996 of $4.50
per share and the exercise price of such option. The actual
value realized by a named executive on the exercise of these
options depends on the market value of the Company's Common Stock
on the date of exercise.
(5) The amounts shown include 165,000 non-qualified stock
options which vest and are exercisable 20% on June 1, 1995, June
1, 1996, and June 1, 1997 with the remaining 40% exercisable June
1, 1998.
OTHER PLANS. The Board of Directors has adopted an LSB
Industries, Inc., Employee Savings Plan (the "401(k) Plan") for
the employees (including executive officers) of the Company and
its subsidiaries, excluding certain (but not all) employees
covered under union agreements. The 401(k) Plan is an employee
contribution plan, and the Company and its subsidiaries make no
contributions to the 401(k) Plan. The amount that an employee
may contribute to the 401(k) Plan equals a certain percentage of
the employee's compensation, with the percentage based on the
employee's income and certain other criteria as required under
Section 401(k) of the Internal Revenue Code. The Company or
subsidiary deducts the amounts contributed to the 401(k) Plan
from the employee's compensation each pay period, in accordance
with the employee's instructions, and pays the amount into the
401(k) Plan for the employee's benefit. The Summary Compensation
Table set forth above includes any amount contributed and
deferred during the 1994, 1995, and 1996 fiscal years pursuant to
the 401(k) Plan by the named executive officers of the Company.
The Company has a death benefit plan for certain key
employees. Under the plan, the designated beneficiary of an
employee covered by the plan will receive a monthly benefit for a
period of ten (10) years if the employee dies while in the
employment of the Company or a wholly-owned subsidiary of the
Company. The agreement with each employee provides, in addition
to being subject to other terms and conditions set forth in the
agreement, that the Company may terminate the agreement as to any
employee at anytime prior to the employee's death. The Company
has purchased life insurance on the life of each employee covered
under the plan to provide, in large part, a source of funds for
the Company's obligations under the Plan. The Company also will
fund a portion of the benefits by investing the proceeds of such
insurance policy received by the Company upon the employee's
death. The Company is the owner and sole beneficiary of the
insurance policy, with the proceeds payable to the Company upon
the death of the employee. The following table sets forth the
amounts of annual benefits payable to the designated beneficiary
or beneficiaries of the executive officers named in the Summary
Compensation Table set forth above under the above-described
death benefits plan.
Amount of
Name of Individual Annual Payment
------------------ --------------
Jack E. Golsen $175,000
Barry H. Golsen $ 30,000
David R. Goss $ 35,000
Tony M. Shelby $ 35,000
David M. Shear $ N/A
In addition to the above-described plans, during 1991 the
Company entered into a non-qualified arrangement with certain key
employees of the Company and its subsidiaries to provide
compensation to such individuals in the event that they are
employed by the Company or a subsidiary of the Company at age 65.
Under the plan, the employee will be eligible to receive for the
life of such employee, a designated benefit as set forth in the
plan. In addition, if prior to attaining the age 65 the employee
dies while in the employment of the Company or a subsidiary of
the Company, the designated beneficiary of the employee will
receive a monthly benefit for a period of ten (10) years. The
agreement with each employee provides, in addition to being
subject to other terms and conditions set forth in the agreement,
that the Company may terminate the agreement as to any employee
at any time prior to the employee's death. The Company has
purchased insurance on the life of each employee covered under
the plan where the Company is the owner and sole beneficiary of
the insurance policy, with the proceeds payable to the Company to
provide a source of funds for the Company's obligations under the
plan. The Company may also fund a portion of the benefits by
investing the proceeds of such insurance policies. Under the
terms of the plan, if the employee becomes disabled while in the
employment of the Company or a wholly-owned subsidiary of the
Company, the employee may request the Company to cash-in any life
insurance on the life of such employee purchased to fund the
Company's obligations under the plan. Jack E. Golsen does not
participate in the plan. The following table sets forth the
amounts of annual benefits payable to the executive officers
named in the Summary Compensation Table set forth above under
such retirement plan.
Amount of
Name of Individual Annual Payment
------------------ --------------
Barry H. Golsen $17,480
David R. Goss $17,403
Tony M. Shelby $15,605
David M. Shear $17,822
COMPENSATION OF DIRECTORS. In 1996, the Company compensated
each non-management director of the Company for his services in
the amount of $4,500, with the exception of Mr. Rhodes who
received $3,516 as a pro-rated fee for service during most of
1996 subsequent to his election to the Board in March 1996. The
non-management directors of the Company also received $500 for
every meeting of the Board of Directors attended during 1996.
Each member of the Audit Committee, consisting of Messrs. Rhodes,
Ille, Brown, and Shaffer, received an additional $20,000 for his
services in 1996, with the exception of Mr. Rhodes who received
$17,500. Each member of the Public Relations and Marketing
Committee, consisting of Messrs. Ackerman and Ille, received an
additional $20,000 for his services in 1996.
In September 1993, the Company adopted the 1993 Non-Employee
Director Stock Option Plan (the "Outside Director Plan"). The
Outside Director Plan authorizes the grant of non-qualified stock
options to each member of the Company's Board of Directors who is
not an officer or employee of the Company or its subsidiaries.
The maximum shares for which options may be issued under the
Outside Director Plan will be 150,000 shares (subject to
adjustment as provided in the Outside Director Plan). The
Company shall automatically grant to each outside director an
option to acquire 5,000 shares of the Company's Common Stock on
April 30 following the end of each of the Company's fiscal years
in which the Company realizes net income of $9.2 million or more
for such fiscal year. The exercise price for an option granted
under the Outside Director Plan shall be the fair market value of
the shares of Common Stock at the time the option is granted.
Each option granted under the Outside Director Plan, to the
extent not exercised, shall terminate upon the earlier of the
termination of the outside director as a member of the Company's
Board of Directors or the fifth anniversary of the date such
option was granted. On April 30, 1995, options to acquire 5,000
shares of Common Stock were granted under this plan to each of
Messrs. Ille, Brown, Shaffer, Thurman, and Ackerman, at a per
share exercise price of $5.375. As a result of the Company's
financial performance for 1996, the Company will not be granting
options under the Outside Director Plan on April 30, 1997.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE IN CONTROL ARRANGEMENTS.
(a) TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL AGREEMENTS.
In 1989, 1991, and 1996 the Company entered into severance
agreements with Jack E. Golsen, Barry H. Golsen, Tony M.
Shelby, David R. Goss, David M. Shear, and certain other
officers of the Company and subsidiaries of the Company.
Each severance agreement provides (among other things) that
if, within twenty-four (24) months after the occurrence of a
change in control (as defined) of the Company, the Company
terminates the officer's employment other than for cause (as
defined), or the officer terminates his employment for good
reason (as defined), the Company must pay the officer an
amount equal to 2.9 times the officer's base amount (as
defined). The phrase "base amount" means the average annual
gross compensation paid by the Company to the officer and
includable in the officer's gross income during the period
consisting of the most recent five (5) year period
immediately preceding the change in control. If the officer
has been employed by the Company for less than 5 years, the
base amount is calculated with respect to the most recent
number of taxable years ending before the change in control
that the officer worked for the Company.
The severance agreements provide that a "change in control"
means a change in control of the Company of a nature that
would require the filing of a Form 8-K with the Securities
and Exchange Commission and, in any event, would mean when:
(1) any individual, firm, corporation, entity, or group (as
defined in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended) becomes the beneficial owner, directly
or indirectly, of thirty percent (30%) or more of the
combined voting power of the Company's outstanding voting
securities having the right to vote for the election of
directors, except acquisitions by: (a) any person, firm,
corporation, entity, or group which, as of the date of the
severance agreement, has that ownership, or (b) Jack E.
Golsen, his wife; his children and the spouses of his
children; his estate; executor or administrator of any
estate, guardian or custodian for Jack E. Golsen, his wife,
his children, or the spouses of his children, any
corporation, trust, partnership, or other entity of which
Jack E. Golsen, his wife, children, or the spouses of his
children own at least eighty percent (80%) of the
outstanding beneficial voting or equity interests, directly
or indirectly, either by any one or more of the above-
described persons, entities, or estates; and certain
affiliates and associates of any of the above-described
persons, entities, or estates; (2) individuals who, as of
the date of the severance agreement, constitute the Board of
Directors of the Company (the "Incumbent Board") and who
cease for any reason to constitute a majority of the Board
of Directors except that any person becoming a director
subsequent to the date of the severance agreement, whose
election or nomination for election is approved by a
majority of the Incumbent Board (with certain limited
exceptions), will constitute a member of the Incumbent
Board; or (3) the sale by the Company of all or
substantially all of its assets.
Except for the severance agreement with Jack E. Golsen, the
termination of an officer's employment with the Company "for
cause" means termination because of: (a) the mental or
physical disability from performing the officer's duties for
a period of one hundred twenty (120) consecutive days or one
hundred eighty days (even though not consecutive) within a
three hundred sixty (360) day period; (b) the conviction of
a felony; (c) the embezzlement by the officer of Company
assets resulting in substantial personal enrichment of the
officer at the expense of the Company; or (d) the willful
failure (when not mentally or physically disabled) to follow
a direct written order from the Company's Board of Directors
within the reasonable scope of the officer's duties
performed during the sixty (60) day period prior to the
change in control. The definition of "Cause" contained in
the severance agreement with Jack E. Golsen means
termination because of: (a) the conviction of Mr. Golsen of
a felony involving moral turpitude after all appeals have
been completed; or (b) if Mr. Golsen's serious, willful,
gross misconduct or willful, gross neglect of his duties has
resulted in material damages to the Company and its
subsidiaries, taken as a whole; provided that (i) no action
or failure to act by Mr. Golsen will constitute a reason for
termination if he believed, in good faith, that such action
or failure to act was in the Company's or its subsidiaries'
best interest, and (ii) failure of Mr. Golsen to perform his
duties hereunder due to disability shall not be considered
willful, gross misconduct or willful, gross negligence of
his duties for any purpose.
The termination of an officer's employment with the Company
for "good reason" means termination because of (a) the
assignment to the officer of duties inconsistent with the
officer's position, authority, duties, or responsibilities
during the sixty (60) day period immediately preceding the
change in control of the Company or any other action which
results in the diminishment of those duties, position,
authority, or responsibilities; (b) the relocation of the
officer; (c) any purported termination by the Company of the
officer's employment with the Company otherwise than as
permitted by the severance agreement; or (d) in the event of
a change in control of the Company, the failure of the
successor or parent company to agree, in form and substance
satisfactory to the officer, to assume (as to a successor)
or guarantee (as to a parent) the severance agreement as if
no change in control had occurred.
Except for the severance agreement with Jack E. Golsen, each
severance agreement runs until the earlier of: (a) three
years after the date of the severance agreement, or (b) the
officer's normal retirement date from the Company; however,
beginning on the first anniversary of the severance
agreement and on each annual anniversary thereafter, the
term of the severance agreement automatically extends for an
additional one-year period, unless the Company gives notice
otherwise at least sixty (60) days prior to the anniversary
date. The severance agreement with Jack E. Golsen is
effective for a period of three (3) years from the date of
the severance agreement; except that, commencing on the date
one (1) year after the date of such severance agreement and
on each annual anniversary thereafter, the term of such
severance agreement shall be automatically extended so as to
terminate three (3) years from such renewal date, unless the
Company gives notices otherwise at least one (1) year prior
to the renewal date.
Effective June 1, 1994, the Company extended until June 1,
1999, the option period of a nonqualified stock option
previously granted to Jack E. Golsen for the purchase of
165,000 shares of the Company's Common Stock at an exercise
price of $2.625 per share (the "Extended NQSO"). The
Extended NQSO vests and becomes exercisable at twenty
percent (20%) per year on June 1, 1995, 1996, and 1997, and
the remaining forty percent (40%) becomes exercisable on
June 1, 1998. The terms of the Extended NQSO provide, in
part, that the Extended NQSO shall become immediately
exercisable upon a change in control of the Company. A
"change in control" for purposes of the Extended NQSO, shall
be deemed to have occurred upon any of the following events:
(i) consummation of any of the following transactions: any
merger, recapitalization, or other business combination of
the Company pursuant to which the Company is the non-
surviving corporation, unless the majority of the holders of
Common Stock immediately prior to such transaction will own
at least fifty percent (50%) of the total voting power of
the then outstanding securities of the surviving corporation
immediately after such transaction; (ii) a transaction in
which any person, corporation, or other entity (A) shall
purchase any Common Stock pursuant to a tender offer or
exchange offer, without the prior consent of the Board of
Directors or (B) shall become the "beneficial owner" (as
such term is defined in Rule 13(d)(3) under the Securities
Exchange Act of 1934, as amended) of securities of the
Company representing fifty percent (50%) or more of the
total voting power of the then outstanding securities of the
Company; or (iii) if, during any period of two (2)
consecutive years, individuals who, at the beginning of such
period, constituted the entire Board of Directors and any
new director whose election by the Board of Directors, or
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the
beginning of the period or whose election or nomination for
election by the stockholders was previously approved, cease
for any reason to constitute a majority thereof.
(b) EMPLOYMENT AGREEMENT. In March 1996, the Company entered
into an employment agreement with Jack E. Golsen. The
employment agreement requires the Company to employ Jack E.
Golsen as an executive officer of the Company for an initial
term of three (3) years and provides for two (2) automatic
renewals of three (3) years each unless terminated by either
party by the giving of written notice at least one (1) year
prior to the end of the initial or first renewal period,
whichever is applicable. Under the terms of such employment
agreement, Mr. Golsen shall be paid (i) an annual base
salary at his base rate, as adjusted from time to time by
the Compensation Committee, but such shall never be adjusted
to an amount less than Mr. Golsen's 1995 base salary, (ii)
an annual bonus in an amount as determined by the
Compensation Committee, and (iii) receive from the Company
certain other fringe benefits. The employment agreement
provides that Mr. Golsen's employment may not be terminated,
except (i) upon conviction of a felony involving moral
turpitude after all appeals have been exhausted, (ii) Mr.
Golsen's serious, willful, gross misconduct or willful,
gross negligence of duties resulting in material damage to
the Company and its subsidiaries, taken as a whole, unless
Mr. Golsen believed, in good faith, that such action or
failure to act was in the Company's or its subsidiaries'
best interest, and (iii) Mr. Golsen's death; provided,
however, no such termination under (i) or (ii) above may
occur unless and until the Company has delivered to Mr.
Golsen a resolution duly adopted by an affirmative vote of
three-fourths of the entire membership of the Board of
Directors at a meeting called for such purpose after
reasonable notice given to Mr. Golsen finding, in good
faith, that Mr. Golsen violated (i) or (ii) above. If Mr.
Golsen's employment is terminated in breach of this
Agreement, then he shall, in addition to his other rights
and remedies, receive and the Company shall pay to Mr.
Golsen (i) in a lump sum cash payment, on the date of
termination, a sum equal to the amount of Mr. Golsen's
annual base salary at the time of such termination and the
amount of the last bonus paid to Mr. Golsen prior to such
termination times (a) the number of years remaining under
the employment agreement or (b) four (4) if such termination
occurs during the last twelve (12) months of the initial
period or the first renewal period, and (ii) provide to Mr.
Golsen all of the fringe benefits that the Company was
obligated to provide during his employment under the
employment agreement for the remainder of the term of the
employment agreement, or, if terminated at any time during
the last twelve (12) months of the initial period or first
renewal period, then during the remainder of the term and
the next renewal period.
If there is a change in control (as defined in the severance
agreement between Mr. Golsen and the Company) and within twenty-
four (24) months after such change in control Mr. Golsen is
terminated, other than for Cause (as defined in the severance
agreement), then in such event, the severance agreement between
Mr. Golsen and the Company shall be controlling.
In the event Mr. Golsen becomes disabled and is not able to
perform his duties under the employment agreement as a result
thereof for a period of twelve (12) consecutive months within any
two (2) year period, the Company shall pay Mr. Golsen his full
salary for the remainder of the term of the employment agreement
and thereafter sixty percent (60%) of such salary until Mr.
Golsen's death.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
The Company's Executive Salary Review Committee has the authority
to set the compensation of all officers of the Company. This
Committee generally considers and approves the recommendations of
the President. The members of the Executive Salary Review
Committee are the following non-management directors: Robert C.
Brown, M.D., Jerome D. Shaffer, M.D., and Bernard G. Ille.
During 1996, the Executive Salary Review Committee had one (1)
meeting.
See "Compensation of Directors" for information concerning
compensation paid and options granted to non-employee directors
of the Company during 1996 for services as a director to the
Company.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNER AND
MANAGEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. The
following table shows the total number and percentage of the
outstanding shares of the Company's voting Common Stock and
voting Preferred Stock beneficially owned as of the close of
business as of April 29, 1997, with respect to each person
(including any "group" as used in Section 13(d)(3) of the
Securities Act of 1934, as amended) that the Company knows to
have beneficial ownership of more than five percent (5%) of the
Company's voting Common Stock and voting Preferred Stock. A
person is deemed to be the beneficial owner of voting shares of
Common Stock of the Company which he or she could acquire within
sixty (60) days of April 29, 1997.
Because of the requirements of the Securities and Exchange
Commission as to the method of determining the amount of shares
an individual or entity may beneficially own, the amounts shown
below for an individual or entity may include shares also
considered beneficially owned by others.
Amounts
Name and Address Title of Shares Percent
of of Beneficially of
Beneficial Owner Class Owned(1) Class
- ----------------------- ------------- ---------------- ------
Jack E. Golsen and Common 3,944,486 (3)(5)(6) 28.4%
members of his family(2) Voting Preferred 20,000 (4)(6) 92.7%
Riverside Capital
Advisors, Inc. Common 1,742,832 (7) 12.0%
Ryback Management
Corporation Common 1,424,674 (8) 9.9%
Dimensional Fund
Advisors, Inc. Common 747,900 (9) 5.8%
______________________________________
(1) The Company based the information, with respect to
beneficial ownership, on information furnished by the above-named
individuals or entities or contained in filings made with the
Securities and Exchange Commission or the Company's records.
(2) Includes Jack E. Golsen and the following members of
his family: wife, Sylvia H. Golsen; son, Barry H. Golsen (a
Director, Vice Chairman of the Board of Directors, and President
of the Environmental Control Business of the Company); son,
Steven J. Golsen (Executive officer of several subsidiaries of
the Company); and daughter, Linda F. Rappaport. The address of
Jack E. Golsen, Sylvia H. Golsen, Barry H. Golsen, and Linda F.
Rappaport is 16 South Pennsylvania Avenue, Oklahoma City,
Oklahoma 73107; and Steven J. Golsen's address is 7300 SW 44th
Street, Oklahoma City, Oklahoma 73179.
(3) Includes (a) the following shares over which Jack E.
Golsen ("J. Golsen") has the sole voting and investment power:
(i) 89,028 shares that he owns of record, (ii) 99,000 shares that
he has the right to acquire within sixty (60) days under a non-
qualified stock option, (iii) 4,000 shares that he has the right
to acquire upon conversion of a promissory note,(iv) 133,333
shares that he has the right to acquire upon the conversion of
4,000 shares of the Company's Series B 12% Cumulative Convertible
Preferred Stock (the "Series B Preferred") owned of record by
him, (v) 10,000 shares owned of record by the MG Trust, of which
he is the sole trustee, and (vi) 40,000 shares that he has the
right to acquire within the next sixty (60) days under the
Company's stock option plans; (b) 1,081,984 shares owned of
record by Sylvia H. Golsen, over which she and her husband, J.
Golsen share voting and investment power; (c) 244,563 shares over
which Barry H. Golsen ("B. Golsen") has the sole voting and
investment power, 533 shares owned of record by B. Golsen's wife,
over which he shares the voting and investment power, and 9,000
shares that he has the right to acquire within the next sixty
(60) days under the Company's stock option plans; (d) 204,934
shares over which Steven J. Golsen ("S. Golsen") has the sole
voting and investment power and 9,000 shares that he has the
right to acquire within the next sixty (60) days under the
Company's stock option plans; (e) 217,460 shares held in trust
for the grandchildren of J. Golsen and Sylvia H. Golsen of which
B. Golsen, S. Golsen and Linda F. Rappaport ("L. Rappaport")
jointly or individually are trustees; (f) 82,552 shares owned of
record by L. Rappaport, over which L. Rappaport has the sole
voting and investment power; (g) 1,042,699 shares owned of record
by SBL Corporation ("SBL"), 82,467 shares that SBL has the right
to acquire upon conversion of 19,050 shares of the Company's
$3.25 Convertible Exchangeable Class C Preferred Stock, Series 2
(the "Series 2 Preferred"), and 400,000 shares that SBL has the
right to acquire upon conversion of 12,000 shares of Series B
Preferred owned of record by SBL, and (h) 60,600 shares owned of
record by Golsen Petroleum Corporation ("GPC"), which is a
wholly-owned subsidiary of SBL, and 133,333 shares that GPC has
the right to acquire upon conversion of 4,000 shares of Series B
Preferred owned of record by GPC. SBL is wholly-owned by Sylvia
H. Golsen (40% owner), B. Golsen (20% owner), S. Golsen (20%
owner), and L. Rappaport (20% owner) and, as a result, SBL, J.
Golsen, Sylvia H. Golsen, B. Golsen, S. Golsen, and L. Rappaport
share the voting and investment power of the shares beneficially
owned by SBL. SBL's address is 16 South Pennsylvania Avenue,
Oklahoma City, Oklahoma 73107.
(4) Includes: (a) 4,000 shares of Series B Preferred owned
of record by J. Golsen, over which he has the sole voting and
investment power; (b) 12,000 shares of Series B Preferred owned
of record by SBL; and (c) 4,000 shares owned of record by SBL's
wholly-owned subsidiary, GPC, over which SBL, J. Golsen, Sylvia
H. Golsen, B. Golsen, S. Golsen, and L. Rappaport share the
voting and investment power.
(5) Does not include 122,297 shares of Common Stock that L.
Rappaport's husband owns of record and 9,000 shares which he has
the right to acquire within the next sixty (60) days under the
Company's stock option plans, all of which L. Rappaport disclaims
beneficial ownership. Does not include 219,520 shares of Common
Stock owned of record by the 1992 Trusts of B. Golsen, S. Golsen,
and L. Rappaport over which B. Golsen, S. Golsen and L. Rappaport
have no voting or dispositive power. Heidi Brown Shear is the
Trustee of each of these trusts.
(6) J. Golsen disclaims beneficial ownership of the shares
that B. Golsen, S. Golsen, and L. Rappaport each have the sole
voting and investment power over as noted in footnote (3) above.
B. Golsen, S. Golsen, and L. Rappaport disclaim beneficial
ownership of the shares that J. Golsen has the sole voting and
investment power over as noted in footnotes (3) and (4) and the
shares owned of record by Sylvia H. Golsen. Sylvia H. Golsen
disclaims beneficial ownership of the shares that J. Golsen has
the sole voting and investment power over as noted in footnotes
(3) and (4) above.
(7) Riverside Capital Advisors may be deemed to beneficially
own these shares as a result of having full discretionary
investment authority over customers accounts to which it
provides investment services. This amount includes 1,577,487
shares of Common Stock that may be acquired upon conversion of
364,400 shares of the Company's Series 2 Preferred. This amount
does not include 79,422 shares of Common Stock held by officers
and directors of Riverside who share control over investment
decisions made by it, as to which Riverside disclaims beneficial
ownership.
(8) Ryback Management Corporation ("Ryback") is the
Investment Company Advisor for Lindner Dividend Fund, a
registered investment company, which owns 329,100 shares of
Series 2 Preferred that is convertible into 1,424,674 shares of
Common Stock. Ryback has sole voting and investment power over
these shares.
(9) Dimensional Fund Advisors, Inc. ( Dimensional ), a
registered investment advisor, is deemed to have beneficial
ownership of 747,900 shares of LSB Industries, Inc. stock as of
December 31, 1996, all of which shares are held in portfolios of
DFA Investment Dimensions Group Inc., a registered open-end
investment company, or in series of the DFA Investment Trust
Company, a Delaware business trust, or the DFA Group Trust and
DFA Participation Group Trust, investment vehicles for qualified
employee benefit plans, all of which Dimensional Fund Advisors
Inc. serves as investment manager. Dimensional disclaims
beneficial ownership of all such shares.
Security Ownership of Management. The following table sets
forth information obtained from the directors of the Company and
the directors and executive officers of the Company as a group as
to their beneficial ownership of the Company's voting Common
Stock and voting Preferred Stock as of April 29, 1997.
Because of the requirements of the Securities and Exchange
Commission as to the method of determining the amount of shares
an individual or entity may own beneficially, the amount shown
below for an individual may include shares also considered
beneficially owned by others. Any shares of stock which a person
does not own, but which he or she has the right to acquire within
sixty (60) days of April 29, 1997, are deemed to be outstanding
for the purpose of computing the percentage of outstanding stock
of the class owned by such person but are not deemed to be
outstanding for the purpose of computing the percentage of the
class owned by any other person.
Amounts of
Shares
Name of Title of Beneficially Percent of
Beneficial Owner Class Owned Class
- -------------------- ------- ----------- ----------
Raymond B. Ackerman Common 11,000(2) *
Robert C. Brown, M.D. Common 218,329(3) 1.7%
Barry H. Golsen Common 2,190,655(4) 16.1%
Voting Preferred 16,000(4) 74.2%
Jack E. Golsen Common 3,176,444(5) 22.9%
Voting Preferred 20,000(5) 92.7%
David R. Goss Common 200,585(6) 1.5%
Bernard G. Ille Common 75,000(7) *
Horace G. Rhodes Common 5,000 *
Jerome D. Shaffer, M.D. Common 149,703(8) 1.2%
Tony M. Shelby Common 204,880(9) 1.6%
Directors and Common 4,643,933(10) 33.1%
Executive Officers Voting Preferred 20,000 92.7%
as a group(11
persons)
- --------------------------------
* Less than 1%.
(1) The Company based the information, with respect to
beneficial ownership, on information furnished by each director
or officer, contained in filings made with the Securities and
Exchange Commission, or contained in the Company s records.
(2) Mr. Ackerman has sole voting and investment power over
these shares. 1,000 of these shares are held in a trust for
which Mr. Ackerman is both the settlor and the trustee and in
which he has the vested interest in both the corpus and income.
The remaining 10,000 shares of Common Stock included herein are
shares that Mr. Ackerman may acquire pursuant to currently
exercisable non-qualified stock options granted to him by the
Company.
(3) The amount shown includes 25,000 shares of Common Stock
that Dr. Brown may acquire pursuant to currently exercisable non-
qualified stock options granted to him by the Company. The
shares, with respect to which Dr. Brown shares the voting and
investment power, consist of 122,516 shares owned by Dr. Brown's
wife, 50,727 shares owned by Robert C. Brown, M.D., Inc., a
corporation wholly-owned by Dr. Brown, and 20,086 shares held by
the Robert C. Brown M.D., Inc. Employee Profit Sharing Plan, of
which Dr. Brown serves as the trustee. The amount shown does not
include 57,190 shares directly owned by the children of Dr.
Brown, all of which Dr. Brown disclaims beneficial ownership.
(4) See footnotes (3), (4), and (6) of the table under
"Security Ownership of Certain Beneficial Owners" of this item
for a description of the amount and nature of the shares
beneficially owned by B. Golsen, including 9,000 shares B. Golsen
has the right to acquire within sixty (60) days.
(5) See footnotes (3), (4), and (6) of the table under
"Security Ownership of Certain Beneficial Owners" of this item
for a description of the amount and nature of the shares
beneficially owned by J. Golsen, including the shares J. Golsen
has the right to acquire within sixty (60) days.
(6) The amount shown includes 12,000 shares that Mr. Goss
has the right to acquire within sixty (60) days pursuant to
options granted under the Company's stock option plans, over
which Mr. Goss has the sole voting and investment power. Mr.
Goss disclaims beneficial ownership of 2,429 shares owned by Mr.
Goss' wife, individually, and/or as custodian for Mr. Goss'
children.
(7) The amount includes (i) 25,000 shares that Mr. Ille may
purchase pursuant to currently exercisable non-qualified stock
options, over which Mr. Ille has the sole voting and investment
power, and (ii) 50,000 shares owned of record by Mr. Ille's wife.
Mr. Ille disclaims beneficial ownership of the 50,000 shares
owned by Mr. Ille's wife.
(8) Dr. Shaffer has the sole voting and investment power
over these shares, which include 15,000 shares that Dr. Shaffer
may purchase pursuant to currently exercisable non-qualified
stock options and 4,329 shares that Dr. Shaffer has the right to
acquire upon conversion of 1,000 shares of Series 2 Preferred
owned by Dr. Shaffer.
(9) Mr. Shelby has the sole voting and investment power
over these shares, which include 12,000 shares that Mr. Shelby
has the right to acquire within sixty (60) days pursuant to
options granted under the Company's ISOs and 15,152 shares that
Mr. Shelby has the right to acquire upon conversion of 3,500
shares of Series 2 Preferred owned by Mr. Shelby.
(10) The amount shown includes 1,052,213 shares of Common
Stock that officers, directors, or entities controlled by
officers and directors of the Company have the right to acquire
within sixty (60) days.
ITEN 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
A subsidiary of the Company, Hercules Energy Mfg.
Corporation ("Hercules"), leases land and a building in Oklahoma
City, Oklahoma from Mac Venture, Ltd. ("Mac Venture"), a limited
partnership. GPC serves as the general partner of Mac Venture.
The limited partners of Mac Venture include GPC and the three
children of Jack E. Golsen. See "Security Ownership of Certain
Beneficial Owners and Security Ownership of Management", above,
for a discussion of the stock ownership of GPC. The land leased
by Hercules from Mac Venture consists of a total of 341,000
square feet, with 44,000 square feet in the building. Hercules
leases the property from Mac Venture for $7,500 per month under a
triple net lease which began as of January 1, 1982, and expires
on December 31, 1998.
Northwest Internal Medicine Associates, ("Northwest") a
division of Plaza Medical Group., P.C., has an agreement with the
Company to perform medical examinations of the management and
supervisory personnel of the Company and its subsidiaries. Under
such agreement, Northwest is paid $4,000 a month to perform all
such examinations. Dr. Robert C. Brown (a director of the
Company) is a co-owner of Plaza Medical Group., P.C.
In 1983, LSB Chemical Corp. ("LSB Chemical"), a subsidiary
of the Company, acquired all of the outstanding stock of El
Dorado Chemical Company ("EDC") from its then four stockholders
("Ex-Stockholders"). A substantial portion of the purchase price
consisted of an earnout based primarily on the annual after-tax
earnings of EDC for a ten-year period. During 1989, two of the
Ex-Stockholders received LSB Chemical promissory notes for a
portion of their earnout, in lieu of cash, totaling approximately
$896,000, payable $496,000 in January 1990, and $400,000 in May
1994. LSB Chemical agreed to a buyout of the balance of the
earnout from the four Ex-Stockholders for an aggregate purchase
amount of $1,231,000. LSB Chemical purchased for cash the
earnout from two of the Ex-Stockholders and issued multi-year
promissory notes totaling $676,000 to the other two Ex-
Stockholders. Jack E. Golsen guaranteed LSB Chemical's payment
obligation under the promissory notes. The unpaid balance of
these notes at March 31, 1997, was $400,000.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended, the Company has
caused the undersigned, duly-authorized, to sign this report on
its behalf of this 29th day of April, 1997.
LSB INDUSTRIES, INC.
By: /s/ Jack E. Golsen
--------------------
Jack E. Golsen
Chairman of the Board and
President
(Principal Executive Officer)
By: /s/ Tony M. Shelby
---------------------
Tony M. Shelby
Senior Vice President of Finance
(Principal Financial Officer)
By: /s/ Jim D. Jones
--------------------
Jim D. Jones
Vice President, Controller and
Treasurer (Principal Accounting
Officer)
Pursuant to the requirements of the Securities Exchange Act
of 1934, as amended, the undersigned have signed this report on
behalf of the Company, in the capacities and on the dates
indicated.
Dated: April 29, 1997 By:
/s/ Jack E. Golsen
------------------------
Jack E. Golsen, Director
Dated: April 29, 1997 By:
/s/ Tony M. Shelby
-------------------------
Tony M. Shelby, Director
Dated: April 29, 1997 By:
/s/ David R. Goss
-------------------------
David R. Goss, Director
Dated: April 29, 1997 By:
/s/ Barry H. Golsen
-------------------------
Barry H. Golsen, Director
Dated: April 29, 1997 By:
/s/ Robert C. Brown
-------------------------
Robert C. Brown, Director
Dated: April 29, 1997 By:
/s/ Bernard G. Ille
--------------------------
Bernard G. Ille, Director
Dated: April 29, 1997 By:
/s/ Jerome D. Shaffer
---------------------------
Jerome D. Shaffer, Director
Dated: April 29, 1997 By:
/s/ Raymond B. Ackerman
-----------------------------
Raymond B. Ackerman, Director
Dated: April 29, 1997 By:
/s/ Horace Rhodes
-----------------------
Horace Rhodes, Director
