As Filed with the Securities and Exchange Commission on September 3, 1998
                                         Registration No. 333-___________
=========================================================================
                  SECURITIES AND EXCHANGE COMMISSION
                       WASHINGTON, D.C.   20549
                         ____________________

                               FORM S-8

                        REGISTRATION STATEMENT
                                 UNDER
                      THE SECURITIES ACT OF 1933

                         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)

        Non-Qualified Stock Option Agreement (James F. Damiani)
        ______________________________________________________
                         (Full Title of Plan)

        Heidi L. Brown, Esquire                  Copy to:
          Vice President and            Irwin H. Steinhorn, Esquire
           Managing Counsel                  CONNER & WINTERS
         LSB INDUSTRIES, INC.             One Leadership Square
        16 South Pennsylvania                    Suite 1700
         Post Office Box 754                211 North Robinson
     Oklahoma City, Oklahoma 73101      Oklahoma City, Oklahoma 73102
           (405) 235-4546               
     _____________________________
CALCULATION OF REGISTRATION FEE _______________________________ Title of Proposed Proposed securities Amount maximum maximum Amount of to be to be offering price aggregate Registration registered registered per share(1) offering price(1) fee __________ __________ _______________ _______________ ____________ Common Stock to 25,000 $4.25 $106,250 $31 be issued under Non-Qualified Stock Option Agreements _________________ (1) Estimated in accordance with Rule 457(h) solely for the purpose of calculating the registration fee on the basis of $4.1875, which is the exercise price of the options granted under the Non-Qualified Stock Option Agreement.
LSB INDUSTRIES, INC. REGISTRATION STATEMENT ON FORM S-8 PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS Explanatory Note: The Section 10(a) Prospectus being delivered by LSB Industries, Inc. (the "Company") to James F. Damiani, an employee of the Company or its subsidiaries, in connection with the Non-Qualified Stock Option Agreement between Mr. Damiani and the Company has been prepared in accordance with the requirements of Form S-8 and relates to shares of common stock, par value $.10 per share, of the Company which have been reserved for issuance pursuant to the Non-Qualified Stock Option Agreement. Information regarding the Non-Qualified Stock Option Agreement required in the Section 10(a) Prospectus is included in the documents being maintained and delivered by the Company as required by Rule 428 under the Securities Act of 1933, as amended (the "Act"). The Company will provide to Mr. Damiani a written statement advising him of the availability without charge, upon written or oral request, of documents incorporated by reference herein, as required by Item 2 of Part I of Form S-8. Upon request, the Company will furnish to the Securities and Exchange Commission or its staff a copy or copies of all the documents included in such file. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. This Registration Statement incorporates herein by reference the following documents and information which have been filed by LSB Industries, Inc. (the "Company") with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"): (1) The Company's Annual Report on Form 10-K for the year ending December 31, 1997. (2) The Company's Annual Report on Form 10-K/A for the year ending December 31, 1997. (3) The Company's Quarterly Report on Form 10-Q for the three months ending March 31, 1998. (4) The Company's Amended Quarterly Report on Form 10-Q/A for the three months ending March 31, 1998. II-1 (5) The Company's Quarterly Report on Form 10-Q for the three months ending June 30, 1998. (6) The description of the Company's Common Stock contained in the Company's Registration Statement on Form 8-A, dated August 16, 1994, including any amendment or report filed for the purpose of updating such description. All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act on or after the date of this Registration Statement and prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold shall be deemed to be incorporated by reference in this Registration Statement and to be part hereof from the date of filing of such documents. Item 4. Description of Securities. Not applicable. Item 5. Interests of Named Experts and Counsel. Counsel for the Company, Conner & Winters, A Professional Corporation, One Leadership Square, Suite 1700, 211 North Robinson, Oklahoma City, Oklahoma 73102, has rendered an opinion as to the Common Stock offered hereby. As of the date of this Registration Statement, Irwin H. Steinhorn, a member of Conner & Winters, beneficially owned 6,250 shares of the Company's Common Stock. Item 6. Indemnification of Directors and Officers. The Company's Certificate of Incorporation limits the liability of directors to the maximum extent permitted by Delaware law. Delaware law provides that directors of a company will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability (a) for any breach of their duty of loyalty to the company or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (c) for unlawful payments or dividends or unlawful stock repurchases or redemptions as provided Section 174 of Delaware General Corporation Law or (d) for transactions from which the director derived an improper personal benefit. The Company carries officer and director liability insurance with respect to certain matters, including matters arising under the Securities Act of 1933, as amended (the "Securities Act"). Insofar as indemnification for liabilities arising under the Securities Act is permitted to directors and officers of the Corporation pursuant to the foregoing provisions, or otherwise, the Company has been informed that in the opinion of the Commission such indemnification is against public policy, as expressed in the Securities Act, and is therefore unenforceable. II-2 Item 7. Exemption from Registration Claimed. Not Applicable. Item 8. Exhibits.
Exhibit Number Description _______ ___________ 5.1 Opinion of Conner & Winters, A Professional Corporation 15.1 Letter of Acknowledgment regarding unaudited interim financial information 23.1 Consent of Ernst & Young, LLP 23.2 Consent of Conner & Winters, A Professional Corporation (contained in Exhibit 5.1) 24.1 Power of Attorney (see page II-5) 99.1 Non-Qualified Stock Option Agreement, dated June 27, 1997, between the Company and James F. Damiani
Item 9. Undertakings. A. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, as amended (the "Securities Act"), each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. B. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section II-3 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. C. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto, duly authorized, in the City of Oklahoma City, Oklahoma on August 31, 1998. LSB INDUSTRIES, INC. By /s/ Jack E. Golsen ________________________________ Jack E. Golsen, President and Chief Executive Officer POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jack E. Golsen and Heidi L. Brown, jointly and severally, his or her attorneys-in- fact, each with the power of substitution, for him or her in any and all capacities, to sign any amendments to this Registration Statement on Form S-8 and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitution or substitutes, may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this Registration Statement has been signed on August 31, 1998, by the following persons in the capacities indicated: /s/ Jack E. Golsen _________________________ President, Chief Executive Jack E. Golsen Officer, Chairman of the Board and Director (Principal Executive Officer) /s/ Tony M. Shelby _________________________ Senior Vice President of Tony M. Shelby Finance and Director (Principal Financial Officer) /s/ Jim D. Jones _________________________ Vice President, Controller and Jim D. Jones Treasurer (Principal Accounting Officer) II-5 /s/ Raymond B. Ackerman _________________________ Director Raymond B. Ackerman /s/ Robert C. Brown _________________________ Director Robert C. Brown /s/ Gerald J. Gagner _________________________ Director Gerald J. Gagner /s/ Barry H. Golsen _________________________ Director Barry H. Golsen /s/ David R. Goss _________________________ Director David R. Goss /s/ Bernard G. Ille _________________________ Director Bernard G. Ille /s/ Donald W. Munson _________________________ Director Donald W. Munson /s/ Horace G. Rhodes _________________________ Director Horace G. Rhodes /s/ Jerome D. Shaffer _________________________ Director Jerome D. Shaffer II-6
EXHIBIT INDEX Exhibit Sequential Number Description Page Number _______ ___________ ___________ 5.1 Opinion of Conner & Winters, A Professional Corporation 8 15.1 Letter of Acknowledgment regarding unaudited interim financial information 10 23.1 Consent of Ernst & Young, LLP 11 23.2 Consent of Conner & Winters, A Professional Corporation (contained in Exhibit 5.1) 24.1 Power of Attorney (see page II-5) 99.1 Non-Qualified Stock Option Agreement, dated June 27, 1997, between the Company and James F. Damiani 12
                         CONNER & WINTERS
                    A PROFESSIONAL CORPORATION
                             LAWYERS
                      ONE LEADERSHIP SQUARE
                  211 NORTH ROBINSON, SUITE 1700
                OKLAHOMA CITY, OKLAHOMA 73102-7101


                          September 1, 1998


LSB Industries, Inc.
16 South Pennsylvania
Post Office Box 754
Oklahoma City, Oklahoma 73101

     Re:  LSB Industries, Inc.; Form S-8 Registration
          Statement; Non-Qualified Stock Option Agreement
          (James F. Damiani); Our File No. 7033.11
          __________________________________________________

Ladies and Gentlemen:

     We are delivering this opinion to you in connection with the
preparation and filing with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended
(the "Act"), of the Registration Statement on Form S-8 (the
"Registration Statement") of LSB Industries, Inc., a Delaware
corporation (the "Company"), for the registration of 25,000 shares
of the Company's common stock, $0.10 par value (the "Common
Stock"), to be issued by the Company pursuant to the Non-Qualified
Stock Option Agreement, dated June 27, 1997, granted to James F.
Damiani, an employee of the Company or the Company's wholly owned
subsidiaries (the "Non-Qualified Agreement").  

     In connection with this opinion, the undersigned has examined
and relied upon such corporate records, certificates, other
documents and questions of law, as we have considered necessary or
appropriate for the purposes of this opinion, including, but not
limited to, the following: 

     (a)  Company's Certificate of Incorporation, as amended;

     (b)  Company's Bylaws, as amended;

     (c)  the Non-Qualified Agreement;



LSB Industries, Inc.
September 1, 1998
Page 2


     (d)  Resolutions of the Board of Directors of the Company,
          dated June 27, 1997;

     (e)  Certificate of Good Standing of the Company issued
          by the Secretary of State of Delaware, on July 23,
          1998;

     (f)  Registration Statement; and

     (g)  Summary Information regarding the Agreement.

     In our examination, we have assumed the genuineness of all
signatures, the legal capacity of all persons, the authenticity of
all documents submitted as originals, the conformity with the
original documents of all documents submitted as certified or
photostatic copies, and the authenticity of the originals of such
copies.  We have further assumed that any shares of the Company's
Common Stock to be issued under the Agreement will have been issued
pursuant to the terms of the Agreement and will have been
registered in accordance with the Act, absent the application of an
exemption from registration, prior to the issuance of such shares.

     In reliance upon and based on such examination and review, we
are of the opinion that, when the Registration Statement becomes
effective pursuant to the rules and regulations of the Commission,
the 25,000 shares of Common Stock which may be issued pursuant to
the Non-Qualified Agreement will constitute, when purchased and issued 
pursuant to the terms of the Non-Qualified Agreement, duly authorized, 
validly issued, fully paid and nonassessable shares of Common Stock of 
the Company.

     We hereby consent to the filing of this opinion as Exhibit 5.1
to the Registration Statement and to the reference to Conner &
Winters, a Professional Corporation, in Item 5 "Interests of Named
Experts and Counsel" of the Registration Statement.  However,
in rendering this opinion, we do not admit that we are acting
within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Act.

                                   Very truly yours,

                                   CONNER & WINTERS,
                                   a Professional Corporation

                                   /s/ Conner & Winters, P. C.


IHS/MHB/plh









   Letter of Acknowledgment Re: Unaudited Financial Information



                                                            
                                                       
The Board of Directors
LSB Industries, Inc.


We are aware of the incorporation by reference in the Registration
Statement (Form S-8 No. 333-________) of LSB Industries, Inc. for
the registration of 25,000 shares of its common stock under the
Non-Qualified Stock Option Agreement (James F. Damiani) of LSB
Industries, Inc. of our reports dated May 12, 1998 and August 14,
1998, relating to the unaudited condensed consolidated interim
financial statements of LSB Industries, Inc. that are included in
its Forms 10-Q, as amended, for the quarters ended March 31, 1998
and June 30, 1998.

Pursuant to Rule 436(c) of the Securities Act of 1933, our reports
are not a part of the registration statement prepared or certified
by accountants within the meaning of Section 7 or 11 of the
Securities Act of 1933.



                                        /s/ Ernst & Young LLP

                                        ERNST & YOUNG LLP


Oklahoma City, Oklahoma
August 24, 1998











                 Consent of Independent Auditors


                                                       

                                                                 
We consent to the incorporation by reference in the Registration
Statement (Form S-8, No. 333-_________) pertaining to the Non-
Qualified Stock Option Agreement (James F. Damiani) of LSB
Industries, Inc. of our report dated March 16, 1998, except for the
fourth paragraph of Note 5(A), as to which the date is April 8,
1998, with respect to the consolidated financial statements and
schedule of LSB Industries, Inc. included in its Annual Report
(Form 10-K), as amended, for the year ended December 31, 1997,
filed with the Securities and Exchange Commission.




                                        /s/ Ernst & Young LLP

                                        ERNST & YOUNG LLP


Oklahoma City, Oklahoma
August 24, 1998

               NON-QUALIFIED STOCK OPTION AGREEMENT


     This Non-Qualified Stock Option Agreement ("Option Agreement")
made the 27th day of June, 1997, between LSB Industries, Inc., a
Delaware corporation, hereinafter called the "Company", and James
F. Damiani, hereinafter called "Optionee";


                       W I T N E S S E T H:

     In consideration of the mutual covenants and conditions, the
parties agree as follows:

     1.   Recitations.  The Company is presently employing the
Optionee as its employee at a Subsidiary (as defined below) of the
Company and considers it desirable and in its best interest that
Optionee be given an inducement to acquire an initial or additional
proprietary interest in the Company as an added incentive to
advance the interest of the of the Company in the form of this
option to purchase certain shares of the Company's common stock,
par value $.10 per share ("Common Stock").  The Board of Directors
of the Company has adopted and granted this option on this 27th day
of June, 1997.

     2.   Obligations.  This Option Agreement shall not impose upon
the Company or any Subsidiary of the Company any obligation to
retain Optionee as an employee at his present salary or position or
to employ Optionee in any other position with or for the Company or
any Subsidiary of the Company.  If Optionee shall leave the employ
of the Company for any reason, the option granted herein shall
immediately terminate, except as otherwise expressly provided in
Section 4 hereof.

     3.   Grant of Option and Option Price.  Subject to the terms
and conditions hereof, the Company hereby grants to Optionee as of
the close of business on this the 27th day of June, 1997, the
right, privilege and option to purchase 25,000 shares of the
Company's common stock, par value $.10, at an option price of $4.25
a share (the "Exercise Price), such Exercise Price being one
hundred percent (100%) of the Fair Market Value of the Common Stock
as determined at the close of the business on the 27th day of June,
1997.  Such option is hereinafter referred to as the "Option" and
the shares of Common Stock purchasable upon the exercise of the
Option are hereinafter sometimes referred to as the "Option
Shares".

     4.   Time of Exercise of Option.  

          (a)  As an Employee.  If this option has not been
     terminated pursuant to Section 6 hereof, subject to the terms
     and conditions contained herein, the option herein granted may
     be exercised by Optionee as hereinafter provided.  Subject to
     the terms and conditions contained herein, during the first
     two (2) years that the option granted herein is outstanding it
     may not be exercised by the Optionee with respect to any of

                                1

     the shares covered hereby; at any time after one (1) year of
     continuous employment as an employee for and on behalf of the
     Company or any Subsidiary of the Company by the Optionee from
     the date of this Option Agreement, it may be exercised by the
     Optionee as to not more than twenty percent (20%) of the total
     number of shares set forth in Section 3 hereof; at any time
     after two (2) years of continuous employment by the Optionee
     as an employee for and on behalf of the Company or a
     Subsidiary of the Company from the date of this Option
     Agreement, it may be exercised by the Optionee as to an
     additional twenty percent (20%) of the total number of shares
     set forth in Section 3 hereof; at any time after three (3)
     years of continuous employment by the Optionee as an employee
     for and on behalf of the Company or a Subsidiary of the
     Company from the date of this Option Agreement, it may be
     exercised by the Optionee as to an additional thirty percent
     (30%) of the total number of shares set forth in Section 3
     hereof; and at any time after four (4) years of continuous
     employment by the Optionee as an employee for and on behalf of
     the Company or a Subsidiary of the Company from the date of
     this Option Agreement, it may be exercised by the Optionee, in
     whole or in part, as to the remaining shares.  The right to
     exercise the option granted herein shall be cumulative.  

          (b)  As a Former Employee.  The Option granted herein may
     not be exercised after the Optionee is no longer an employee
     of the Company or any Subsidiary; except that if the Optionee
     ceases to be an employee on account of physical or mental
     disability as defined in Section 22(e)(3) of the Internal
     Revenue Code ("Former Employee"), he may exercise the Option
     within twelve (12) months after the date on which he ceased to
     be an employee, for the number of Option Shares for which he
     could have exercised at the time he ceased to be an employee. 
     In no event may the Option be exercised after the expiration
     of ten (10) years from the Date of Grant.

          (c)  In Case of Death.  If the Optionee dies prior to the
     termination of this Option, the Option may be exercised within
     one (1) year after the death of the Optionee by the personal
     representative of this estate, or by a person who acquired the
     right to exercise the Option by bequest, inheritance, or by
     reason of the death of the Optionee, provided that:

     (1)  the Optionee died while an employee of the Company or a
          Subsidiary; or

     (2)  the Optionee ceased to be an employee of the Company or
          a Subsidiary on account of physical or mental disability
          and died within three (3) months after the date on which
          he ceased to be such employee.

          The Option may be exercised only as to the number of shares
     for which the Optionee could have exercised at the time the
     Optionee died.  In no event may the Option be exercised after
     the expiration of ten (10) years from the Date of Grant.


                                2

          (d)  Acceleration and Continuous Employment.  The Board
     of Directors of the Company shall have the sole and absolute
     discretion to accelerate the time when Optionee will become
     entitled to exercise this option pursuant to the terms hereof. 
     The Board of Directors shall decide, in its sole and absolute
     discretion, to what extent leaves of absence for government or
     military service, illness, temporary disability or other
     reasons, shall not interrupt continuous employment as an
     employee for and on behalf of the Company or a Subsidiary of
     the Company, which decision shall be binding for the purpose
     of this Option Agreement.
     
     5.   Method of Exercise and Payment of Exercise Price.

          (a)  Subject to the terms and conditions hereof, the
     option granted under this Option Agreement may be exercised by
     written notice directed to the Company at its principal place
     of business setting forth the exact number of shares under
     this option that the Optionee is purchasing, which may not
     exceed the number of shares that the Optionee is eligible to
     purchase under this Option Agreement at the time of such
     purchase, and enclosing with such written notice a certified
     or cashier's check or cash, or the equivalent thereof
     acceptable to the Company, in payment of the full option price
     for the number of shares specified in such written notice and
     shall comply with such other reasonable requirements as the
     Board of Directors of the Company may establish.  Subject to
     the terms and conditions of this Option Agreement, the Company
     shall make delivery of such shares within a reasonable period
     of time after the giving of such notice; provided that if any
     law or regulation requires the Company to take any action with
     respect to the shares specified in such notice before the
     issuance thereof, then the date of delivery of such shares
     shall be extended for the period necessary to take such
     action.

          (b)  The Optionee understands that, on the exercise of
     this operation (or at the time a sale of the stock acquired by
     such exercise at a profit would not longer subject Optionee to
     suit under Section 16(b) of the Securities Exchange Act of
     1934, as amended) the excess of the fair market value of the
     common stock over it option price is taxable remuneration to
     him subject to federal income tax withholding by the Company. 
     To facilitate withholding by the Company, if required,
     Optionee hereby agrees that the exercisability of this option
     is conditional on Optionee agreeing to such arrangements and
     taking such actions as the Company determines are appropriate
     to insure that the amount required to be withheld will be
     available for payment in money by the Company as required
     withholding.

     6.   Termination of Option.  This Option Agreement and the
option granted herein, to the extent not theretofore exercised,
shall immediately terminate and become null and void upon the
earlier of the following to occur:


                                3

          (a)  At such time as the Option is no longer exercisable
     pursuant to the terms of Section 4 hereof; or 

          (b)  Termination of the Optionee for any reason
     whatsoever, with or without cause, as an employee for Climate
     Master, Inc., or another Subsidiary of the Company; or  

          (c)  On the tenth anniversary of the date of this
     Agreement; or

          (d)  Upon the Optionee's surrender to the Company for
     cancellation of this Agreement and the Option granted herein.

     7.   Restrictions.

          (a)  The Option will not be transferrable otherwise than
     by will or the laws of descent and distribution, and the
     Option may be exercised, during the lifetime of the Optionee,
     only by Optionee.  More particularly (but without limiting the
     generality of the foregoing), the Option may not be assigned,
     transferred (except as provided above), pledged, or
     hypothecated in any way, will not be assignable by operation
     of law and will not be subject to execution, attachment, or
     similar process.  Any attempted assignment, transfer, pledge,
     hypothecation, or other disposition of the Option contrary to
     the provisions hereof, and the levy of any execution,
     attachment or similar process upon the Option, will be null
     and void and without effect.

          (b)  Optionee shall have no right as a stockholder with
     respect to any shares covered by this Option Agreement until
     the date of issuance of a stock certificate to him for such
     shares.  No adjustment shall be made for dividends or other
     rights for which the record date is prior to the date such
     stock certificate is issued.

     8.   Stock Dividends, Reorganizations.  If and to the extent
that the number of issued shares of common stock of the Company
shall be increased or reduced resulting from a subdivision or
consolidation of shares or the payment of a stock dividend or any
other increase or decrease in the number of such shares of common
stock of the Company effected without receipt of consideration by
the Company, the number of shares of common stock subject to this
option and the option price therefor shall be proportionately
adjusted.

          If the Company is reorganized or consolidated or merged
with another corporation, in which the Company is the non-surviving
corporation, Optionee shall be entitled to receive options covering
shares of such reorganized, consolidated or merged company in the
same proportion as optioned under this Option Agreement to Optionee
prior to such reorganization, consolidation or merger, at an
equivalent price, and subject to the same terms and conditions as
contained herein.  For purposes of the preceding sentence, the
excess of the aggregate fair market value of the shares subject to

                                4

this option immediately after the reorganization, consolidation or
merger over the aggregate option price of such shares shall not be
more than the excess of the aggregate fair market value of all
shares subject to this option immediately before such
reorganization, consolidation or merger over the aggregate option
price of such shares, and the new option or assumption of this
option shall not give Optionee additional benefits which he did not
have under this option.

          To the extent that the foregoing adjustments and
determinations relate to the shares of common stock of the Company
and/or fair market values of such shares, such adjustments and
determinations shall be made by the Board of Directors, whose
determination in that respect shall be final, binding and
conclusive.

          Except as hereinabove expressly provided in this Section
8, the Optionee shall have no rights by reason of any subdivision
or consolidation of shares of stock of any class or the payment of
any stock dividend or any other increase or decrease in the number
of share of stock of any class or by reason of any dissolution,
liquidation, merger, consolidation or reorganization or spin-off of
assets or stock of another corporation, and any issue by the
Company of share of stock of any class, or securities convertible
into shares of stock of any class, shall not affect and no
adjustment by reason thereof shall be made with respect to the
number or price of shares subject to this option.

          The grant of this option shall not affect in any way the
right of power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business or
assets.

     9.   Compliance with Law and Approval of Regulatory Bodies.
Notwithstanding anything in this Option Agreement to the contrary,
no shares will be issued, or, in the case of treasury shares
transferred, upon exercise of the option granted hereunder, except
in compliance with all applicable Federal and State laws, rules and
regulations (including, but not limited to the Federal and State
securities laws, rules and regulations) and in compliance with
rules of stock exchanges on which the Company's shares of common
stock may be listed.  Notwithstanding anything in this Option
Agreement to the contrary, no shares will be issued, or, in the
case of treasury shares transferred, upon exercise of the option
granted hereunder, until the Company has obtain such consent or
approval from any and all regulatory bodies, Federal or State, and
such stock exchanges having jurisdiction over such matters as the
Board of Directors of the Company may deem advisable.

     10.  Binding Effect and Amendments.  This Agreement shall be
binding upon the heirs, executors, administrators and successors of
the parties hereto.  This Agreement may not be amended except in
writing signed by all of the parties hereto.


                                5

     11.  Interpretation, Other Restrictions and Legends.

          (a)  The Board of Directors of the Company shall construe
     and interpret the terms and provisions of this Option
     Agreement, which construction and interpretation, shall be
     binding and conclusive upon all parties hereto.  This Option
     Agreement shall be construed pursuant to the laws of the State
     of Delaware.

          (b)  The Optionee represents and warrants that if he
     acquires any of the shares under this Option Agreement he will
     acquire such shares for his own account and for the purpose of
     investment and not with a view to the sale or distribution
     thereof, except for sales pursuant to an effective
     registration statement under the Securities Act of 1933 (the
     "Act") or pursuant to an exemption from registration under the
     Act.  The Optionee understands that the shares of common stock
     covered by this Option Agreement have not as of the date
     hereof and may not at the time that such are purchased be
     registered under the Act (the Company being under no
     obligation to effect such registration) and that such shares
     must be held indefinitely unless a subsequent disposition
     thereof is registered under the Act or is exempt from
     registration.  The Optionee further understands that the
     exemption from registration afforded by Rule 144 under the Act
     depends upon the satisfaction of various conditions and that,
     if applicable, Rule 144 affords the basis for sale of such
     shares only in limited amounts.

          (c)  The Optionee represents, covenants, and agrees that
     he will not sell or otherwise dispose of the shares acquired
     under this Option Agreement in the absence of (i) an effective
     registration statement under the Act, (ii) an opinion
     acceptable in form and substance to the Company from
     Optionee's counsel satisfactory to the Company, or an opinion
     of counsel to the Company, to the effect that no registration
     is required for such disposition, or (iii) a "no-action"
     letter from the staff of the Securities & Exchange Commission
     ("SEC") to the effect that such a disposition takes place
     without registration.

          (d)  The certificates representing shares covered by this
     Option Agreement shall upon issuance thereof have stamped or
     imprinted thereon or affixed thereto a legend to the following
     effect:

          "The registered holder hereof has acquired the
          shares represented by this certificate for
          investment and not for resale in connection
          with a distribution thereof.  Accordingly,
          such shares have not been registered under the
          Securities Act of 1933 and may not be sold,
          transferred or otherwise disposed of except
          pursuant to a currently effective registration
          statement under said Act or otherwise in a
          transaction exempt from the provisions of
          Section 5 of said Act."


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     12.  Definitions.  For the purposes of this Option Agreement:

          (a)  The term "Subsidiary" or "Subsidiary Corporation"
     means any corporation (other than the Company) in an unbroken
     chain of corporations beginning with the Company if each of
     the corporations other than the last corporation in the
     unbroken chain own stock possessing fifty percent (50%) or
     more of the total combined voting power of all classes of
     stock in one or the other corporations in such chain.

          (b)  The term "employee" means a person who has
     contracted to perform work or services for another and to
     perform such work or services not less than forty (40) hours
     each week of the year.

     IN WITNESS WHEREOF, the parties hereunto have caused this
Agreement to be executed the day and year first above written.

                                   LSB INDUSTRIES, INC.


                                   By: /s/ Jack E. Golsen
                                      ___________________________
                                      Jack E. Golsen, President

ATTEST:

/s/ Heidi B. Shear
______________________________
               Asst. Secretary

[SEAL]

                                   "OPTIONEE"

                                   /s/ James Damiani
                                   _____________________________
                                   James Damiani



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