LXU DEF 14A
Lsb Industries, Inc. (LXU)
Selected Table of Contents
LSB INDUSTRIES, INC.
PROXY STATEMENT FOR
2025 ANNUAL MEETING OF STOCKHOLDERS
4 |
|
6 |
|
6 |
|
12 |
|
12 |
|
13 |
|
13 |
|
13 |
|
Nominees for the Class of Directors Whose Term Will Expire in 2028 |
14 |
16 |
|
Approve the LSB Industries, Inc. 2025 Long-Term Incentive Plan |
20 |
27 |
|
Advisory Vote to Approve Named Executive Officer Compensation |
29 |
30 |
|
30 |
|
30 |
|
32 |
|
32 |
|
33 |
|
34 |
|
35 |
|
38 |
|
40 |
|
40 |
|
40 |
|
42 |
|
44 |
|
44 |
|
Compensation Philosophy – How Executive Pay is Linked to Company Performance |
47 |
47 |
|
53 |
|
55 |
|
55 |
|
57 |
|
57 |
|
58 |
|
59 |
|
60 |
|
60 |
|
61 |
|
62 |
|
64 |
|
64 |
|
70 |
|
70 |
|
70 |
|
72 |
|
72 |
|
73 |
|
74 |
|
74 |
|
75 |
|
76 |
|
99 |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS:
Certain statements contained in this proxy statement may be deemed "Forward-Looking Statements" within the meaning of U.S. federal securities laws. All statements in this proxy statement other than statements of historical fact are Forward-Looking Statements that are subject to known and unknown risks, uncertainties and other factors, many of which are difficult to predict or outside of the Company’s control, which could cause actual results and performance of the Company to differ materially from those expressed in, or implied or projected by, such statements. Any such Forward-Looking Statements are not guarantees of future performance. The words "believe," "expect," "anticipate," "intend," "plan," "may," "could," and similar expressions identify Forward-Looking Statements. Forward-Looking Statements contained herein include, but are not limited to, the following: our business strategy; trends, opportunities and risks affecting our business, industry and financial results; the outlook of our chemical products and related markets; our ability to successfully leverage our existing business platform and portfolio of assets to produce low carbon products and execute our strategy to become a leader in the energy transition in the chemical industry; the development of the market and demand for low-carbon ammonia; the costs of compliance with environmental laws, health laws, and security regulations; the anticipated cost and timing of our capital projects; changes in domestic fertilizer production; and the outlook for the industrial and agricultural industries.
While we believe the expectations reflected in such Forward-Looking Statements are reasonable, we can give no assurance such expectations will prove to have been correct. There are a variety of factors which could cause future outcomes to differ materially from those described in this proxy statement, including those identified under the heading "Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2025 and in any subsequent filings with the SEC. We caution investors, potential investors, and others not to place considerable reliance on the forward-looking statements contained in this proxy statement. You are encouraged to read our filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements in this proxy statement speak only as of the date of this proxy statement, and we do not undertake any obligation to publicly update or revise our Forward-Looking Statements, even if experience or future changes make it clear that any projected results expressed or implied in such statements will not be realized.
Information appearing on https://investors.lsbindustries.com/ is not part of and is not incorporated by reference in this proxy statement.
Notice of Annual Meeting of Stockholders
To Be Held May 15, 2025
LSB INDUSTRIES, INC.
Virtual Meeting Only
Please register at www.proxydocs.com/LXU
To the Stockholders of LSB Industries, Inc.
The 2025 Annual Meeting of the Stockholders (the "Annual Meeting") of LSB Industries, Inc. (the "Company") will be held in a virtual only format. You will not be able to attend the Annual Meeting in person. Registration is required online at www.proxydocs.com/LXU. The purpose of the Annual Meeting is the consideration of and voting on the following matters:
BENEFITS OF A VIRTUAL ANNUAL MEETING
The Annual Meeting will be held in a virtual-only meeting format, via live webcast that will provide stockholders with the ability to participate in the Annual Meeting, vote their shares and ask questions. We believe a virtual-only meeting format facilitates stockholder attendance and participation by enabling all stockholders to participate fully and equally, and without cost, using an Internet-connected device from any location around the world. In addition, the virtual-only meeting format increases our ability to engage with all stockholders, regardless of size, resources or physical location.
ATTENDANCE AT THE VIRTUAL ANNUAL MEETING
Only stockholders of record and beneficial owners of shares of our common stock as of the close of business on March 24, 2025, the record date, may attend and participate in the Annual Meeting, including voting and asking questions during the virtual Annual Meeting. You will not be able to attend the Annual Meeting physically in person.
In order to virtually attend the Annual Meeting, you must register at www.proxydocs.com/LXU. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you access to the Annual Meeting and to vote and submit questions during the Annual Meeting.
As part of the registration process, you must enter the control number located on your proxy card or voting instruction form. If you are a beneficial owner of shares registered in the name of a broker, bank or other nominee, you will also need to provide the registered name on your account and the name of your broker, bank or other nominee as part of the registration process. On the day of the Annual Meeting, May 15, 2025, stockholders may begin to log in to the virtual-only Annual Meeting 15 minutes prior to the Annual Meeting. The Annual Meeting will begin promptly at 8:30 AM CDT.
We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting. If you encounter any difficulties accessing the virtual-only Annual Meeting platform, including any difficulties voting or submitting questions, you may call the technical support number that will be posted in your instructional email.
QUESTIONS AT THE VIRTUAL ANNUAL MEETING
Our virtual Annual Meeting will allow stockholders to submit questions before and during the Annual Meeting through the online portal. We will respond to appropriate questions submitted by stockholders within five days following the Annual Meeting.
|
|
LSB Industries, Inc. Proxy Statement 4 |
We will review stockholder-submitted questions and all questions will be answered following the meeting, with the exception of any questions that are irrelevant to the purpose of the Annual Meeting or our business, or that contain inappropriate or derogatory references which are not in good taste.
|
YOUR VOTE IS IMPORTANT
You are urged to vote your shares by promptly marking, signing, dating and returning the proxy card or, in the alternative, by voting your shares electronically either over the Internet or by touch tone telephone. Please see "Questions and Answers – How Do I Cast My Vote?" located on page 8 in this Proxy Statement for further information and instructions.
HOW TO VOTE: |
|
|
|
BY TELEPHONE Call the telephone number on your proxy card |
|
|
|
|
VIA THE INTERNET Visit the website listed on your proxy card |
|
|
|
BY MAIL Sign, date and return your proxy card in the enclosed envelope |
|
|
|
VIRTUAL Attend the 2025 Annual Meeting of Stockholders via live video webcast |
|
|
|
|
|
Instructions are also included on the proxy card.
|
By order of the Board of Directors, |
|
|
|
|
|
Michael J. Foster |
Oklahoma City, Oklahoma |
Executive Vice President, |
April 15, 2025 |
Secretary and General Counsel |
IMPORTANT NOTICE REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 15, 2025.
This Notice of Annual Meeting of Stockholders (this "Notice") and related proxy materials are being distributed or made available to stockholders beginning on or about April 15, 2025. This Notice includes instructions on how to access these materials (including the Proxy Statement for the Annual Meeting, along with the LSB 2024 Annual Report) via the Internet at www.proxydocs.com/LXU.
|
|
LSB Industries, Inc. Proxy Statement 5 |
LSB INDUSTRIES, INC.
3503 NW 63rd Street, Suite 500
Oklahoma City, Oklahoma 73116
PROXY STATEMENT FOR
2025 ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 15, 2025
|
Solicitation of Proxies
This Proxy Statement is furnished in connection with the solicitation on behalf of the Board of Directors (the "Board") of LSB Industries, Inc. ("LSB," the "Company," "us," "our," or "we") for proxies to be voted at our Annual Meeting of Stockholders (the "Annual Meeting") to be held on May 15, 2025, at 8:30 AM CDT in virtual-only meeting format via live video webcast and at any postponement or adjournment thereof. The Notice of the Annual Meeting of Stockholders and related proxy materials are being distributed or made available to stockholders beginning on or about April 15, 2025.
|
Questions and Answers About the Annual Meeting
What matters are being considered?
You will be voting on each of the following items of business:
The Board recommends a vote "FOR" each of the director nominees in Proposal No. 1
and a vote "FOR" each of Proposal Nos. 2, 3, and 4.
What is a proxy?
A proxy is your legal appointment of another person to vote the shares that you own in accordance with your instructions. The person you appoint to vote your shares is also called a proxy. On the enclosed proxy card, you will find the names of the persons designated by the Company to act as proxies to vote your shares at the Annual Meeting. The designated proxies are required to vote your shares in the manner you instruct.
Will other matters be brought before the Annual Meeting?
The Board does not intend to bring any other matters before the Annual Meeting and does not expect any other items of business because the deadline for stockholder proposals and nominations has already passed. However, if any other matter is properly brought before the Annual Meeting, the accompanying proxy gives discretionary authority to the persons named in the proxy with respect to any other matters that might be brought before the Annual Meeting. Those named persons intend to vote that proxy in accordance with their best judgment on such matter.
|
|
LSB Industries, Inc. Proxy Statement 6 |
Who is entitled to vote at the Annual Meeting?
You or your proxy may vote if you owned voting stock as of the close of business on March 24, 2025, which is the record date for determining who is eligible to vote at the Annual Meeting.
As of the close of business on the record date, we had 71,876,502 shares of common stock and no voting preferred stock issued and outstanding which were eligible to be voted.
Each share of common stock entitles its holder to one vote.
What constitutes a quorum?
In order to conduct the Annual Meeting, we must have a quorum. Holders of record of a majority of the total of all of the outstanding shares of common stock issued and outstanding, and entitled to vote thereat, present in person, or represented by proxy, will constitute a quorum for the Annual Meeting.
If a quorum is not present or represented at the Annual Meeting, the holders of record, present in person or represented by proxy, at the Annual Meeting have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until the requisite amount of voting stock is present. For the purposes of this virtual Annual Meeting, presence "in person" is satisfied by attending the virtual meeting online by following the instructions included in your Notice.
What vote is required to approve the items under consideration?
Are abstentions counted?
Abstentions occur when stockholders are present virtually or by proxy at the Annual Meeting but fail to vote or voluntarily withhold their vote for any of the matters upon which the stockholders are voting. If your proxy indicates an abstention from voting on the proposal, the shares represented will be counted as present for the purpose of determining a quorum, but they will not be voted on any matter at the Annual Meeting. If you abstain from voting, you have not cast a vote and the abstention will not be counted in determining the outcome of the proposals.
|
|
LSB Industries, Inc. Proxy Statement 7 |
How do I cast my vote?
Registered Holders. If shares are registered in your name, you may vote those shares at the Annual Meeting or by proxy. If you decide to vote by proxy, you may do so in any one of the following ways.
By Telephone. After reading the proxy materials, you may call the toll-free number (866) 286 - 3181, using a touch-tone telephone. You will be prompted to enter your Control Number, which you can find on your proxy card or voting instruction form. This number will identify you and the Company. You can then follow the simple instructions that will be given to you to record your vote. |
|
|
|
Via the Internet. After reading the proxy materials, you may use a computer to access the website www.proxydocs.com/LXU. You will be prompted to enter your Control Number, which you can find on your proxy card or voting instruction form. This number will identify you and the Company. You can then follow the simple instructions that will be given to you to record your vote. |
|
|
|
By Mail. After reading the proxy materials, you may vote your shares by marking, signing, dating and returning your proxy card in the envelope provided. To best ensure timely receipt of your proxy, you are encouraged to mail your proxy card for arrival by May 12, 2025. |
|
|
|
Virtually. After reading the proxy materials, you may vote your shares by attending the 2025 Annual Meeting of Stockholders via live video webcast. You can then follow the simple instructions that will be given to you to record your vote. |
The Internet and telephone voting procedures have been set up for your convenience and have been designed to authenticate your identity, allow you to give voting instructions and confirm that those instructions have been recorded properly.
Whether you choose to vote by telephone, over the Internet or by mail, you can specify whether your shares should be voted "for," "against" or "abstain" for each of the director nominees. You can also specify whether you want to vote "for" or "against" or "abstain" from voting on:
Beneficial Owner. If your stock is held in your brokerage account, also known as "street name," you should instruct your broker how your shares should be voted. If you fail to give your broker instructions, in some cases but not others the broker may submit a "broker non-vote," which is explained below.
If you are a beneficial owner whose shares are held of record directly in your name by a broker, you will receive instructions from the broker describing how to direct the voting of or vote your shares. If you do not instruct your broker how to vote your shares, it may vote your shares as it decides with respect to any matter for which it has discretionary authority under the rules of the New York Stock Exchange ("NYSE").
There are also non-routine matters for which your broker does not have discretionary authority to vote unless it receives timely instructions from you. A "broker non-vote" results when a broker does not have discretion to vote on a particular matter, you have not given timely instructions on how the broker should vote your shares and the broker indicates it does not have authority to vote such shares on its proxy. Although broker non-votes will be counted as present at the Annual Meeting for purposes of determining a quorum, they will be treated as shares not entitled to vote on the proposal. Under the current NYSE rules, we believe Proposal No. 3 (ratification of the appointment of the independent registered public accounting firm) is a routine matter. Accordingly, if your broker holds shares that you own in street name, the broker may vote your shares on Proposal No. 3 even if the broker does not receive instructions from you. Proposal Nos. 1, 2, and 4 are considered to be "non-routine" under NYSE rules such that your broker, bank or other agent may not vote your shares on those proposals in the absence of your voting instructions.
If your shares are held in street name and you do not give voting instructions, the broker will only be entitled to vote your shares in its discretion with respect to the proposed ratification of the appointment of our
|
|
LSB Industries, Inc. Proxy Statement 8 |
independent registered public accounting firm. Without voting instructions from you, the record holder will not be permitted to vote your shares with respect to the election of directors, the approval of the LSB Industries, Inc. 2025 Long-Term Incentive Plan or the advisory vote on executive compensation. Your shares would therefore be considered broker non-votes with respect to these proposals and would have no effect on the outcome of the proposal. Accordingly, it is important for you to instruct your broker how you wish to vote your shares.
Can I change my mind after I vote?
Yes, you may change your mind at any time before the polls close at the Annual Meeting, which will be at 8:30 AM CDT on May 15, 2025. If you hold your shares directly in record name, you can change your vote by:
In the absence of a revocation, shares represented by the proxies will be voted at the Annual Meeting. Your attendance at the Annual Meeting will not automatically revoke your proxy. If you do not hold your shares directly, you should follow the instructions provided by your broker, bank or nominee to revoke your previously voted proxy.
What if I sign and return my proxy card but I do not include voting instructions?
If you properly complete and submit a proxy card, but do not indicate any contrary voting instructions, your shares will be voted as follows:
If any other business comes before the stockholders for a vote at the Annual Meeting, your shares will be voted in accordance with the discretion of the holders of the proxy. The Board knows of no matters, other than those previously stated, to be presented for consideration at the Annual Meeting.
What does it mean if I receive more than one proxy card?
It means that you have multiple accounts with brokers and/or our transfer agent. Please vote all of these shares. We recommend that you contact your broker and/or our transfer agent to consolidate as many accounts as possible under the same name and address. Our transfer agent is Computershare Trust Company, N.A., 462 South 4th Street, Suite 1600, Louisville, KY 77845, (800) 736-3001 (U.S. and Canada) and (781) 575-3100 (outside U.S. and Canada).
|
|
LSB Industries, Inc. Proxy Statement 9 |
Will my shares be voted if I do not provide my proxy?
If your shares are registered in your name, they will not be voted unless you submit your proxy or vote at the Annual Meeting. As discussed above, if your shares are held in street name and you do not give voting instructions, the broker will only be entitled to vote your shares in its discretion with respect to the ratification of the appointment of our independent registered public accounting firm.
Who will count the votes?
All votes will be tabulated by Mediant, a BetaNXT business, who will serve as the inspector of election for the Annual Meeting.
What is the deadline for submission of stockholder proposals for the 2026 Annual Meeting?
If you wish to submit proposals to be included in our proxy statement for our 2026 Annual Meeting, proposals must be received at our principal executive offices in writing not later than December 16, 2025 and should be addressed to our Corporate Secretary, LSB Industries, Inc., 3503 NW 63rd Street, Suite 500, Oklahoma City, Oklahoma 73116.
If you wish to present a proposal, but you fail to notify us by such deadline, you will not be entitled to present the proposal at the 2026 Annual Meeting.
For more information regarding stockholder proposals, please see "Stockholder Proposals" below.
Who is soliciting proxies?
We will pay for preparing, printing and mailing this Proxy Statement. Proxies may be solicited on our behalf by our directors, officers or employees, without additional consideration, by telephone, electronic transmission and facsimile transmission. We will reimburse banks, brokers and other custodians, nominees and fiduciaries for their out-of-pocket costs of sending the proxy materials to our beneficial stockholders.
Stockholder List
A list of stockholders entitled to vote at the Annual Meeting will be open for examination by any stockholder for any purpose relevant to the Annual Meeting during ordinary business hours during the 10 days before the Annual Meeting and ending on the day before the Annual Meeting date. The list will be maintained at our principal executive offices located at 3503 NW 63rd Street, Suite 500, Oklahoma City, Oklahoma 73116.
|
|
LSB Industries, Inc. Proxy Statement 10 |
Core Values
We seek to maximize the long-term value of the Company for our stockholders, customers, employees, communities, suppliers, and the broader environment. Every decision we make is framed and guided by our core values. We seek ways to ensure the long-term sustainability of our business, including making a lasting positive impact on society and our environment. LSB and its employees are committed to upholding these values to drive our culture and frame how we conduct business and engage with our stakeholders.
Sustainability
LSB Industries promotes corporate sustainability by formulating and implementing business strategies and practices that aim to create value and have a positive impact on our world.
Sustainability Goals
In 2022, we created a Sustainability Roadmap and in early 2023, we announced our Sustainability Goals. We followed that up by releasing our inaugural Sustainability Report for 2022. In 2024, we moved our Sustainability Report online with the release of our 2023 sustainability updates.
These can be found at https://lsbindustries.com/sustainability/. In our Sustainability Report, we provide transparency into our performance in light of our core values and the strategies and actions to make a lasting positive impact on the world around us.
|
|
LSB Industries, Inc. Proxy Statement 11 |
Code of Conduct
A high standard of ethical business conduct is the responsibility of each individual LSB employee, officer and director. Our good name and reputation in the marketplace, ultimately depend on the way we conduct our business and the way the public perceives that conduct. All employees are required to review our Statement of Policy Concerning Business Conduct (the "Code of Conduct") on an annual basis and whenever updated. Employees are likewise required to review and comply with the company’s Employee Handbook. These documents address important governance topics, including our insider trading policy and other compliance policies. In addition, in November 2023, we adopted an Anti-Bribery and Corruption Policy, which applies worldwide to LSB and all its directors, officers, employees, contractors and agents.
Learn more at https://investors.lsbindustries.com/corporate-governance/documents-charters.
Proxy Voting Roadmap
The Annual Meeting
Below is a summary of certain information included in this Proxy Statement. Please review the entire Proxy Statement before you vote.
|
|
Time and Date: |
|
8:30 AM, Central Daylight Time ("CDT"), on May 15, 2025 |
Place: |
|
Virtual Meeting Only Registration is required at www.proxydocs.com/LXU |
||
Record Date: |
|
March 24, 2025 |
Matters For Stockholder Vote
|
Proposal |
Board Recommendation |
Page |
|
(1) Election of three nominees to our Board of Directors |
"FOR" each nominee |
13 |
|
(2) Approval of the LSB Industries, Inc. 2025 Long-Term Incentive Plan |
"FOR" |
20 |
|
(3) Ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025 |
"FOR" |
27 |
|
(4) Advisory vote to approve named executive officer compensation |
"FOR" |
29 |
The Annual Meeting will be held in virtual-only meeting format via live video webcast.
In order to virtually attend the Annual Meeting, you must register at www.proxydocs.com/LXU.
You may vote at the meeting if you were a holder of record of our common stock at the close of business on March 24, 2025. Please see page 8 for instructions on how to vote your shares.
|
|
LSB Industries, Inc. Proxy Statement 12 |
Proposal 1 |
Election of Directors |
General
Our Restated Certificate of Incorporation, as amended, and Second Amended and Restated Bylaws, as amended (the "Bylaws"), provide for the division of the Board into three classes, with each class consisting as nearly as possible of one-third of the whole. The term of office of one class of directors expires each year; with each class of directors elected for a term of three years and until the stockholders elect their qualified successors.
Mark T. Behrman, Riccardo Bertocco, Jonathan S. Bobb and Richard S. Sanders, Jr. are the class of directors whose terms expire at the Annual Meeting. On April 9, 2025, Mr. Sanders notified the Board that he will not stand for reelection at the Annual Meeting. Mr. Sanders will continue to serve as director until the Annual Meeting. Our Board has nominated, and stockholders are being asked to reelect, Mr. Behrman, Mr. Bertocco and Mr. Bobb for a three year term expiring at our 2028 annual meeting of stockholders. If elected, the nominees will each hold office until the conclusion of our 2028 annual meeting of stockholders and a successor is duly elected and qualified or until earlier death, resignation, or removal. Eeffective immediately upon the expiration of Mr. Sanders’ director term at the Annual Meeting, the size of the Board will be reduced to nine directors.
Agreements as to Certain Directors and Committees
Board Representation and Standstill Agreement
On December 4, 2015, the Company entered into the Board Representation and Standstill Agreement (the "Board Representation and Standstill Agreement"), by and among the Company, LSB Funding LLC ("LSB Funding"), Security Benefit Corporation ("Security Benefit"), Todd Boehly, Jack E. Golsen ("J. Golsen"), Steven J. Golsen ("S. Golsen"), Barry H. Golsen ("B. Golsen"), Linda Golsen Rappaport ("L. Rappaport"), Golsen Family LLC, an Oklahoma limited liability company ("Family LLC"), SBL LLC, an Oklahoma limited liability company ("SBL LLC"), and Golsen Petroleum Corp., an Oklahoma corporation ("GPC," and together with Messrs. J. Golsen, S. Golsen and B. Golsen, Ms. L. Rappaport, Family LLC, SBL LLC, each a "Golsen Holder" and, collectively, the "Golsen Holders"). On October 26, 2017, October 18, 2018, and September 27, 2021 the parties to the Board Representation and Standstill Agreement entered into amendments thereto, and on August 10, 2022, SBT Investors LLC ("SBT Investors") and each of the parties to the Board Representation and Standstill Agreement entered into a letter agreement that, among other things, transferred certain rights of LSB Funding to SBT Investors and further amended the Board Representation and Standstill Agreement (collectively, the "Amendments"). On November 14, 2023, the Company entered into a Joinder Agreement (the "Joinder Agreement") to the Board Representation and Standstill Agreement with TLB-LSB, LLC that transferred certain rights of SBT Investors to TLB-LSB, LLC. The Board Representation and Standstill Agreement, the Amendments and the Joinder Agreement are collectively referred to as the "Amended Board Representation and Standstill Agreement".
TLB-LSB, LLC Designees
Pursuant to the Amended Board Representation and Standstill Agreement and based upon the equity holdings of TLB-LSB, LLC and the size of the Company’s Board, the Company has agreed to permit TLB- LSB, LLC to designate up to three nominees to the Board, at least one of which is required to satisfy NYSE standards of independence. Jonathan S. Bobb and Kanna Kitamura are the current TLB-LSB, LLC designees.
Golsen Designees
Under the Amended Board Representation and Standstill Agreement and based upon the Golsen Holders’ equity holdings, the Golsen Holders, collectively, have the right to designate two directors. Messrs. Barry H. Golsen and Steven L. Packebush are the current Golsen designees.
|
|
LSB Industries, Inc. Proxy Statement 13 |
Other Governance Matters
Our Bylaws provide that the Board may change the total number of directors on our Board from time to time provided that the minimum number of directors is 3 and the maximum is 14. Currently there are 10 directors on our Board.
As discussed under "Corporate Governance — Nominating and Corporate Governance Committee," our Nominating and Corporate Governance Committee (the "Nominating Committee") reviews the composition of the Board as part of its assessment of the Board’s performance and effectiveness. The Nominating Committee values certain characteristics in all Board members, including personal and professional integrity, reputation, outstanding professional achievement, and sound business judgment. The Nominating Committee evaluates each individual director in the context of the Board as a whole with the goal of recommending an effective group with a diversity of experience and skills that exercises sound business judgment in the interest of our business and our stockholders. Consistent with their responsibilities, members of the Nominating Committee have interviewed and evaluated each of the current nominees for director and the Nominating Committee has determined that each is highly qualified to serve as a member of our Board.
The following sets forth certain information regarding the director nominees and other directors whose term will continue after the Annual Meeting.
Nominees for the Class of Directors Whose Term Will Expire in 2028
MARK T. BEHRMAN |
Mark T. Behrman, age 62, was appointed Chairman of the Board in August 2024. He previously has served as President, CEO and board member of the Company since December 2018. His term as a director will expire at the Annual Meeting. Prior to that, Mr. Behrman served as Executive Vice President, Chief Financial Officer from June 2015 through December 2018. Mr. Behrman joined LSB in 2014 as Senior Vice President of Corporate Development. Prior to joining LSB, Mr. Behrman was Managing Director, Head of Investment Banking and Head of the Industrial and Energy Practices of Sterne Agee, Inc., from 2007 to 2014. Mr. Behrman has over 35 years of operational, financial, executive management, and investment banking experience. Mr. Behrman is currently Non-Executive Chairman of the Board of PHX Minerals, Inc. and has served on that board since 2017. He is also a member of its Audit and Compensation Committees. Mr. Behrman has also been a Director of The Fertilizer Institute since 2019. Mr. Behrman previously served on the boards of directors of the following publicly held companies: Noble International Ltd. (a supplier to the automotive industry) from 1998 to 2007, where he also served as Audit Committee Chairman from 1998 to 2003; Oakmont Acquisition Corporation (a special purpose acquisition corporation) from 2005 to 2007; and Robocom Systems International (a developer and marketer of advanced warehouse management software solutions) from 1998 to 2000. Mr. Behrman holds an MBA in Finance from Hofstra University and a Bachelor of Science in Accounting, Minor in Finance from Binghamton University. Mr. Behrman’s extensive industry leadership and financial experience, among other factors, led the Board to determine that he should continue to serve as a director. |
|
|
Age: 62 Director since: 2018
Committees: None
|
|
|
|
|
LSB Industries, Inc. Proxy Statement 14 |
RICCARDO BERTOCCO |
Riccardo Bertocco, age 57, has been a director since April 9, 2025. His term expires at the Annual Meeting. Mr. Bertocco most recently served as Managing Director and Partner at Boston Consulting Group from 2018 to 2023, where he led the Power and Utilities sector, with a focus on Energy Transition, Low Carbon Fuels and Renewables. Prior to joining Boston Consulting Group, Mr. Bertocco served as a Director at Bain & Company from 1998 to 2018 and as a Vice President from 1999 to 2001, working with clients in the oil and gas sector throughout Europe and the Americas. Mr. Bertocco has worked extensively in management consulting for more than 25 years, partnering with senior executives and management teams within a number of sectors including oil and gas, utilities, IT/technology, private equity, infrastructures and education. In this capacity, he focused on his clients’ most pressing strategic issues, including energy transition, large scale transformations, growth strategy, operational optimization, organizational redesign and change management and digital transformations, among others. Mr. Bertocco holds a B.S. in Business Administration from Bocconi University in Milan, Italy and an M.B.A. in Corporate Finance and Entrepreneurial Management from The Wharton School of the University of Pennsylvania. He is the author of several papers on the evolution of midstream infrastructure in the U.S., decarbonization pathways for U.S. states and corporations. Mr. Bertocco’s extensive industry and leadership experience, among other factors, led the Board to determine that he should continue to serve as a director. |
Age: 57 Director since: 2025
|
|
|
JONATHAN S. BOBB
|
Jonathan S. Bobb, age 49, has been a director of the Company since 2015. His term expires at the Annual Meeting. Mr. Bobb is a Senior Director on the investment team at Eldridge Capital Management. Mr. Bobb previously served in a similar capacity at Guggenheim Partners. Prior to joining Guggenheim, Mr. Bobb was in the investment banking division at Goldman Sachs & Co. from 2007 to 2013. His previous business experience includes investment banking positions with J.P. Morgan and Deutsche Bank and financial planning roles at Gap Inc. Mr. Bobb serves as a TLB-LSB Designee under the terms of the Amended Board Representation and Standstill Agreement. (see page 13). Mr. Bobb received a B.A. in Economics from Stanford University and an M.B.A. from the University of Michigan. Mr. Bobb’s extensive leadership and financial experience, among other factors, led the Board to determine that he should continue to serve as a director. |
Age: 49 Director since: 2015
Committees: Audit
|
|
|
|
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE THREE NOMINEES AS DIRECTORS OF THE COMPANY |
|
|
LSB Industries, Inc. Proxy Statement 15 |
Continuing Directors
The following six directors will continue in office until the expiration of their respective terms and until their successors have been elected and qualified. Mr. Sanders will not stand for reelection at the Annual Meeting and, effective immediately upon the expiration of his director term at the Annual Meeting, the size of the Board will be reduced to nine directors.
JOHN D. CHANDLER |
John D. Chandler, age 55, has been a director of the Company since November 2024. His current term expires in 2027. Mr. Chandler retired from The Williams Companies, Inc. (“Williams”) on March 31, 2022. Prior to his retirement, Mr. Chandler was appointed as Senior Vice President and Chief Financial Officer for Williams in 2017. From 2009 until his retirement in March 2014, Mr. Chandler served as Senior Vice President and Chief Financial Officer of Magellan GP, LLC, the general partner of Magellan Midstream Partners, LP. (NYSE: MMP) From 2003 until 2009, he served in the same capacities for the general partner of Magellan Midstream Holdings, L.P. From 1999 to 2002, Mr. Chandler was Director of Financial Planning and Analysis and Director of Strategic Development for a subsidiary of Williams. From 1992 to 1999, Mr. Chandler held various accounting and finance positions with MAPCO Inc. Mr. Chandler currently serves as an independent director and Chairman for Matrix Services Company (NASDAQ: MTRX) where he has been on the board since 2017. He also held board seats at Williams Partners (NYSE: WPZ), Green Plains Partners (NASDAQ: GPP), Cone Midstream Partners (NYSE: CNNX) and USA Compression Partners (NYSE: USAC) between 2013 and 2017. Mr. Chandler received his B.S. and B.A. in accounting and finance from the University of Tulsa and is a certified public accountant. Mr. Chandler’s extensive financial, industry and leadership experience, among other factors, led the Board to determine that he should serve as a director.
|
Age: 55 Director since: 2024
Committees: Audit (Chair)
|
|
|
|
BARRY H. GOLSEN, J.D. |
Barry H. Golsen, J.D., age 74, has been a director of the Company since 1981. His current term expires in 2027. Mr. Golsen is President of GOL Capital LLC. He served as the Vice-Chairman of the Board of the Company from 1993 until 2015. He also served as the Company’s President and Chief Executive Officer from January 2015 until September 2015 and as the Company’s President and Chief Operating Officer from 2004 to 2014. Mr. Golsen joined LSB in 1978 and spearheaded the growth of LSB’s Climate Control Business with the development of innovative and climate-friendly products, a number of business startups, the acquisition of Climate Master, Inc. and its merger with LSB’s CHP Corporation. Under his leadership, LSB’s Climate Control Business attained substantial growth and leading U.S. market shares for its key products. Mr. Golsen attended Cornell University College of Engineering prior to earning both his B.A. and J.D. degrees from the University of Oklahoma. He was admitted to the Oklahoma Bar in 1978. Mr. Golsen is a past Director of the Oklahoma City Branch of the Federal Reserve Bank of Kansas City and served on the Board of Directors of Equity Bank for Savings N.A. His professional affiliations have included the Oklahoma Bar Association, the American Bar Association, the American Society of Heating, Refrigeration and Air-Conditioning Engineers, Young Presidents Organization and World Presidents Organization. Mr. Golsen is a National Association of Corporate Directors ("NACD") Board Leadership Fellow. NACD Fellowship is a comprehensive and continuous program of study that empowers directors with the latest insight, intelligence and boardroom practices. Mr. Golsen’s extensive experience and his in-depth of knowledge and understanding of the businesses in which we operate, and his demonstrated leadership skills within the Company, among other factors, led the Board to |
Age: 74 Director since: 1981
Committees: Audit Nominating and Corporate Governance
|
|
|
|
|
LSB Industries, Inc. Proxy Statement 16 |
|
conclude that he should serve as a director. Mr. Golsen is a Golsen designee under the terms of the Amended Board Representation and Standstill Agreement (see page 13). |
KANNA KITAMURA
|
Kanna Kitamura, age 52, has been a director of the Company since December 2018. Her current term expires in 2027. Ms. Kitamura is a Partner and Chief Talent Officer at Eldridge Industries. Previously, Ms. Kitamura was a Vice President and Head of Legal Operations at Guggenheim Investments. She was a member of Guggenheim Partners’ Women’s Innovation and Inclusion Network, Secretary of the Pro Bono Committee, and acted as a mentor in its Veterans Transition Assistance Program. Prior to Guggenheim, Ms. Kitamura was a Vice President of Business Development and Director of Operations for a management consulting firm and was employed by the United Nations Development Programme in the Division of Public Affairs. Ms. Kitamura supports a number of non-profit organizations focused on education, the arts, and conservation. Ms. Kitamura received her B.S. from Georgetown University and her J.D. from Brooklyn Law School. Ms. Kitamura’s extensive financial industry leadership and legal experience, among other factors, led the Board to determine that she should serve as a director. Ms. Kitamura is a TLB-LSB designee under the terms of the Amended Board Representation and Standstill Agreement (see page 13). |
Age: 52 Director since: 2018
Committees: Compensation Nominating and Corporate Governance
|
|
|
|
STEVEN L. PACKEBUSH |
Steven L. Packebush, age 60, has been a director of the Company since 2020. His term expires in 2026. Mr. Packebush is a founder and partner in Elevar Partners, LLC, a company providing advisory and consulting services and capital solutions for companies in the agriculture and energy markets. Prior to Elevar Partners, Mr. Packebush worked at Koch Industries, Inc. for over 30 years, retiring in March 2018. Until his retirement, he was the president of Koch Ag & Energy Solutions ("Koch Ag"). Under Mr. Packebush’s leadership, Koch Ag grew from a break-even business to one of the larger business units at Koch Industries and one of world’s largest fertilizer companies. Mr. Packebush also oversaw the expansion of Koch Ag to include three additional start-up businesses: Koch Energy Services became one of the largest natural gas marketing companies in North America; Koch Methanol supplied methanol to global customers in the plywood, carpet, fuels, and plastics markets; and Koch Agronomic Services became one of world’s largest enhanced-efficiency fertilizer producers and marketers. Prior to his time at Koch Ag, Mr. Packebush held various business development and commercial roles in Koch International, Koch Agriculture, and Koch Minerals. Mr. Packebush serves as a Golsen Designee under the terms of the Amended Board Representation and Standstill Agreement. (see page 13). Mr. Packebush currently serves on the PHX Minerals, Inc. Board of Directors, Kansas State University Dean’s Agriculture Advisory Board, and the Wichita Metropolitan YMCA and YMCA360 Board of Directors. Previously he served on the board of directors of Monolith Materials Inc., EuroChem Group AG, Caribbean Nitrogen, Nitrogen 2000, KOCHPAC, and The Fertilizer Institute. He has also |
Age: 60 Director since: 2020
Committees: Audit Nominating and Corporate Governance
|
|
|
|
|
LSB Industries, Inc. Proxy Statement 17 |
|
served on The Fertilizer Institute’s executive committee and Koch Industries’ Compliance and Ethics Executive Committees. Mr. Packebush is a 1987 graduate of Kansas State University with a bachelor’s degree in agricultural economics. Mr. Packebush’s extensive industry and leadership experience, among other factors, led the Board to determine that he should serve as a director. |
DIANA M. PENINGER |
Diana M. Peninger, age 60, has been a director of the Company since 2020. Her term expires in 2026. Since 2021, Ms. Peninger, has served as the President and CEO of Reproductive Solutions, a medical device company located in Dallas, TX. She founded and has served as CEO of Geneva Lake Partners LLC since 2017 which is an advisory firm that works with middle market private industrial companies to help them develop strategic plans to accelerate their growth. She has served on the board of Rogers Group, Inc. since July 2017, chairs the compensation committee and is a member of the audit committee. She served four years as the Board Vice-Chair of the Committee of 200 which is a non-profit organization of the world’s most successful women CEOs and senior business executives. Ms. Peninger spent 30 years in the chemical industry including three expat assignments in Frankfurt, Germany. In 2018, she served as interim CEO for Synata Bio a renewable clean fuels and chemicals technology company owned by True North Venture Partners. From 2007 through 2016, she held various roles within Celanese Corporation including, Vice President, Acetyl Intermediates, EVA Performance Polymers and Vice President General Manager for Nutrinova Specialty Food Ingredients business. Prior to this, as Director of Corporate Strategy and Business Development at Celanese, she lead the business development initiatives to establish manufacturing locations in low cost regions of China and Middle East. From 2005 to 2007, while at Chemtura Corp., Ms. Peninger served as Vice President, Consumer Products and Vice President, PVC Additives businesses. She started her career in 1987 with Celanese Corporation in Pampa, Texas as a plant operations engineer before taking on progressively more responsibility including Director of Global Glass Fibers business and leading the integration of several large acquisitions. Ms. Peninger holds a B.S. in Chemical Engineering from South Dakota School of Mines and was honored in 2017 with the prestigious "Distinguished Alumni" award for achievement of excellence in their careers and their communities. She is a National Association of Corporate Directors (NACD) Board Leadership Fellow, serves on the NACD North Texas Board and serves on the University Advisory Board for her alma mater. Ms. Peninger’s extensive industry and leadership experience, among other factors, led the Board to determine that she should serve as a director. |
Age: 60 Director since: 2020
Committees: Audit Compensation
|
|
|
|
|
|
|
|
|
|
LSB Industries, Inc. Proxy Statement 18 |
LYNN F. WHITE |
Lynn F. White, age 72, has been a director of the Company since 2015. His term expires in 2026. Mr. White founded and has served as the Managing Director of Twemlow Group LLC since 2013, and previously from 2008 until 2009. Twemlow Group LLC is a consulting firm that provides strategic, organizational and product development counsel to agriculturally related businesses. From January to June 2023, Mr. White served as interim President and CEO of Anuvia Plant Nutrients, Inc. where he had served as a director since February 2021 and previously from January 2016 to November 2019. From 2009 to 2013, Mr. White served as Vice President, Corporate Development of CF Industries Holdings, Inc. (NYSE: CF). While at CF Industries, he was responsible for external growth initiatives, including M&A and organic efforts, new product development and strategy, and led the integration of the $4.6 billion acquisition of Terra Industries, Inc. While at CF Industries he served as non-executive Chairman or Vice-Chairman of GrowHow UK Limited, the leading British nitrogen fertilizer producer and as a director of KEYTRADE AG, a major Swiss based fertilizer trading firm. Prior to that, he was the President of John Deere Agri Services, Inc., a subsidiary of Deere & Co. (NYSE:DE), where he was responsible for leading a new global business unit created to pursue growth opportunities in technology-based services for industries linked to agriculture. Mr. White was also Vice President of Global AgServices of Deere, where he was responsible for identifying, testing, and developing new services for agriculture and food. Prior to that, he was Senior Vice President, Corporate Development of IMC Global Inc. (n/k/a The Mosaic Company), a producer of crop nutrients and salt, and served in various executive positions, including General Manager of the Food Ingredients Division, Director of the Flame Retardants & Fluids Business and Europe, Middle East, Africa Agricultural Chemicals Area Director of FMC Corporation (NYSE:FMC), a global producer of chemicals and machinery. Mr. White also served as Vice Chair of the Dean’s Advisory Council for the College of Agriculture, Food and Environmental Sciences at California Polytechnic State University through 2023. Through 2021 he was president and director of the Charlestowne Neighborhood Association (SC), and until 2014 served as a Trustee of the Barrington Hills (IL) Police Pension Fund. Mr. White is also a former director and President of the International Food and Agribusiness Management Association. Mr. White holds a B.A. in History (Highest Honors) from California Polytechnic State University, San Luis Obispo and an M.B.A. in Finance and Multinational Enterprise from the Wharton Graduate School of Business at the University of Pennsylvania. Mr. White’s extensive leadership and industry experience, among other factors, led the Board to determine that he should serve as a director. |
Age: 72 Director since: 2015
Committees: Audit Compensation (Chair) Nominating and Corporate Governance (Chair)
|
|
|
|
|
|
|
|
LSB Industries, Inc. Proxy Statement 19 |
Proposal 2 |
Approval of the LSB Industries, Inc. 2025 Long-Term Incentive Plan |
The Board is seeking the approval of our stockholders of a new LSB Industries, Inc. 2025 Long-Term Incentive Plan (the “2025 LTIP”), which was adopted by the Board on April 9, 2025, subject to stockholder approval to be effective as of the date the 2025 LTIP is approved by our stockholders (the “Effective Date”). The 2025 LTIP replaces and supersedes the LSB Industries, Inc. 2016 Long Term Incentive Plan, as amended and restated on March 4, 2021 (the “2016 LTIP”) in its entirety. The 2016 LTIP will terminate on the Effective Date, and no future awards may be granted thereunder after the Effective Date, provided that the 2016 LTIP will continue to apply to awards granted under the 2016 LTIP prior to the Effective Date. We believe that the adoption and establishment of the 2025 LTIP is important in attracting and retaining the services of key employees, key contractors, and outside directors of the Company and our subsidiaries in a competitive labor market, which is essential to our long-term growth and success. It is the judgment of our Board that the 2025 LTIP is in the best interests of the Company and its stockholders.
The Board recommends that the stockholders vote “FOR” the approval of the 2025 LTIP.
|
A copy of the 2025 LTIP is included as Appendix A to this Proxy Statement. Below is a summary of certain key provisions of the 2025 LTIP, which is qualified in its entirety by reference to the full text of the 2025 LTIP.
Description of the 2025 LTIP
Purpose. The purpose of the 2025 LTIP is to enable us to remain competitive and innovative in our ability to attract and retain the services of key employees, key contractors, and outside directors. The 2025 LTIP provides for the granting of incentive stock options (“ISOs”), nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalent rights, and other awards, which may be granted singly, in combination, or in tandem, and which may be paid in cash or shares of our common stock. The 2025 LTIP is expected to provide flexibility to our compensation methods in order to adapt the compensation of key employees, key contractors, and outside directors to a changing business environment, after giving due consideration to competitive conditions and the impact of applicable tax laws.
Effective Date and Expiration. The 2025 LTIP was originally approved by our Board on April 9, 2025, subject to stockholder approval. The Effective Date will occur upon approval by our stockholders, and the 2025 LTIP will terminate on the 10th anniversary of the Effective Date, unless sooner terminated by our Board. No award may be made under the 2025 LTIP after its termination date, but awards made prior to the termination date may extend beyond that date.
Share Authorization. Subject to certain adjustments and to increase by any shares subject to Prior Plan Awards (defined below) that are eligible for reuse, the number of shares of our common stock that are reserved for issuance pursuant to awards under the 2025 LTIP is four million (4,000,000) shares, of which 100% may be delivered pursuant to ISOs. “Prior Plan Awards” means any awards under the Prior Plans (defined below) that are outstanding immediately prior to the Effective Date. “Prior Plans” means the 2016 LTIP and the LSB Industries, Inc. 2008 Incentive Stock Plan, as amended effective June 5, 2014. Any awards outstanding under any Prior Plan as of the Effective Date will continue to be governed by the terms and conditions of such Prior Plan and the applicable award agreement.
If an award under the Prior Plans, on or after the Effective Date, lapses, expires, terminates, or is cancelled prior to the issuance of shares thereunder or if shares of common stock are issued under the Prior Plans to a participant and thereafter reacquired by us, such shares will be available for issuance under the 2025 LTIP. Notwithstanding the foregoing, the following shares of common stock will not be treated as having been issued under the Prior Plans and will be available for issuance under the 2025 LTIP: (i) shares tendered by a participant
|
|
LSB Industries, Inc. Proxy Statement 20 |
or retained by us as a full or partial payment for the purchase of a Prior Plan award to satisfy tax withholding obligations; (ii) shares covered by a Prior Plan award settled in cash and (iii) the number of shares subject to a Prior Plans award that is a stock appreciation right in excess of the number of shares that are delivered to the participant upon exercise of such award. Additionally, the number of shares available under the Prior Plans will not be reduced to reflect any dividends or dividend equivalents that are reinvested into additional shares or credited as additional restricted stock or restricted stock units.
Shares to be issued may be made available from authorized but unissued shares of our common stock, shares held by us in our treasury, or shares purchased by us on the open market or otherwise. During the term of the 2025 LTIP, we will at all times reserve and keep enough shares available to satisfy the requirements of the 2025 LTIP. If an award under the 2025 LTIP is cancelled, forfeited, or expires, in whole or in part, the shares subject to such forfeited, expired, or cancelled award may again be awarded under the 2025 LTIP. Notwithstanding the foregoing, (i) the number of shares of common stock tendered or withheld in payment of any option price or stock appreciation right price of an award or taxes relating to an award, (ii) shares of common stock that were subject to a stock option or stock appreciation right but were not issued or delivered as a result of the net settlement or net exercise of such stock option or stock appreciation right, and (iii) shares of common stock repurchased on the open market with the proceeds of a stock option’s option price, will not, in each case, be available for awards under the 2025 LTIP. Awards that may be satisfied either by the issuance of common stock or by cash or other consideration will be counted against the maximum number of shares that may be issued under the 2025 LTIP only during the period that the award is outstanding or to the extent the award is ultimately satisfied by the issuance of shares. An award will not reduce the number of shares that may be issued pursuant to the 2025 LTIP if the settlement of the award will not require the issuance of shares, as, for example, a stock appreciation right that can be satisfied only by the payment of cash. Shares forfeited back to us and shares cancelled on account of termination, expiration, or lapse of an award will again be available for grant as ISOs under the 2025 LTIP, but will not increase the maximum number of shares described above as the maximum number of shares that may be delivered pursuant to ISOs.
Limitation on Outside Director Awards. Outside directors may not be granted awards under the 2025 LTIP in any calendar year that exceed $500,000 in the aggregate (with the fair market value of any equity awards determined as of the date of grant), other than a one-time award granted to a newly appointed or elected outside director not to exceed an additional $500,000 in the aggregate (with the fair market value of any equity awards determined as of the date of grant).
Administration. The 2025 LTIP is administered by the Compensation Committee. At any time if there is no Compensation Committee to administer the 2025 LTIP, any reference to the Compensation Committee is a reference to the Board. The Compensation Committee will determine the persons to whom awards are to be made; determine the type, size, and terms of awards; interpret the 2025 LTIP; establish and revise rules and regulations relating to the 2025 LTIP and sub-plans (including sub-plans for awards made to participants, if any, who are not residents of the United States); establish performance goals for awards and certify the extent of their achievement; and make any other determinations that it believes necessary for the administration of the 2025 LTIP. The Compensation Committee may delegate certain duties to one or more of our officers as provided in the 2025 LTIP.
Eligibility. Employees (including any employee who is also a director or an officer), contractors and outside directors of us or our subsidiaries whose judgment, initiative, and efforts contributed to or may be expected to contribute to our successful performance are eligible to participate in the 2025 LTIP. As of the Record Date, we had 587 employees and eight non-employee directors who would be eligible for awards under the 2025 LTIP. The number of contractors eligible for awards under the 2025 LTIP is not readily determinable, as the number of contractors who provide services to us fluctuates from time to time.
Stock Options. The Compensation Committee may grant either ISOs qualifying under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or nonqualified stock options, provided that only employees of us and our subsidiaries (excluding subsidiaries that are not corporations) are eligible to receive ISOs. Stock options may not be granted with an option price less than 100% of the fair market value of a share of common stock on the date the stock option is granted. If an ISO is granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of our stock (or any parent or subsidiary), the option price will be at least 110% of the fair market value of a share of common stock on the date of grant. The Compensation Committee will determine the terms of each stock option at the time of grant, including, without
|
|
LSB Industries, Inc. Proxy Statement 21 |
limitation, the methods by or forms in which shares will be delivered to participants. The maximum term of each option, the times at which each option will be exercisable, and provisions requiring forfeiture of unexercised options at or following termination of employment or service generally are fixed by the Compensation Committee, except that the Compensation Committee may not grant stock options with a term exceeding 10 years or, in the case of an ISO granted to an employee who owns or is deemed to own more than 10% of the combined voting power of all classes of our stock (or any parent or subsidiary), a term exceeding five years.
Recipients of stock options may pay the option price (i) in cash, check, bank draft, or money order payable to the order of the Company; (ii) by delivering to us shares of common stock (including restricted stock) already owned by the participant having a fair market value equal to the aggregate option price; (iii) by delivering to us or our designated agent an executed irrevocable option exercise form together with irrevocable instructions from the participant to a broker or dealer, reasonably acceptable to us, to sell certain of the shares purchased upon the exercise of the option and to deliver to us the amount of sale or loan proceeds necessary to pay the purchase price; (iv) by requesting that we reduce the number of shares otherwise deliverable upon exercise by the number of shares of common stock having a fair market value equal to the aggregate option price; and (v) by any other form of valid consideration that is acceptable to the Compensation Committee in its sole discretion.
Stock Appreciation Rights. The Compensation Committee is authorized to grant stock appreciation rights (“SARs“) as a stand-alone award, or freestanding SARs, or in conjunction with options granted under the 2025 LTIP, or tandem SARs. SARs entitle a participant to receive an amount equal to the excess of the fair market value of a share of common stock on the date of exercise over the fair market value of a share of our common stock on the date of grant. The grant price of a SAR cannot be less than 100% of the fair market value of a share of our common stock on the date of grant. The Compensation Committee will determine the terms of each SAR at the time of the grant, including, without limitation, the methods by or forms in which shares will be delivered to participants. The maximum term of each SAR, the times at which each SAR will be exercisable, and provisions requiring forfeiture of unexercised SARs at or following termination of employment or service generally are fixed by the Compensation Committee, except that no freestanding SAR may have a term exceeding 10 years and no tandem SAR may have a term exceeding the term of the option granted in conjunction with the tandem SAR. Distributions to the recipient may be made in common stock, cash, or a combination of both as determined by the Compensation Committee.
Restricted Stock and Restricted Stock Units. The Compensation Committee is authorized to grant restricted stock and restricted stock units. Restricted stock consists of shares of our common stock that may not be sold, assigned, transferred, pledged, hypothecated, encumbered, or otherwise disposed of, and that may be forfeited in the event of certain terminations of employment or service, prior to the end of a restricted period as specified by the Compensation Committee. Restricted stock units are the right to receive shares of common stock at a future date in accordance with the terms of such grant upon the attainment of certain conditions specified by the Compensation Committee, which include a substantial risk of forfeiture and restrictions on their sale or other transfer by the participant. The Compensation Committee determines the eligible participants to whom, and the time or times at which, grants of restricted stock or restricted stock units will be made; the number of shares or units to be granted; the price to be paid, if any; the time or times within which the shares covered by such grants will be subject to forfeiture; the time or times at which the restrictions will terminate; and all other terms and conditions of the grants. Restrictions or conditions could include, but are not limited to, the attainment of performance goals (as described below), continuous service with us, the passage of time, or other restrictions or conditions. Except as otherwise provided in the 2025 LTIP or the applicable award agreement, a participant will have, with respect to shares of restricted stock, all of the rights of a stockholder of the Company holding the class of common stock that is the subject of the restricted stock, including, if applicable, the right to vote the common stock and the right to receive any dividends thereon.
Dividend Equivalent Rights. The Compensation Committee is authorized to grant a dividend equivalent right to any participant, either as a component of another award or as a separate award, conferring on the participant the right to receive credits based on the cash dividends that would have been paid on the shares of common stock specified in the award as if such shares were held by the participant. The terms and conditions of the dividend equivalent right will be specified by the grant. Dividend equivalents credited to the holder of a dividend equivalent right may be paid currently or may be deemed to be reinvested in additional shares. Any such reinvestment will be at the fair market value at the time thereof. A dividend equivalent right may be settled in cash, shares, or a combination thereof.
|
|
LSB Industries, Inc. Proxy Statement 22 |
Performance Awards. The Compensation Committee may grant performance awards payable in cash, shares of common stock, other consideration, or a combination thereof at the end of a specified performance period. Payment will be contingent upon achieving pre-established performance goals (as discussed below) by the end of the performance period. The Compensation Committee will determine the length of the performance period, the maximum payment value of an award, and the minimum performance goals required before payment will be made, so long as such provisions are not inconsistent with the terms of the 2025 LTIP, and to the extent an award is subject to Section 409A of the Code, are in compliance with the applicable requirements of Section 409A of the Code and any applicable regulations or guidance issued thereunder. In certain circumstances, the Compensation Committee may, in its discretion, determine that the amount payable with respect to certain performance awards will be reduced from the amount of any potential awards, if the Compensation Committee determines, in its sole discretion, that the established performance measures or objectives are no longer suitable because of a change in our business, operations, corporate structure, or for other reasons that the Compensation Committee deemed satisfactory, in which case, the Compensation Committee may modify the performance measures or objectives and/or the performance period as the Compensation Committee deems appropriate in its sole discretion.
Performance Goals. Awards under the 2025 LTIP may be made subject to the attainment of performance goals. Any performance goals may be used to measure our performance as a whole or any of our business units and may be measured relative to a peer group or index. Any performance goal may include or exclude (i) events that are of an unusual nature or indicate infrequency of occurrence; (ii) gains or losses on the disposition of a business; (iii) changes in tax or accounting regulations or laws; (iv) the effect of a merger or acquisition, as identified in our quarterly and annual earnings releases; or (v) other similar occurrences. In all other respects, performance goals will be calculated in accordance with our financial statements, under generally accepted accounting principles, or under a methodology established by the Compensation Committee prior to the issuance of an award, which is consistently applied and identified in the Company’s audited financial statements, including in footnotes, or the Compensation Discussion and Analysis section of the Company’s annual report or proxy statement.
Other Awards. The Compensation Committee may grant other forms of awards, based upon, payable in, or that otherwise relate to, in whole or in part, shares of common stock, if the Compensation Committee determines that such other form of award is consistent with the purpose and restrictions of the 2025 LTIP. The terms and conditions of such other form of award will be specified by the grant. Such other awards may be granted for no cash consideration, for such minimum consideration as may be required by applicable law, or for such other consideration as may be specified by the grant.
No Repricing of Stock Options or SARs. The Compensation Committee may not, without the approval of the Company’s stockholders, “reprice” any stock option or SAR. For purposes of the 2025 LTIP, “reprice” means any of the following or any other action that has the same effect: (i) amending a stock option or SAR to reduce its exercise price or base price; (ii) canceling a stock option or SAR at a time when its exercise price or base price exceeds the fair market value of a share of common stock in exchange for cash or a stock option, SAR, award of restricted stock or other equity award; or (iii) taking any other action that is treated as a repricing under generally accepted accounting principles; provided that nothing will prevent the Compensation Committee from (x) making adjustments to awards upon changes in capitalization; (y) exchanging or cancelling awards upon a merger, consolidation, or recapitalization; or (z) substituting awards for awards granted by other entities, to the extent permitted by the 2025 LTIP.
Vesting, Forfeiture, Recoupment and Assignment. The Compensation Committee, in its sole discretion, may determine that an award will be immediately vested in whole or in part, or that all or any portion may not be vested until a date, or dates, subsequent to its date of grant, or until the occurrence of one or more specified events, subject in any case to the terms of the 2025 LTIP. If the Compensation Committee imposes conditions upon vesting, then, except as otherwise provided below, subsequent to the date of grant, the Compensation Committee may, in its sole discretion, accelerate the date on which all or any portion of the award may be vested.
The Compensation Committee may impose on any award at the time of grant or thereafter, such additional terms and conditions as the Compensation Committee determines, including terms requiring forfeiture of awards in the event of a participant’s termination of service. The Compensation Committee will specify the circumstances on which performance awards may be forfeited in the event of a termination of service by a participant prior to the end of a performance period or settlement of awards. Except as otherwise determined by the Compensation
|
|
LSB Industries, Inc. Proxy Statement 23 |
Committee, restricted stock will be forfeited upon a participant’s termination of employment or service during the applicable restriction period. In addition, we may recoup all or any portion of any shares or cash paid to a participant in connection with any award in the event of a restatement of our financial statements as set forth in our Recoupment Policy, as such policy may be approved or modified by our Board from time to time.
Awards granted under the 2025 LTIP generally are not assignable or transferable except by will or by the laws of descent and distribution, except that the Compensation Committee may, in its discretion and pursuant to the terms of an award agreement, permit transfers of awards to (i) the spouse (or former spouse), children, or grandchildren of the participant (“Immediate Family Members”); (ii) a trust or trusts for the exclusive benefit of such Immediate Family Members; (iii) a partnership in which the only partners are (x) such Immediate Family Members, and/or (y) entities which are controlled by Immediate Family Members; (iv) an entity exempt from federal income tax pursuant to Section 501(c)(3) of the Code or any successor provision; or (v) a split interest trust or pooled income fund described in Section 2522(c)(2) of the Code or any successor provision; provided that (x) there will be no consideration for any such transfer, (y) the applicable award agreement pursuant to which such award is granted must be approved by the Compensation Committee and must expressly provide for such transferability, and (z) subsequent transfers of transferred awards will be prohibited except those by will or the laws of descent and distribution.
Adjustments Upon Changes in Capitalization. In the event that any dividend or other distribution, recapitalization, stock split, reverse stock split, rights offering, reorganization, merger, consolidation, split-up, spin-off, split-off, combination, subdivision, repurchase, or exchange of shares of common stock or other securities of the Company, issuance of warrants or other rights to purchase shares of common stock or other securities of the Company, or other similar corporate transaction or event affects the fair value of an award, then the Compensation Committee will adjust any or all of the following so that the fair value of the award immediately after the transaction or event is equal to the fair value of the award immediately prior to the transaction or event: (i) the number of shares and type of common stock (or the securities or property) which thereafter may be made the subject of awards; (ii) the number of shares and type of common stock (or other securities or property) subject to outstanding awards; (iii) the option price of each outstanding award; (iv) the amount, if any, we pay for forfeited shares in accordance with the terms of the 2025 LTIP; and (v) the number of or exercise price of shares then subject to outstanding SARs previously granted and unexercised under the 2025 LTIP, to the end that the same proportion of our issued and outstanding shares of common stock in each instance will remain subject to exercise at the same aggregate exercise price; provided, that the number of shares of common stock (or other securities or property) subject to any award will always be a whole number. No adjustment will be made or authorized to the extent that such adjustment would cause the 2025 LTIP or any stock option to violate Section 422 of the Code or Section 409A of the Code. All such adjustments must be made in accordance with the rules of any securities exchange, stock market, or stock quotation system to which we are subject.
Amendment or Discontinuance of the 2025 LTIP. The Board may, at any time and from time to time, without the consent of participants, alter, amend, revise, suspend, or discontinue the 2025 LTIP in whole or in part; provided, that (i) no amendment that requires stockholder approval in order for the 2025 LTIP and any awards under the 2025 LTIP to continue to comply with Sections 421 and 422 of the Code (including any successors to such sections, or other applicable law) or any applicable requirements of any securities exchange or inter-dealer quotation system on which our stock is listed or traded, will be effective unless such amendment is approved by the requisite vote of our stockholders entitled to vote on the amendment; and (ii) unless required by law, no action by the Board regarding amendment or discontinuance of the 2025 LTIP may adversely affect any rights of any participants or obligations of us to any participants with respect to any outstanding awards under the 2025 LTIP without the consent of the affected participant.
U.S. Federal Income Tax Consequences
The following is a brief summary of certain U.S. federal income tax consequences relating to the 2025 LTIP. This summary does not purport to address all aspects of U.S. federal income taxation and does not describe state, local, or foreign tax consequences. This discussion is based upon provisions of the Code and the Treasury Regulations issued thereunder, and judicial and administrative interpretations under the Code and Treasury Regulations, all as in effect as of the date hereof, and all of which are subject to change (possibly on a retroactive basis) or different interpretation.
|
|
LSB Industries, Inc. Proxy Statement 24 |
Law Affecting Deferred Compensation. In 2004, Section 409A was added to the Code to regulate all types of deferred compensation. If the requirements of Section 409A of the Code are not satisfied, deferred compensation and earnings thereon will be subject to tax as it vests, plus an interest charge at the underpayment rate plus 1% and a 20% penalty tax. Certain performance awards, stock options, SARs, restricted stock units, and certain types of restricted stock are subject to Section 409A of the Code.
Incentive Stock Options. A participant will not recognize income at the time an ISO is granted. When a participant exercises an ISO, a participant also generally will not be required to recognize income (either as ordinary income or capital gain). However, to the extent that the fair market value (determined as of the date of grant) of the shares with respect to which the participant’s ISOs are exercisable for the first time during any year exceeds $100,000, the ISOs for the shares over $100,000 will be treated as nonqualified stock options, and not ISOs, for U.S. federal tax purposes, and the participant will recognize income as if the ISOs were nonqualified stock options. In addition to the foregoing, if the fair market value of the shares received upon exercise of an ISO exceeds the exercise price, then the excess may be deemed a tax preference adjustment for purposes of the U.S. federal alternative minimum tax calculation. The federal alternative minimum tax may produce significant tax repercussions depending upon the participant’s particular tax status.
The tax treatment of any shares acquired by exercise of an ISO will depend upon whether the participant disposes of his or her shares prior to the later of: (i) two years after the date the ISO was granted or (ii) one year after the shares were transferred to the participant upon exercise of the ISO (referred to as the “Holding Period”). If a participant disposes of shares acquired by exercise of an ISO after the expiration of the Holding Period, any amount received in excess of the participant’s tax basis for such shares will be treated as a short-term or long-term capital gain, depending upon how long the participant has held the shares. If the amount received is less than the participant’s tax basis for such shares, the loss will be treated as a short-term or long-term capital loss, depending upon how long the participant has held the shares. If the participant disposes of shares acquired by exercise of an ISO prior to the expiration of the Holding Period, the disposition will be considered a “disqualifying disposition.” If the amount received for the shares is greater than the fair market value of the shares on the exercise date, then the difference between the ISO’s exercise price and the fair market value of the shares at the time of exercise will be treated as ordinary income for the tax year in which the “disqualifying disposition” occurs. The participant’s basis in the shares will be increased by an amount equal to the amount treated as ordinary income due to such “disqualifying disposition.” In addition, the amount received in such “disqualifying disposition” over the participant’s increased basis in the shares will be treated as capital gain. However, if the price received for shares acquired by exercise of an ISO is less than the fair market value of the shares on the exercise date and the disposition is a transaction in which the participant sustains a loss which otherwise would be recognizable under the Code, then the amount of ordinary income that the participant will recognize is the excess, if any, of the amount realized on the “disqualifying disposition” over the basis of the shares.
Nonqualified Stock Options. A participant generally will not recognize income at the time a nonqualified stock option is granted. When a participant exercises a nonqualified stock option, the difference between the option price and any higher market value of the shares of common stock on the date of exercise will be treated as compensation taxable as ordinary income to the participant. The participant’s tax basis for the shares acquired under a nonqualified stock option will be equal to the option price paid for such shares, plus any amounts included in the participant’s income as compensation. When a participant disposes of shares acquired by exercise of a nonqualified stock option, any amount received in excess of the participant’s tax basis for such shares will be treated as short-term or long-term capital gain, depending upon how long the participant has held the shares. If the amount received is less than the participant’s tax basis for such shares, the loss will be treated as a short-term or long-term capital loss, depending upon how long the participant has held the shares.
Special Rule if Option Price is Paid in Shares. If a participant pays the option price of a nonqualified stock option with previously-owned shares of our common stock and the transaction is not a disqualifying disposition of shares previously acquired under an ISO, the shares received equal to the number of shares surrendered are treated as having been received in a tax-free exchange. The participant’s tax basis and holding period for these shares received will be equal to the participant’s tax basis and holding period for the shares surrendered. The shares received in excess of the number of shares surrendered will be treated as compensation taxable as ordinary income to the participant to the extent of their fair market value. The participant’s tax basis in these shares will be equal to their fair market value on the date of exercise, and the participant’s holding period for such shares will begin on the date of exercise.
|
|
LSB Industries, Inc. Proxy Statement 25 |
If the use of previously acquired shares to pay the exercise price of a nonqualified stock option constitutes a disqualifying disposition of shares previously acquired under an ISO, the participant will have ordinary income as a result of the disqualifying disposition in an amount equal to the excess of the fair market value of the shares surrendered, determined at the time such shares were originally acquired on exercise of the ISO, over the aggregate option price paid for such shares. As discussed above, a disqualifying disposition of shares previously acquired under an ISO occurs when the participant disposes of such shares before the end of the Holding Period. The other tax results from paying the exercise price with previously-owned shares are as described above, except that the participant’s tax basis in the shares that are treated as having been received in a tax-free exchange will be increased by the amount of ordinary income recognized by the participant as a result of the disqualifying disposition.
Restricted Stock. A participant who receives restricted stock generally will recognize as ordinary income the excess, if any, of the fair market value of the shares granted as restricted stock at such time as the shares are no longer subject to forfeiture or restrictions, over the amount paid, if any, by the participant for such shares. However, a participant who receives restricted stock may make an election under Section 83(b) of the Code within 30 days of the date of transfer of the shares to recognize ordinary income on the date of transfer of the shares equal to the excess of the fair market value of such shares (determined without regard to the restrictions on such shares) over the purchase price, if any, of such shares. If a participant does not make an election under Section 83(b) of the Code, then the participant will recognize as ordinary income any dividends received with respect to such shares. At the time of sale of such shares, any gain or loss realized by the participant will be treated as either short-term or long-term capital gain (or loss) depending on the holding period. For purposes of determining any gain or loss realized, the participant’s tax basis will be the amount previously taxable as ordinary income, plus the purchase price paid by the participant, if any, for such shares.
Stock Appreciation Rights. Generally, a participant who receives a stand-alone SAR will not recognize taxable income at the time the stand-alone SAR is granted, provided that the SAR is exempt from or complies with Section 409A of the Code. If an employee receives the appreciation inherent in the SARs in cash, the cash will be taxed as ordinary income to the recipient at the time it is received. If a recipient receives the appreciation inherent in the SARs in stock, the spread between the then current market value and the grant price, if any, will be taxed as ordinary income to the employee at the time it is received. In general, there will be no federal income tax deduction allowed to us upon the grant or termination of SARs. However, upon the exercise of a SAR, we will be entitled to a deduction equal to the amount of ordinary income the recipient is required to recognize as a result of the exercise.
Other Awards. In the case of an award of restricted stock units, performance awards, dividend equivalent rights, or other stock or cash awards, the recipient will generally recognize ordinary income in an amount equal to any cash received and the fair market value of any shares received on the date of payment or delivery, provided that the award is exempt from or complies with Section 409A of the Code. In that taxable year, we will receive a federal income tax deduction in an amount equal to the ordinary income that the participant has recognized.
Federal Tax Withholding. Any ordinary income realized by a participant upon the exercise of an award under the 2025 LTIP is subject to withholding of U.S. federal, state, and local income tax and to withholding of the participant’s share of tax under the Federal Insurance Contribution Act and the Federal Unemployment Tax Act. To satisfy our federal income tax withholding requirements, we will have the right to require that, as a condition to delivery of any certificate for shares of common stock or the registration of the shares in the participant’s name, the participant remit to us an amount sufficient to satisfy the withholding requirements. Alternatively, we may withhold a portion of the shares (valued at fair market value) that otherwise would be issued to the participant to satisfy all or part of the withholding tax obligations or may, if we consent, accept delivery of shares (that the participant has not acquired from us within six months prior to the date of exercise) with an aggregate fair market value that equals or exceeds the required tax withholding payment. Withholding does not represent an increase in the participant’s total income tax obligation, since it is fully credited toward his or her tax liability for the year. Additionally, withholding does not affect the participant’s tax basis in the shares. Compensation income realized and tax withheld will be reflected on Forms W-2 supplied by us to employees by January 31 of the succeeding year. Deferred compensation that is subject to Section 409A of the Code will be subject to certain federal income tax withholding and reporting requirements.
Tax Consequences to Us. To the extent that a participant recognizes ordinary income in the circumstances described above, we will be entitled to a corresponding deduction provided that, among other things, the income
|
|
LSB Industries, Inc. Proxy Statement 26 |
meets the test of reasonableness, is an ordinary and necessary business expense, is not an “excess parachute payment” within the meaning of Section 280G of the Code, and is not disallowed by the $1,000,000 limitation on certain executive compensation under Section 162(m) of the Code.
Million Dollar Deduction Limit and Other Tax Matters. We may not deduct compensation of more than $1,000,000 that is paid to “covered employees” (as defined in Section 162(m) of the Code), which include (i) an individual (or, in certain circumstances, his or her beneficiaries) who, at any time during the taxable year, is either our principal executive officer or principal financial officer; (ii) an individual who is among our three highest compensated officers for the taxable year (other than an individual who was either our principal executive officer or principal financial officer at any time during the taxable year); or (iii) anyone who was a covered employee for purposes of Section 162(m) of the Code for any tax year beginning on or after January 1, 2018. This limitation on deductions (x) only applies to compensation paid by a publicly-traded corporation (and not compensation paid by non-corporate entities) and (z) may not apply to certain types of compensation, such as qualified performance-based compensation that is payable pursuant to a written, binding contract that was in effect as of November 2, 2018, so long as the contract is not materially modified after that date.
If an individual’s rights under the 2025 LTIP are accelerated as a result of a change in control and the individual is a “disqualified individual” under Section 280G of the Code, the value of any such accelerated rights received by such individual may be included in determining whether or not such individual has received an “excess parachute payment” under Section 280G of the Code, which could result in (i) the imposition of a 20% federal excise tax (in addition to federal income tax) payable by the individual on the value of such accelerated rights, and (ii) the loss by us of a compensation deduction.
Interest of Directors and Executive Officers
All members of our Board and all of our executive officers are eligible for awards under the 2025 LTIP and, thus, have a personal interest in the approval of the 2025 LTIP.
New Plan Benefits
We cannot currently determine the benefits or number of shares subject to awards that may be granted in the future to eligible participants under the 2025 LTIP because the grant of awards and the terms of such awards are to be determined in the sole discretion of the Compensation Committee.
The fair market value of our common stock is $5.44 per share based on the closing price of our common stock on April 9, 2025.
Equity Compensation Plan Information (as of April 7, 2025)
As of April 7, 2025, the following were outstanding under the 2016 LTIP (there are no effective grants under any other plans):
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE LSB INDUSTRIES, INC. 2025 LONG-TERM INCENTIVE PLAN |
Proposal 3 |
|
|
LSB Industries, Inc. Proxy Statement 27 |
Ratification of the Appointment of Ernst & Young LLP as the Independent Registered Public Accounting Firm for 2025 |
The Audit Committee has appointed the firm of Ernst & Young LLP ("E&Y") as its independent registered public accounting firm for 2025.We are asking our stockholders to ratify this appointment.
E&Y has served as our auditor since 1968. If the stockholders do not ratify the appointment of E&Y, the Audit Committee will reconsider the appointment and may or may not consider the appointment of another independent registered public accounting firm for the Company for 2025 or future years.
Consistent with past practices, it is expected that one or more representatives of E&Y will attend the Annual Meeting and will be available to respond to appropriate questions or make a statement should they desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2025 |
|
|
LSB Industries, Inc. Proxy Statement 28 |
Proposal 4 |
Advisory Vote to Approve Named Executive Officer Compensation |
We are asking our stockholders to approve the following advisory resolution related to the compensation of the Company’s named executive officers ("NEOs") commonly known as a "say-on-pay" proposal:
RESOLVED, that the stockholders approve, on a non-binding advisory basis, the compensation of the NEOs for the fiscal year ended December 31, 2024, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables, and the related narrative discussion in this Proxy Statement.
Our stockholders’ opinions are important to us, and we hold this advisory vote annually in order to get a better understanding of their views on the compensation of our NEOs and its alignment with stockholder interests. The Board and the Compensation and Talent Management Committee, which is composed of independent directors, will review and take into account the outcome of this vote when considering future executive compensation decisions.
Stockholders are encouraged to read the Compensation Discussion and Analysis, the accompanying compensation tables, and the narrative disclosure related to executive compensation disclosure in this Proxy Statement, which provide information about our compensation policies and the compensation of our NEOs. Stockholders should note that, because the advisory vote on executive compensation occurs well after the beginning of the compensation year, and because the different elements of our executive compensation program are designed to operate in an integrated manner and to complement one another, it may not be appropriate or feasible to change our executive compensation program in consideration of any one year’s advisory vote on executive compensation by the time of the following year’s annual meeting of stockholders.
The Board intends to hold this vote annually, and the next advisory vote to approve NEO compensation will occur in 2026.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL, ON AN ADVISORY BASIS, OF THE RESOLUTION TO APPROVE THE COMPANY’S NAMED EXECUTIVE OFFICER COMPENSATION |
|
|
LSB Industries, Inc. Proxy Statement 29 |
Corporate Governance
Corporate Governance Highlights The Board is committed to continually improving its corporate governance processes, practices and procedures. Our governance policies and structures are designed to promote the Board’s thoughtful oversight of the Company’s business decisions and ensure intelligent risk-taking, with the goal of furthering our long-term strategic goal of becoming a best-in-class chemical producer. Highlights include: • A diverse Board with the appropriate mix of skills, experience and perspective; • The appointment of a lead independent director; • Nine of our 10 directors are independent under NYSE listing standards, with Mr. Behrman, our Chairman and CEO as the only non-independent director. While Mr. Behrman is not deemed independent, we believe his interests are aligned with the Company’s as a result of his significant ownership interest in the Company; • All Board committees are fully independent; • Policy limiting the number of public company boards on which directors may serve; • A portion of all executives’ annual compensation is tied to the achievement of environmental and safety metrics, reflecting the importance of our employees and their safety to the Company; • Minimum share ownership requirements for executive officers; • Minimum share ownership guidelines for directors; • Anti-Hedging of Company Securities Policy; • A global Anti-Bribery and Corruption Policy; and • Stockholder ratification of the selection of external audit firm. |
Corporate Responsibility
Overview
As a public company and as a member of the communities where we live and work, it is our obligation to maximize long-term value of the Company for all our stakeholders, including our employees, customers, stockholders, the communities where we operate and the environment. We do this by focusing on safety throughout the Company, on efficiently operating our business and on actively implementing efficient capital management strategies. As we work to achieve success in these endeavors, we are constantly mindful of our responsibility as an organization to be a good corporate citizen. In every facet of operating our company, our decisions are guided by our Core Values, which are intended to lead us toward minimizing any negative impacts our operations may have on the aspects of our society and environment that we come in contact with, while also diligently seeking ways to improve society and the environment.
We are committed to being a leader in the production of low and no carbon products that build, feed and power the world. LSB is dedicated to building a culture of excellence in customer experiences as we deliver essential products across the agricultural and industrial end markets and, in the future, the energy markets. Building culture is not simply a priority or an initiative. Our efforts to develop and grow our culture are continuous, never-ending and are aimed at delivering impactful outcomes throughout our organization.
Risk Management and Strategy
We recognize the importance of developing, implementing, and maintaining robust cybersecurity measures to maintain the security, confidentiality, integrity, and availability of our business systems and commercially sensitive or confidential information. Our business depends on the proper functioning and availability of our information technology platform, including communications and data processing systems. We are also required to effect electronic transmissions with third parties including clients, vendors and others with whom we do
|
|
LSB Industries, Inc. Proxy Statement 30 |
business, and with our Board. We recognize that, as we continue to increase our dependence on information technologies to conduct our operations, the risks associated with cybersecurity also increase.
LSB utilizes an enterprise-wide risk management process to identify, assess and manage risks faced by our organization. The Company’s Enterprise Risk Management Committee ("ERM Committee") is designated with the responsibility to direct our risk management program and to execute our risk management strategy, including cyber and technology risk. The ERM Committee is the management-entity designated by the Chief Executive Officer with the responsibility to direct and execute our risk governance and strategy, including cyber risk. This ERM Committee is composed of each of the Company’s Executive and Senior Vice Presidents. Our Senior Vice President and Treasurer chairs the ERM Committee. To protect our information systems and operations from risks and to execute our cyber strategy, we use various security processes and technology tools that help identify, investigate, assess, prevent, and resolve potential vulnerabilities and security incidents in a timely manner. These include, but are not limited to, detection, monitoring and reporting tools. Our team uses widely adopted methods and models to identify, prioritize and manage cyber and technology risks and develop related information security controls and safeguards. In partnership with third-party advisors and consultants, we conduct regular reviews and tests of our program and leverage audits, penetration and vulnerability testing, cyber risk tabletops and security awareness trainings, and other cyber exercises to evaluate the effectiveness of our program and improve our security measures. Our information security policies are designed to address current applicable legal requirements and to align with recognized frameworks for cyber risk management. These standards cover physical, administrative, and technical controls and address a wide range of current cyber threats. These policies and standards are reviewed and updated on a regular basis in order to respond to the constantly changing threat landscape.
Governance of Cybersecurity Matters
Our Board considers cybersecurity to be a business risk and oversees enterprise-wide risks through the Audit Committee. The Audit Committee is designated by the Board with the responsibility for monitoring and reporting on management’s cybersecurity and risk management processes. The Vice President for Information Technology ("IT") leads the information security program, manages cyber governance and incident management. The Vice President of IT and the Director of Infrastructure and Security have over 45 years of combined information technology experience and over a decade of cybersecurity experience. The ERM Committee and Vice President of IT assess cyber risk and provide recommendations for management. The Chair of the ERM Committee and the Vice President for IT brief the Audit Committee regularly. These updates include an overview of cyber risk management activities, cyber threats, and key information security processes and mitigation efforts. The Chair of the Audit Committee provides regular reports to the Board on critical cyber risk and security topics presented to the Audit Committee by management.
Incident Management
We have implemented security procedures and measures in order to protect our information from being vulnerable to theft, loss, damage or interruption from a number of potential sources or events. LSB maintains and tests an incident response plan that outlines steps for the containment, investigation of, response to and recovery from cyber events. The plan also includes information pertaining to roles, responsibilities, and reporting process. This plan is a part of our formal, enterprise-wide crisis management process, which outlines a communication plan with executive leadership as well as guidelines for communication with the Board. Although we make efforts to maintain the security and integrity of our information systems and technology operations, these systems are subject to the cyber risk of incident or disruption, and there can be no assurance that our security safeguards, and those of our third-party providers, will prevent incidents to our or our third-party providers’ systems that could adversely affect our business. For a discussion of these risks, see "Item 1A. Risk Factors—Risks Relating to our Business" of our Annual Report on Form 10-K for the year ended December 31, 2024.
Board Oversight of ESG
Our Board is engaged in overseeing our business strategies and related risks and opportunities. This includes Environmental, Social and Governance ("ESG") topics. The committees of the Board facilitate oversight of issues that impact many areas of our business, and the Board and various committees continue to review the manner
|
|
LSB Industries, Inc. Proxy Statement 31 |
in which oversight of ESG topics is exercised. Committees report to the full Board on key issues. Examples of ESG oversight include:
Board Diversity
We believe that having a mix of directors on the Board who are from varied backgrounds and who bring a diverse range of perspectives and insights, foster enhanced decision-making, promote better corporate governance and build Board capability.
Our belief is reflected in our Corporate Governance Guidelines, which recognize that only highly qualified candidates with the right personal qualities (such as leadership skills, integrity, time and commitment), core business skills and industry experience will be considered as Board members. While the qualifications of each individual director are paramount, diversity criteria relating to the director’s age, tenure, geographic location, education, gender and ethnicity must also be given due consideration. Our Corporate Governance Guidelines include diversity criteria to formally acknowledge the Company’s goal to include women and minority candidates in its director search process. Our Corporate Governance Guidelines are available for review at www.lsbindustries.com/investors.
Executive Diversity
We believe that a diverse workplace culture drives enhanced decision-making and can influence employee attraction and retention, as well as customer satisfaction. Diversity in our business creates long-term value by aligning LSB’s business perspectives with an increasingly diverse customer base, building the capability to operate in our markets and enabling the Company to recruit from a larger talent pool. Within our senior executive leadership team, as is the case within the Company as a whole, the level of representation from diverse groups is a criterion that we give due consideration when identifying candidates.
Meetings of the Board
Our Board held six meetings in 2024. Like many companies, we moved to a blend of in person and virtual meetings. We have found the virtual meeting format works well and we will continue to review the right mix of in-person and virtual meetings going forward. All directors attended 100% of the combined total of the meetings held by the Board and the meetings held by all committees of the Board on which each director served during 2024. All then-serving members of the Board attended the annual meeting of stockholders in 2024. Our Corporate Governance Guidelines provide that our directors are expected to attend our annual meetings of stockholders, but we do not have a formal policy requiring them to do so.
Board Leadership Structure
Our Chief Executive Officer, Mr. Behrman, also serves as the Chairman of the Board. The Board believes that Mr. Behrman’s experience and in-depth knowledge about the Company and our industry make him best suited to effectively assess the opportunities and challenges facing the Company and our business. At this time, the Board believes that this leadership structure promotes decisive leadership, fosters clear accountability and enhances our ability to communicate our strategy clearly and consistently to our stockholders, employees and customers.
Our Corporate Governance Guidelines provide that if the Chairman of the Board is not an independent director, the independent members of the Board will select an independent director to serve as the lead independent director.
|
|
LSB Industries, Inc. Proxy Statement 32 |
Mr. White has served as the lead independent director of the Board since 2024. The Board has determined that, at least annually, the Board shall elect a lead independent director by and from the independent Board members to serve for a minimum of one year with responsibilities to include:
Committees of the Board of Directors and Committee Charters
The Board has three separately designated active standing committees: a Nominating and Corporate Governance Committee, an Audit Committee, and a Compensation and Talent Management Committee. The Board has adopted written charters for each of these committees. The Board has determined that all members of these committees are independent directors and satisfy the Securities and Exchange Commission ("SEC") and NYSE requirements for independence. A current copy of the charters of the aforementioned committees along with our corporate governance guidelines are available on our website at www.lsbindustries.com and are also available from the Company upon request to our Corporate Secretary. The following sets forth the current members of each committee and current Board class expiration year:
Name |
Class |
Age |
|
Director Since |
Audit |
Nominating |
Compensation |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark T. Behrman |
|
2025 |
|
62 |
|
2018 |
|
|
|
|
|
|
|
|
|
Riccardo Bertocco |
|
2025 |
|
57 |
|
2025 |
|
|
|
|
|
|
|
|
|
Jonathan S. Bobb |
|
2025 |
|
49 |
|
2015 |
|
X |
|
|
|
|
|
X |
|
Richard Sanders, Jr.(1) |
|
2025 |
|
68 |
|
2014 |
|
X |
|
|
X |
|
|
|
|
Steven L. Packebush |
|
2026 |
|
60 |
|
2020 |
|
X |
|
|
X |
|
|
|
|
Diana M. Peninger |
|
2026 |
|
60 |
|
2020 |
|
X |
|
|
|
|
|
X |
|
Lynn F. White |
|
2026 |
|
72 |
|
2015 |
|
X |
|
|
Chair |
|
|
Chair |
|
Barry H. Golsen |
|
2027 |
|
74 |
|
1981 |
|
X |
|
|
X |
|
|
|
|
Kanna Kitamura |
|
2027 |
|
52 |
|
2018 |
|
|
|
|
X |
|
|
X |
|
John D. Chandler |
|
2027 |
|
55 |
|
2024 |
|
Chair |
|
|
|
|
|
|
|
Director Statistics
Gender Diversity |
Racial Diversity |
Average Age |
Independence |
Average Tenure |
20% |
10% |
61 |
90% |
9.1 |
|
|
LSB Industries, Inc. Proxy Statement 33 |
Nominating and Corporate Governance Committee
The Nominating Committee consists entirely of independent directors who were appointed by the Board to serve until their successors are appointed and qualified. The Board determined that each member of the Nominating Committee is independent in accordance with the listing standards of the NYSE. During 2024, the Nominating Committee held three meetings.
The Nominating Committee is primarily responsible for:
The Nominating Committee periodically assesses the skills and experience needed for the Board to properly direct the business and affairs of the Company. The Nominating Committee seeks Board candidates possessing the following qualities:
The Nominating Committee evaluates the skills, qualifications, experience and expertise of candidates to determine director nominees. For incumbent directors, the factors also include past performance on the Board and contributions to their respective committees.
The Nominating Committee is also responsible for:
The Nominating Committee considers the qualifications of director candidates recommended by stockholders and evaluates each of them using the same criteria the Nominating Committee uses for incumbent or other candidates identified by the Nominating Committee. Director candidate recommendations by stockholders must be made in compliance with the procedures set forth in our Bylaws by notice in writing delivered or mailed to the Chairman of the Nominating Committee, in care of our Corporate Secretary, LSB Industries, Inc., 3503 NW 63rd Street, Suite 500, Oklahoma City, Oklahoma 73116. Please indicate "Nominating and Corporate Governance Committee" on the envelope.
|
|
LSB Industries, Inc. Proxy Statement 34 |
Audit Committee
The Audit Committee assists the Board in (i) overseeing the accounting, reporting, and financial practices of the Company and its subsidiaries, (ii) preparing the report required by the SEC to be included in the Company’s annual proxy and (iii) providing oversite of the Company’s Enterprise Risk Management program.
In carrying out these purposes, the Audit Committee, among other things, is responsible for:
During 2024, the Audit Committee held eight meetings.
Audit Committee Financial Expert
In 2024, the Board evaluated the members of the Audit Committee and believes that each member of the Audit Committee is financially literate and that each member has sufficient background and experience to fulfill the duties of the Audit Committee. The Board has determined that Mr. Chandler satisfies the definition of "audit committee financial expert" under the NYSE listing standards and applicable SEC regulations.
|
|
LSB Industries, Inc. Proxy Statement 35 |
Audit Committee Report The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for establishing and maintaining adequate internal controls over financial reporting, including disclosure controls and procedures, and for preparing the Company’s consolidated financial statements. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited consolidated financial statements of the Company and its subsidiaries and management’s report on the Company’s internal control over financial reporting in the 2024 annual report. The Audit Committee also reviews the Company’s quarterly and annual reporting on Forms 10-Q and 10-K prior to filing with the SEC. The Audit Committee’s review process includes discussions of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and estimates and the clarity of disclosures in the financial statements. The independent registered public accounting firm is responsible for expressing opinions on the conformity of the consolidated financial statements with accounting principles generally accepted in the United States and the effectiveness of the Company’s internal control over financial reporting. The Audit Committee has discussed with the independent registered public accounting firm the matters that are required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC. In addition, in accordance with the rules of the PCAOB, the Audit Committee has discussed with and has received the written disclosures and letter from the independent registered public accounting firm regarding its independence from management and the Company. The Audit Committee also has considered whether the independent registered public accounting firm’s provision of non-audit services to the Company is compatible with maintaining the firm’s independence. The Audit Committee discussed their overall audit scopes and plans separately with the Company’s internal auditors and independent registered public accounting firm. The Audit Committee meets with the internal auditors and the independent registered public accounting firm, with and without management present, to discuss the results of their audits, evaluations by management and the independent registered public accounting firm of the Company’s internal control over financial reporting and the overall quality of the Company’s financial reporting. The Audit Committee also meets privately with the Company’s compliance officer. The Audit Committee held eight meetings during 2024. In reliance on the reviews and discussions referenced above, the Audit Committee recommended to the Board of Directors (and the Board approved) that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and filed with the SEC. The Audit Committee also reappointed Ernst & Young LLP as the Company’s independent registered public accounting firm for 2025. Stockholders are being asked to ratify that selection at the 2025 Annual Meeting. Submitted by the Audit Committee of the Company’s Board of Directors. |
|
|
John D. Chandler Chair Jonathan S. Bobb Barry H. Golsen Steven L. Packebush Diana M. Peninger Richard S. Sanders, Jr. Lynn F. White |
Notwithstanding anything to the contrary set forth in our filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate by reference previous or future filings, including this Proxy Statement, in whole or in part, the foregoing report of the Audit Committee and any statements regarding the independence of the Audit Committee members shall not constitute soliciting material and shall not be deemed filed or incorporated by reference into any such filings, except to the extent the Company specifically incorporates this report or any such statements therein. |
|
|
|
LSB Industries, Inc. Proxy Statement 36 |
Fees Paid to Independent Registered Public Accounting Firm
Audit Fees
The aggregate fees billed by E&Y for professional services rendered for the audit of our annual financial statements for the fiscal years ended December 31, 2024 and 2023, for the reviews of the financial statements included in our Quarterly Reports on Form 10-Q for those fiscal years, and for review of SEC-related documents for those fiscal years were $1,248,164 and $1,168,550, respectively.
Audit-Related Fees
E&Y billed us $44,970 and $43,450 during 2024 and 2023 respectively, for audit-related services, which included services relating to our benefit plan audits.
Tax Fees
E&Y billed us $91,376 and $145,277 during 2024 and 2023, respectively, for tax services, tax consultations and planning.
All Other Fees
E&Y did not perform or bill for any financial or tax due diligence related services for us during 2024 or 2023.
Engagement of the Independent Registered Public Accounting Firm
The Audit Committee is responsible for approving all engagements with E&Y to perform audit or non-audit services for us prior to us engaging E&Y to provide those services. All of the services outlined under the headings "Audit-Related Fees," "Tax Fees," and "All Other Fees," above were approved by the Audit Committee. The Audit Committee has considered whether E&Y’s provision of the services described above for the fiscal years ended December 31, 2024 and 2023 is compatible with maintaining its independence.
Audit Committee’s Pre-Approval Policies and Procedures
All audit and non-audit services that may be provided to us by our principal accountant, E&Y, require pre-approval by the Audit Committee. The Audit Committee delegates such pre-approval of services to the Chairman of the Audit Committee. The Audit Committee or the Chairman of the Audit Committee evaluates the pre-approval request to determine the appropriateness of the proposed project and proposed fee. Further, E&Y may not provide to us those services specifically prohibited by the SEC.
Oversight of Risk Management
The Board oversees management’s risk management activities, including those relating to credit risk, liquidity risk, cyber risk, and operational risk, through a combination of processes. The Board believes effective risk management enables us to accomplish the following:
In addition to the Company’s compliance program, the Board encourages management to promote a corporate culture that incorporates risk management into the Company’s corporate strategy and day-to-day business operations. The Board also continually works, with the input of the Company’s executive officers, to assess and analyze the most likely areas of future risk for the Company.
|
|
LSB Industries, Inc. Proxy Statement 37 |
The Audit Committee is responsible for overseeing the Company’s policies with respect to risk assessment and risk management relating to the Company’s major financial risk exposures and reviewing and discussing such material risks and the steps taken to monitor and control such exposures.
Enterprise Risk Management
As discussed on page 30, LSB has a robust enterprise risk management program that facilitates identification, communication and management of the most significant risks throughout the Company. We employ a formalized framework in which risk, governance and oversight are largely embedded in our organization and control structures. Included in our formal process are regular risk assessments. The purpose of these risk assessments is to:
The risk assessment is performed through information gathering, analysis and meetings with members of the manufacturing, commercial, sales, logistics, finance, legal and other teams across the organization.
The Company's ERM Committee is designated with the responsibility to direct our risk management program and to execute our risk management strategy, including cyber and technology risk. The Audit Committee is primarily responsible for the risk oversight function and regularly reports to the full Board on the enterprise risks, including on management’s cybersecurity and risk management process. The ERM Committee reports directly to the Audit Committee on risk management matters and management regularly provides reports to the Audit Committee and the full Board. We believe that our leadership structure supports the Board’s risk oversight.
Code of Ethics
The Chief Executive Officer, the Chief Financial Officer, the principal accounting officer, the treasurer and persons performing similar functions, are subject to our Code of Ethics for CEO and Senior Financial Officers. Additionally, we and each of our subsidiary companies have adopted a Code of Conduct applicable to all of the employees, officers and directors of the Company and its subsidiaries.
Our Code of Ethics for CEO and Senior Financial Officers and Code of Conduct are available on our website at www.lsbindustries.com. We will post any amendments to these documents, as well as any waivers that are required to be disclosed pursuant to the rules of either the SEC or the NYSE, on our website (to the extent applicable to the Company’s executive officers, senior financial officers or directors).
Anti-Bribery and Corruption Policy
LSB has an Anti-Bribery and Corruption Policy which memorializes our commitment to adhere faithfully to both the letter and spirit of all applicable anti-bribery legislation in the conduct of our business activities worldwide.
Compensation and Talent Management Committee
Our Compensation and Talent Management Committee (the "Compensation Committee") is comprised of non-employee, independent directors in accordance with the rules of the NYSE. During 2024, the Compensation Committee held five meetings.
The Compensation Committee’s responsibilities include, among other duties:
|
|
LSB Industries, Inc. Proxy Statement 38 |
Recommendations regarding non-equity compensation of our non-executive officers and our NEOs are made by our CEO, other than decisions related to the CEO’s own compensation, and are presented for discussion with the Compensation Committee.
During 2024, the agenda for meetings of the Compensation Committee was determined by its Chairman with the assistance of our CEO. Compensation Committee meetings are regularly attended by the CEO. The Compensation Committee also meets regularly in executive session without the CEO. The Compensation Committee may delegate authority to the CEO in order to fulfill certain administrative duties regarding the executive compensation program.
The Compensation Committee has authority under its charter to retain, approve fees for, and terminate advisors, consultants and agents as it deems necessary to assist in the fulfillment of its responsibilities. If a compensation consultant is engaged, the Compensation Committee reviews the total fees paid to such outside consultant by the Company to ensure that the consultant maintains its objectivity and independence when rendering advice to the Compensation Committee. During 2024, the Compensation Committee retained Compensation Strategies, Inc. ("Compensation Strategies") as its independent compensation consultant to advise the Compensation Committee on matters related to executive and non-employee director compensation. For information regarding the compensation consultant, please see page 44 regarding the "Executive Compensation — Compensation Discussion and Analysis-Use of Compensation Consultant" in this Proxy Statement.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee has the authority to determine the compensation of all of our officers. The Compensation Committee considered the recommendations of the CEO when setting the compensation of our officers. During 2024, the CEO did not make any recommendation regarding the CEO’s own compensation. None of the members of the Compensation Committee is an officer or employee of the Company or any of its subsidiaries or had any relationship requiring disclosure by the Company under Item 404 of Regulation S-K during 2024. No executive officer of the Company served on any board of directors or compensation committee of any other company for which any of our directors served as an executive officer at any time during 2024.
CEO and Key Management Succession Planning
Our Board recognizes the importance of identifying and developing executive talent to ensure we continue to have effective executive leadership in place. The Board delegates to the Compensation Committee the responsibility to review and discuss with management our succession planning for key executive officers. At least annually, the Board reviews the Company’s leadership pipeline and talent and management succession planning with the CEO. Our CEO and executive team continue to review potential successors for key executive positions, identifying and assessing each potential successor’s relevant experience, strengths and skills as well as any areas where additional development may better prepare an individual for a future role. We work to implement appropriate development plans to address any gaps in skills or other attributes of such successors to ensure that potential successors are well-equipped for the role to which they might be elevated. Our CEO then meets with our Board in executive session to discuss and provide recommendations and assessments of potential successors for key executive positions. Our independent directors also meet in executive sessions to discuss and plan for CEO succession. Our Board makes sure it has sufficient opportunities to meet with and
|
|
LSB Industries, Inc. Proxy Statement 39 |
assess development of potential CEO and key executive successors, including through management presentations to the Board and committees and attendance at Board meetings.
Board Independence
At least annually, the Board receives a report on all commercial, consulting, legal, accounting, charitable or other business relationships that a director or the director’s immediate family members have with the Company and its subsidiaries. This report includes all ordinary course transactions with entities with which the directors are associated.
As a result of its review process, the Board affirmatively determined that 9 of its 10 directors are independent. The only member of the Board who is not independent is Mr. Behrman, who is the Chairman, President and Chief Executive Officer of the Company.
Communication with the Board
Our Board believes that it is important for us to have a process whereby stockholders may send communications to the Board. Stockholders and interested parties who wish to communicate with the Board, the Chairman, the independent directors as a group, or a particular director, may do so by sending a letter to the Chairman of the Board of Directors at 3503 NW 63rd Street, Suite 500, Oklahoma City, Oklahoma 73116. Please indicate on the mailing envelope a clear notation indicating that the enclosed letter is a "Stockholder-Board Communication" or "Stockholder-Director Communication." All such letters must identify the author as a stockholder or an interested party and clearly state whether the intended recipients are all members of the Board, the Chairman, the independent directors, non-management directors, or only certain specified individual directors. The Chairman will make copies of all such letters and circulate them to the appropriate director or directors.
We have adopted a formal written policy for the review, approval and ratification of transactions with related parties. The policy covers transactions between the Company and our senior officers, directors, director nominees, 5% stockholders, any person who is an immediate family member of any of the foregoing persons and any entity that is owned or controlled by any of the foregoing persons or in which a person listed above has a substantial ownership interest. The policy generally applies to any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which (i) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (ii) the Company is a participant and (iii) any related party has or will have a director or indirect interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity) .Pursuant to the policy, any anticipated or contemplated transaction between us and a related party are initially reviewed for approval by our Management Executive Committee (the “Executive Committee”). The Executive Committee then submits its recommendation to the Audit Committee for final approval or disapproval. In determining whether to approve or ratify a transaction, the Audit Committee takes into account, among other factors it deems appropriate, (i) whether there is an appropriate business justification for the transaction, (ii) the benefits that accrue to LSB as a result of the transaction, (iii) whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances, (iv) the
|
|
LSB Industries, Inc. Proxy Statement 40 |
extent of the Related Party’s interest in the transaction, (v) whether the transaction is material to the Company, (vi) the effect of the transaction on a director’s independence (if the related person is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer), (vii) the availability of other sources for comparable products or services, (viii) whether it is a single transaction or a series of ongoing related transactions and (ix) whether entering into the transaction would be consistent with our Code of Ethics and Code of Conduct.
During 2024, LSB did not have any related party transactions requiring review by the Audit Committee or the Board as a whole.
|
|
LSB Industries, Inc. Proxy Statement 41 |
Our Named Executive Officers
MARK T. BEHRMAN |
|
Mr. Behrman, age 62, became our Chairman and Chief Executive Officer in August 2024. He previously served as the Company’s President and Chief Executive Officer from December 30, 2018 through August 2024, as the Company’s Executive Vice President and Chief Financial Officer from June 2015 to December 2018 and as Senior Vice President of Corporate Development from March 2014 to June 2015. Mr. Behrman’s biographical information is set forth on page 14 of this Proxy. |
CHERYL A. MAGUIRE |
|
Ms. Maguire, age 47, became the Company’s Executive Vice President and Chief Financial Officer in January 2020. She was previously the Company’s Senior Vice President and Chief Financial Officer. She joined the Company as Vice President, Financial Planning and Accounting in November 2015. She has more than 20 years of financial and accounting experience across manufacturing and energy industries. Prior to joining the Company, Ms. Maguire served as a Senior Manager of financial planning and analysis with LyondellBasell, a large international plastics, chemicals and refining company, from July 2012 to June 2015. Ms. Maguire was previously head of external reporting, corporate accounting, accounting policy and financial analysis at Petroplus, a European Refining company. During her career, Ms. Maguire was integral to the financial integration of large-scale acquisitions, the execution of multiple debt and equity transactions and the implementation of several corporate restructurings and business turnarounds. She began her career at Grant Thornton LLP. Ms. Maguire holds a Bachelor of Business Administration from the University of Prince Edward Island and is a certified public accountant. |
MICHAEL J. FOSTER |
|
Mr. Foster, age 58, became the Company’s Executive Vice President, General Counsel and Secretary on December 30, 2018. He joined the Company as Senior Vice President, General Counsel and Secretary in January 2016. Immediately prior to joining the Company, Mr. Foster was engaged in the private practice of law. From 2007 to 2014 Mr. Foster served as the Senior Vice President, General Counsel and Secretary for Tronox (NYSE:TROX), a global mining and manufacturing firm. Before his appointment as the Tronox General Counsel, Mr. Foster served as its Managing Counsel leading the operations of the Tronox legal team following its spin-off from Kerr-McGee Corporation. Prior to the Tronox spin-off, Mr. Foster served as a member of the Kerr-McGee legal team. His earlier experience includes nearly five years in the midstream energy industry and more than five years in the public and private practice of law. Mr. Foster holds a Bachelor of Science degree in Agriculture Science from the University of Illinois Urbana-Champaign and a Juris Doctor degree from the University of Tulsa. |
|
|
|
|
|
LSB Industries, Inc. Proxy Statement 42 |
SCOTT D. BEMIS |
|
Mr. Bemis, age 55, became the Company’s Executive Vice President, Manufacturing in May 2024. Mr. Bemis has more than 32 years of experience in chemical manufacturing, including leadership roles with Dow Chemical Company and DuPont Water and Protection. Most recently, he served as the Kemerton Site Director for Albemarle Energy Storage from 2023 to May 2024 and as the Richburg MegaFlex Site Director from 2022 to 2023, Site Director for DuPont’s Spruance site from 2021 to 2022 and Integrated Operations Leader for Dupont’s Water and Protection business from 2020 to 2021.Mr. Bemis brings with him broad experience in leading large manufacturing teams, research and development (R&D), large capital projects, reliability, maintenance, environmental, health and safety (EH&S) and regulatory functions. Mr. Bemis holds a Master of Business Administration from the University of Houston – Clear Lake and a Bachelor of Science in Chemical Engineering from the University of Arizona.
|
|
|
|
DAMIEN J. RENWICK |
|
Mr. Renwick, age 48, became the Company’s Executive Vice President and Chief Commercial Officer in January 2021. Mr. Renwick has more than 17 years of experience in the chemical industry, most recently with Houston-based Cyanco where he was President of Cyanco International and held the additional position of Chief Commercial Officer. Prior to this, Mr. Renwick was with Perth, Australia-based Wesfarmers Limited, one of Australia’s largest listed companies. There he held various positions of increasing responsibility in the Chemicals, Energy and Fertilizers division, including Director and General Manager of Australian Gold Reagents, and Commercial Manager, Ammonium Nitrate. Mr. Renwick has led and executed multiple significant commercial transactions to underpin large-scale capital investment projects, led large improvements in operating and safety performance of product on plants and been deeply involved in numerous capital growth projects and acquisition and divestment transactions and evaluations. He began his career with Arthur Andersen in its consulting division. Mr. Renwick holds a Bachelor of Engineering (Honors) and a Bachelor of Commerce from the University of Western Australia. |
|
|
|
KRISTY D. CARVER |
|
Ms. Carver, age 57, became the Company’s Senior Vice President and Treasurer in January 2019. She has over 35 years of extensive experience in financial, accounting and tax across the manufacturing and financial services industries. She joined the Company as Vice President in 2008 and was appointed Vice President and Treasurer in January 2014. Prior to joining the Company, Ms. Carver was a Senior Vice President at IBC Bank (formerly known as Local Oklahoma Bank) primarily focused on strategic tax planning, compliance, reporting and supervising multi-year tax litigation arising from certain government assisted acquisitions and related matters. Ms. Carver began her career at Arthur Andersen LLP and is a certified public accountant. Ms. Carver holds a Bachelor of Science in Accounting from the University of Central Oklahoma.
|
|
|
LSB Industries, Inc. Proxy Statement 43 |
Executive Compensation
Compensation Discussion and Analysis
Overview of Executive Compensation Program
This Compensation Discussion and Analysis describes our compensation philosophy, objectives, policies and practices framed within the context of the chemical manufacturing industry, our specific strategy and the performance of our NEOs for 2024.
Our NEOs for 2024 were:
Mark T. Behrman |
Chairman and Chief Executive Officer |
Cheryl A. Maguire |
Executive Vice President and Chief Financial Officer |
Michael J. Foster |
Executive Vice President, General Counsel and Secretary |
Damien J. Renwick |
Executive Vice President and Chief Commercial Officer |
Kristy D. Carver |
Senior Vice President and Treasurer |
John P. Burns(1) |
Vice President of Special Projects |
Compensation Principles
Our executive compensation program ties strategy and performance to compensation, including equity-based compensation. This is intended to focus our executive team on the long-term success of the Company and to further align their interests with the interests of our stockholders. Our executive compensation program is designed to assist us in attracting, motivating and retaining exceptional talent with skills across a diverse set of capabilities. This allows us to continue improving our operational and financial performance, which is essential to achieving the long-term success of our business and the sharing our success with our customers, stockholders and other stakeholders.
The following principles guide the Compensation Committee in the management, design, and administration of our executive compensation program, while supporting the core value of our compensation philosophy of pay-for-performance:
The following table summarizes how we seek to achieve our compensation principles, and highlights key risk-mitigating features incorporated into our processes and programs:
Compensation Plan Design
✓ |
Executive compensation program is simple and transparent; |
✓ |
Compensation is balanced between fixed and variable compensation, with a significant part of NEO total direct compensation (salary plus annual incentive plus long-term incentive) being at-risk; |
✓ |
Level of fixed compensation is designed to promote retention; |
✓ |
Performance targets are derived from LSB’s annual business plan and longer-term strategic business plan objectives; |
✓ |
Long-term incentive plan has threshold performance levels (below which payouts are not made) and is capped at two times target payout; |
✓ |
Total direct compensation is benchmarked versus relevant peers while also considering internal equity and other factors; and |
✓ |
Judgment is applied to address individual circumstances. |
|
|
LSB Industries, Inc. Proxy Statement 44 |
Corporate Governance
✓ |
Independent Compensation Committee oversees all aspects of executive compensation to assess potential impact on business risk (including human resource risk); |
✓ |
Compensation Committee retains an independent compensation consultant; |
✓ |
Incentive Compensation Recoupment Policy (the "Recoupment Policy") applies to incentive-based compensation; |
✓ |
NEOs are subject to mandatory Management Stock Ownership Guidelines; |
✓ |
Directors and officers are subject to an insider trading and anti-hedging and pledging policy; |
✓ |
Double trigger change in control provisions, requiring both a change in control and a qualifying termination of the executive’s employment, are embedded in employment contracts and long-term incentive plans; and |
✓ |
Stockholders have an annual "say on pay" vote. |
The Compensation Committee reviews and recommends to the Board the compensation philosophy, strategy and principles, and program design, as well as oversees the administration of our executive compensation plans, policies and programs.
The Compensation Committee is composed of independent directors who have been determined by the Board to possess human capital literacy, meaning an understanding of compensation theory and practice, human resources management and development, succession planning and executive development. Such knowledge and capability includes: (i) current or prior experience working as a chief executive or senior officer of a major organization (which provides significant financial and human resources experience), (ii) involvement on board compensation committees of other entities, (iii) experience and education pertaining to financial accounting and reporting, which is integral to managing executive incentive compensation, and/or (iv) familiarity with internal financial controls. This knowledge and experience, in conjunction with a comprehensive compensation decision-making process and the support of its independent compensation consultant, enables the Compensation Committee to formulate informed compensation decisions or recommendations for Board approval. One of the primary purposes of the Compensation Committee is to assist the Board in fulfilling its oversight responsibilities for executive compensation. Together with the Board, the Compensation Committee is committed to getting LSB’s approach to human capital and talent management matters and compensation right, both for stockholders and for the Company’s long-term success. The executive compensation elements of our Compensation Committee’s charter focus on:
To support the decision-making process, the Compensation Committee receives input from management and an independent compensation consultant. The Compensation Committee considers the data provided by and the advice of its independent compensation consultant, as well as many other factors. Ultimately, all decisions and recommendations to the Board are the Compensation Committee’s own. The Compensation Committee reviews the performance goals for the CEO, assesses the CEO’s performance, and makes compensation recommendations for the CEO to the other independent members of the Board for approval. With respect to the other executive officers, the CEO’s assessment of their performance is taken into account by the Compensation Committee when making compensation recommendations to the Board. The Compensation Committee reviews and approves the compensation structure and evaluation process for the CEO and the executives who report directly to the CEO.
Executive Compensation Program Risk Management
We endeavor to mitigate executive compensation risk through appropriate oversight of our executive compensation program, through our executive compensation plan design (as outlined below) and through our corporate governance policies. We also seek to motivate certain behaviors that encourage appropriate
|
|
LSB Industries, Inc. Proxy Statement 45 |
risk-taking to drive performance in accordance with our risk profile. As part of its risk management role, the Compensation Committee:
Our executive compensation program is designed to provide competitive levels of reward that are responsive to Company and individual performance but do not incentivize risk taking that is reasonably likely to have a material adverse effect on the Company. In reaching the conclusion that our executive compensation program does not create risks that are reasonably likely to have a material adverse effect on us, the Compensation Committee examined the various elements of our executive compensation program and our risk mitigation controls. In particular, numerous factors were considered, including:
Specific corporate governance policies related to compensation risk management include the following:
|
|
LSB Industries, Inc. Proxy Statement 46 |
These policies are available for review at:
https://investors.lsbindustries.com/corporate-governance-highlights
Compensation Philosophy –
How Executive Pay is Linked to Company Performance
Our executive compensation program is designed to incentivize and motivate our executive officers to lead and manage our business well over the long-term, to drive performance improvements, and to increase stockholder value. It is also designed to enable us to compete effectively with other companies in attracting, motivating and retaining talented executives.
The incentive compensation elements of our program are designed to align closely the financial interests of our executives with those of our stockholders. We believe the portion of compensation that is at-risk and tied to organization-wide performance metrics should increase as the level of responsibility increases.
Because of the inherent risk in chemical operations, we place a high priority on our leaders to create, maintain and reinforce a strong safety culture. Because of the environmental risks in our business, we also place a high priority on managing our operations responsibly and sustainably.
We regularly assess how our executive compensation program compares to companies with a similar profile to ours. Our objective is to deliver compensation at a competitive market level that will enable executive officers who demonstrate consistent performance over a multi-year period to earn compensation that is competitive and consistent with or above targeted total compensation. Conversely, the program is designed to pay less than the annual target compensation when performance does not meet expectations. Individual executive compensation may be above or below the annual targeted compensation level, based on our performance; economic and market conditions; the individual’s performance, contribution to the organization, experience, expertise, and skills; and other relevant factors. Please see the discussion of our Compensation Framework below for further information.
Compensation Framework
In accordance with our compensation philosophy, the salary and benefits for executive officers provide the secure fixed compensation component that the Compensation Committee feels is necessary to attract and retain key executive talent. The combination of annual and long-term incentives is designed to motivate the execution of our business strategy in a manner that creates stockholder value while retaining executive talent and aligning our executives' interests with those of our stockholders.
The three elements of total direct compensation for our NEOs are: (i) base salary, (ii) short-term incentive awards and (iii) long-term incentive awards. Unlike base salary, which is fixed annually, short-term and long-term incentive awards each represent variable, at risk, compensation. These three elements are balanced such that a portion of each NEO’s compensation is contingent on performance over both the short and longer-term. The Compensation Committee has adopted and implemented core principles that form the framework for our executive compensation program. We believe that the Company’s executive compensation program clearly aligns executive compensation opportunities with our Company’s long-term strategic plan and provide accountability for long-term results.
The combination of the fixed and at-risk compensation components provides our executives with a competitive compensation package that is designed to meet our needs and the expectations of our stockholders. Our 2024 compensation elements included:
|
|
LSB Industries, Inc. Proxy Statement 47 |
Compensation Element |
Performance Period |
Performance Measures |
Purpose of Compensation Element |
|
|
|
|
Base Salary |
· Not applicable |
· Pay aligned with scope of responsibilities and experience |
· Provides competitive fixed pay • Attract and maintain key managerial talent |
|
|
|
|
Performance Annual Incentive Award (Short-Term Incentive) |
· 1 year |
· Environmental, Health & Safety · Financial and operational performance measures |
· Promotes achievement of shorter-term performance goals |
|
|
|
|
Equity Grants (Long-Term Incentive) |
· 3 years |
Depending on form of grant: · Time-based 50% (vesting ratably over 3 years) · Relative stock-based performance metrics 50% |
· Further align executives’ and stockholders’ interests · Retains talent with long-term wealth accumulation opportunities · Ties compensation to a longer-term performance goal, in the case of PSUs
|
|
|
|
|
Perquisites and Other Benefits |
· Not applicable |
· Not applicable |
· Allows the Company to remain competitive among its peers to attract and retain key talent |
For 2024, the pay mix, as between salary, short-term incentives and long-term incentives, is below, determined using actual amounts earned for short-term incentives and assuming target performance for long-term incentives, where applicable, and based on the grant date fair value of any equity awards.
CEO Pay Mix |
Other NEO Pay Mix |
|
|
LSB Industries, Inc. Proxy Statement 48 |
Role of Executive Officers in Compensation Decisions
Our CEO annually reviews the performance of each of our executive officers (other than himself) and provides recommendations to the Compensation Committee with respect to salary, annual incentive award, equity compensation, and other benefits for such executive officers. The Compensation Committee reviews these recommendations while considering the Company’s compensation philosophy and objectives. In determining recommendations for the compensation for our CEO, the Compensation Committee reviews his responsibilities and performance. Such review includes regular meetings with our CEO, consideration of the Compensation Committee’s observations of his performance during the applicable year, and overall Company performance against short-term and long-term goals. When appropriate, executive officers are invited by the Compensation Committee to provide insight regarding Company and individual performance and feedback regarding compensation structure. Executive officers are not present at any meeting of the Compensation Committee while their own compensation is being discussed or determined.
Compensation Peer Group
LSB benchmarks executive officer compensation levels using a peer group of companies (the "Compensation Peer Group"). The Compensation Committee annually commissions its independent compensation consultant to review the criteria and composition of the peer group. The Compensation Peer Group utilized in making the compensation decisions for 2024 was composed of the following companies:
Advansix Inc.
American Vanguard Corporation
Balchem Corporation
Compass Minerals International, Inc.
CSW Industrials, Inc.
CVR Partners, LP
Ecovyst, Inc.
Hawkins, Inc.
Ingevity Corporation
Intrepid Potash, Inc.
Orion Engineered Carbons S.A.
Quaker Chemical Corporation
REX American Resources Corp.
Rogers Corporation
US Silica Holdings, Inc.
Overall, the Compensation Committee uses a number of factors when determining compensation for each executive, including a broad range of market data, corporate performance, executive performance, and competitive labor conditions, among others.
The Compensation Committee, in consultation with its independent compensation consultant, evaluates the composition of the Compensation Peer Group by evaluating, among other things, the industry or business models, annual revenues, market capitalization, and geographic locations of potential Compensation Peer Group companies, as well as those companies that are perceived competitors for talent.
Setting Executive Compensation
The Compensation Committee annually sets cash and non-cash executive compensation to reward the executive officers for achievement of, and to motivate the executive officers to achieve, near-term and long-term business objectives. The Compensation Committee also reviews the compensation information of our Compensation Peer Group companies. As described in more detail below, in 2024, the Compensation Committee engaged Compensation Strategies as its independent compensation consultants to assist the Compensation Committee in conducting its review of our executive compensation program. The information provided by the independent compensation consultant is used to determine how our executive compensation
|
|
LSB Industries, Inc. Proxy Statement 49 |
program compares to those of our Compensation Peer Group and the market generally, as further described below.
In setting compensation, the Compensation Committee also considers the allocation between cash and non-cash compensation amounts, and near-term and long-term compensation, but does not have a specific formula or required allocation between such compensation types. In each case, such allocation is considered as part of the overall compensation determination.
During 2024, the Compensation Committee compared the CEO’s total compensation to the total compensation of our other executive officers. However, the Compensation Committee has not established a target ratio between total compensation of the CEO and the median total compensation level for the next lower tier of management. The Compensation Committee also considers internal pay equity among the executive officers, the relationship between the executive officers, and average compensation of all employees to maintain compensation levels that are consistent with the individual contributions and responsibilities of those executive officers. The Compensation Committee does not consider amounts payable under severance agreements when setting the annual compensation of the executive officers.
Base Salary
The Compensation Committee annually reviews and adjusts salaries based on changes in the market, including Compensation Peer Group data, responsibilities and performance against job expectations, strategic importance and experience and tenure. The following table sets forth the base salaries for each of our NEOs as of the end of 2024. The Compensation Committee, based upon its annual review and overall market conditions, approved increases to the base salaries of each of our NEOs for 2025. The increases went into effect on March 29, 2025.
Named Executive Officer |
|
2024 |
|
|
|
2025 |
|
|
||
Mark T. Behrman |
|
$ |
747,000 |
|
|
|
$ |
800,000 |
|
|
Cheryl A. Maguire |
|
$ |
438,000 |
|
|
|
$ |
453,000 |
|
|
Michael J. Foster |
|
$ |
434,000 |
|
|
|
$ |
450,000 |
|
|
Kristy D. Carver |
|
$ |
333,000 |
|
|
|
$ |
345,000 |
|
|
Damien J. Renwick |
|
$ |
390,000 |
|
|
|
$ |
425,000 |
|
|
John P. Burns |
|
$ |
285,000 |
|
|
|
$ |
180,000 |
|
|
Short-Term (Annual) Incentive Plan
Executive officers participate in the Company’s Short-Term Incentive Plan (the "STI Plan"), our annual performance bonus plan. The STI Plan provides the opportunity for annual cash payments tied directly to the achievement of key pre-established financial and operational goals. The Compensation Committee sets goals derived from our strategic plan that are designed to further align the interests of our executive officers with the interests of our stockholders.
Our STI Plan is a key element in supporting our pay-for-performance philosophy. Each executive officer’s annual incentive opportunity is determined by performance in up to three categories, with an emphasis on key operating and financial metrics:
Annual incentive targets are set as a percentage of salary, with actual payouts based on a performance multiplier dependent on the achievement of predetermined annual goals. The annual incentive targets for Messrs. Behrman, Burns, and Foster and Ms. Maguire were established in their respective employment agreements. Mr. Renwick’s payout target was established upon his beginning employment with the Company. Ms. Carver’s payout target was established at the beginning of 2024. At the end of each year, the Compensation Committee determines the actual achievement of each performance goal. The Compensation Committee and the Board have the ability to apply informed judgment to adjust outcomes based on market, operational and other realities that may not have been contemplated in the scorecard formula. In 2024, the Compensation Committee exercised its judgment and adjusted the STI by applying a multiplier between 1.01 and 1.26 to the bonus amounts earned based on the achievement of the annual goals described above and below.
|
|
LSB Industries, Inc. Proxy Statement 50 |
Category |
Performance Metric |
Environmental, Health & Safety performance |
Achieve Total Recordable Injury Rate (TRIR) company-wide Achieve Process Safety Tier I Incidents (PSI) company-wide Achieve Reportable Environmental Events company-wide |
LSB Corporate Financial Performance |
Achieve Adjusted EBITDA at budget |
Production Rates |
Achieve NH3 production at budget |
NEO |
2024 Salary |
|
Target Annual Incentive (% of Salary) |
Safety & Environmental Performance |
Adjusted |
NH3 Production |
Overall Multiplier |
Overall Payout (% of Target) |
2024 STI Plan Payout |
|
|||||
|
|
|
|
Weight |
Weighted Payout (1) |
Weight |
Weighted Payout (2) |
Weight |
Weighted Payout (3) |
|
|
|
|
||
Mark T. Behrman |
$ |
747,000 |
|
110% |
25% |
4% |
50% |
48% |
25% |
0% |
116% |
61% |
$ |
501,000 |
|
Cheryl A. Maguire |
$ |
438,000 |
|
75% |
25% |
4% |
50% |
48% |
25% |
0% |
116% |
61% |
$ |
200,000 |
|
Michael J. Foster |
$ |
434,000 |
|
70% |
25% |
4% |
50% |
48% |
25% |
0% |
101% |
53% |
$ |
161,000 |
|
Kristy D. Carver |
$ |
333,000 |
|
50% |
25% |
4% |
50% |
48% |
25% |
0% |
117% |
61% |
$ |
102,000 |
|
Damien J. Renwick |
$ |
390,000 |
|
70% |
25% |
4% |
50% |
48% |
25% |
0% |
126% |
66% |
$ |
181,000 |
|
John P. Burns |
$ |
285,000 |
|
60% |
25% |
4% |
50% |
48% |
25% |
0% |
102% |
54% |
$ |
92,000 |
|
annual bonus.
annual bonus.
annual bonus.
Long-Term (Equity) Incentive Plan
We award long-term performance equity awards to our executive officers under the terms of the 2016 LTIP, as amended and restated March 4, 2021 that was approved by stockholders at the 2021 annual meeting of stockholders. The Compensation Committee, with the input of its independent compensation consultant, designed the 2016 LTIP to further align executive officer compensation with stockholders’ interests and to serve as a retention tool. The Compensation Committee believes the 2016 LTIP allows us to continue to motivate our executive officers through the grant of equity-based awards and provides the Compensation Committee flexibility to grant different types of equity, equity-based, and cash awards in the future.
The Compensation Committee evaluates each executive officer’s performance on an annual basis and grants equity awards, and, for each executive officer, determines the allocation between time-based grants and performance-based grants.
Both the time-based and the performance-based awards generally vest over a three-year period. Time-based awards, in the form of restricted stock units, vest one-third on each of the first three anniversaries of the date of grant. Performance-based awards, in the form of performance-based restricted stock units, vest after the end of the three-year performance measurement period. We believe both award types link the value of payments to the long-term results of the Company.
|
|
LSB Industries, Inc. Proxy Statement 51 |
The 2024 grants for each of our NEOs included performance-based and time-based restricted stock units. The performance metric for the 2024 performance-based grants was total shareholder return (TSR) relative to a peer group measured annually over a three-year performance period. The peer group utilized for relative TSR ranking included the following companies: Advansix, American Vanguard, The Andersons, CF Industries, Chemtrade Logistics, Compass Minerals, CVR, Ecovyst, ICL Group, Intrepid Potash, Methanex, Mosaic, Nutrien, OCI, and Yara International. The Compensation Committee determined that this performance metric was a good measure of overall Company performance. For performance on the relative TSR metric that is above the threshold, vesting will result in a range of 50%-200% of the target vesting, except the payout will be capped at target if our TSR for the three-year period is negative.
Perquisites and Other Personal Benefits
The Compensation Committee believes that perquisites and personal benefits can be an appropriate component of total compensation that can contribute to our ability to attract and retain talented executives. Accordingly, the Company provided our NEOs with limited perquisites and personal benefits in 2024 that were consistent with our overall executive compensation program, including an automobile allowance for Mr. Behrman, Ms. Carver, Mr. Foster and Mr. Renwick and country club dues for Mr. Behrman.
The Compensation Committee periodically reviews the levels of perquisites provided to the NEOs to determine whether such perquisites are consistent with our compensation policies.
Consideration of Stockholder Say-On-Pay Advisory and Say-on-Frequency Votes |
|
At our annual meeting of stockholders held in May 2024, approximately 94% of the total votes cast on our say-on-pay proposal approved the compensation of our NEOs on a non-binding, advisory basis. The Compensation Committee and the Board believe that this affirms our stockholders’ support of our approach to executive compensation and did not make any changes as a direct result of this vote. Any concerns and comments raised by our stockholders related to our executive compensation program are considered by the Compensation Committee as it completes its periodic reviews of our executive compensation program and considers any potential changes to the program. |
|
The Compensation Committee will continue to consider feedback it receives from stockholders and proxy advisory firms when making future compensation decisions for our NEOs, including when negotiating any future employment agreements. |
|
In accordance with the advisory vote on the frequency of the stockholder advisory vote on executive compensation submitted to the stockholders at the Company annual meeting of stockholders held in May 2024, the Company will continue to hold a stockholder advisory vote on executive pay on an annual basis until the next required advisory vote on the frequency of such votes which, in accordance with applicable law, will occur no later than the Company’s 2029 annual meeting. |
Use of Compensation Consultants
The Compensation Committee has the sole authority to hire and terminate its independent compensation consultant, approve its compensation, determine the nature and scope of its services, and evaluate its performance. In 2024, the Compensation Committee engaged Compensation Strategies as its independent compensation consultant to provide information to the Compensation Committee to assist it in making determinations regarding our executive compensation program for our executive officers and non-employee directors.
In August and November 2024, Compensation Strategies provided the Compensation Committee with, among other things, a competitive pay analysis comparing the compensation of our executive officers against peer group compensation statistics, 2025 program design advice, an independent review of 2025 compensation proposals developed by management, comparative analysis of non-employee director compensation, including compensation for the regular and special committees of the Board, review of trends and regulatory developments, and assistance with peer group review.
|
|
LSB Industries, Inc. Proxy Statement 52 |
A representative from Compensation Strategies attended the January, March, May, August, and November meetings of the Compensation Committee during 2024. Compensation Strategies did not perform any services for the Company or its management other than those described above.
Compensation Strategies provides information and data to the Compensation Committee from its surveys, proprietary databases and other sources, which the Compensation Committee utilizes along with information provided by management and obtained from other sources. In making its decisions, the Compensation Committee reviews such information and data provided to it by Compensation Strategies and management and also draws on the knowledge and experience of its members as well as the expertise and information from within the Company, including from the Company’s human resources, legal, and finance groups. The Compensation Committee considers executive and non-employee director compensation matters at its quarterly meetings and at special meetings as needed based on our annual compensation schedule.
In connection with its engagement of Compensation Strategies, the Compensation Committee considered various factors bearing upon Compensation Strategies’ independence including, but not limited to, the amount of fees received by Compensation Strategies from the Company as a percentage of Compensation Strategies’ total revenue, Compensation Strategies’ policies and procedures designed to prevent conflicts of interest, and the existence of any business or personal relationship that could impact Compensations Strategies’ independence. After reviewing these and other factors, the Compensation Committee determined that Compensation Strategies is independent and that its engagement did not present any conflicts of interest. In 2024, we paid Compensation Strategies for the services it provided to the Compensation Committee.
Equity Award Timing Policy
We do not currently grant awards of stock options, stock appreciation rights, or similar option-like instruments. Accordingly,
Employment Agreements
The Compensation Committee believes that executive employment agreements are an integral component of our competitive executive compensation program. Our employment agreements are an important risk management tool that creates continuity in severance and other benefits upon certain termination events. Mr. Behrman, Ms. Maguire, Mr. Foster and Mr. Burns are each a party to an executive employment agreement in the Company’s standard form, which was implemented in 2018. Mr. Renwick is not party to an employment or severance agreement with the Company. Ms. Carver is not a party to an employment agreement but she is party to a severance and change in control agreement.
Mark T. Behrman
2018 Behrman Agreement—On December 30, 2018, we entered into an employment agreement with Mr. Behrman. The employment agreement provides, in part, that Mr. Behrman will:
Following his termination of employment, Mr. Behrman will be subject to non-competition and non-solicitation restrictions for a period of 24 months. For information regarding the provisions of the agreement related to change in control and severance payments, please see "Potential Payments Upon Termination or Change in Control" on page 61.
|
|
LSB Industries, Inc. Proxy Statement 53 |
Michael J. Foster
2018 Foster Agreement—On December 30, 2018, we entered into an employment agreement with Mr. Foster. The agreement provides, in part, that Mr. Foster will:
Following his termination of employment, Mr. Foster will be subject to non-competition and non-solicitation restrictions for a period of 24 months. For information regarding the provisions of the agreement related to change in control and severance payments, please see "Potential Payments Upon Termination or Change in Control" on page 61.
Cheryl A. Maguire
2018 Maguire Agreement—On December 30, 2018, we entered into an employment agreement with Ms. Maguire. The agreement provides, in part, that Ms. Maguire will:
Following her termination of employment, Ms. Maguire will be subject to non-competition and non-solicitation restrictions for a period of 24 months. For information regarding the provisions of the agreement related to change in control and severance payments, please see "Potential Payments Upon Termination or Change in Control" on page 61.
John P. Burns
2019 Burns Agreement—On December 20, 2019, we entered into an employment agreement with Mr. Burns. The agreement provides that Mr. Burns will:
Following his termination of employment, Mr. Burns will be subject to non-competition and non-solicitation restrictions for a period of 24 months. For information regarding the provisions of the agreement related to change in control and severance payments, please see "Potential Payments Upon Termination or Change in Control" on page 61.
During 2024, Mr. Burns resigned from his role as Executive Vice President of Manufacturing but continued to serve the Company as Vice President of Special Projects. Mr. Burns retired from all positions at the Company on April 1, 2025.
|
|
LSB Industries, Inc. Proxy Statement 54 |
Kristy D. Carver
2020 Carver Severance and Change in Control Agreement—On March 31, 2020, we entered into a severance and change in control agreement with Ms. Carver, the provisions of which are described in “Potential Payments Upon Termination or change in Control” below.
Management Stock Ownership Requirements
The Compensation Committee has established Management Stock Ownership Requirements that are intended to further align the interests of our executive officers with the interests of our stockholders by requiring the executive officers to hold specified levels of Company stock. In keeping with our overall compensation philosophy, we believe that the equity ownership levels that they are required to maintain are high enough to appropriately incentivize our executive officers’ commitment to long-term value creation. The Compensation Committee evaluates the Management Stock Ownership Requirements at least annually. The terms of our Management Stock Ownership Requirements are set out below:
Term |
Component/Description |
|
|
Position |
Requirements(1) |
|
Chief Executive Officer |
5x base salary |
Target Ownership Amount(1) |
Chief Financial Officer |
3x base salary |
|
Other Executive Officers |
3x base salary |
Shares Counted Towards Ownership |
• Shares owned outright or held in trust • Time-based vesting restricted stock units • The target number of any performance shares or units |
|
Compliance Period |
• The later of April 26, 2022 or five years from hire/promotion into covered role |
|
Tracking Achievement |
• Measure compliance on December 31 each year using 90-trading day average stock price • Notify participants and Compensation Committee of compliance/progress towards meeting guidelines |
|
Controls |
• Once the guideline is met, participants are expected to maintain share ownership pursuant to the guideline thereafter • Should a participant who previously met the guideline subsequently fall below the guideline for any reason, they will be required to meet the guideline within two years |
|
As of December 31, 2024, each of our NEOs met or exceeded the stock ownership guidelines.
Tax and Accounting Implications
When setting executive compensation, we consider many factors, such as attracting and retaining executives and providing appropriate performance incentives. We also consider the after-tax cost to the Company in establishing executive compensation program, both individually and in the aggregate, but tax deductibility is not our sole consideration. Section 162(m) of the Internal Revenue Code generally disallows a federal income tax deduction to public companies for annual compensation over $1 million (per individual) paid to their chief executive officer, chief financial officer, and the next three most highly compensated executive officers (as well as certain other executive officers whose compensation may have been subject to this limitation in prior tax years). As a result, we do not expect the compensation payable to covered employees, including our NEOs, in excess of $1 million per person in a year to be fully deductible and we have paid and will continue to pay compensation that is limited in deductibility, in whole or in part.
|
|
LSB Industries, Inc. Proxy Statement 55 |
We consider the accounting impact reflected in our financial statements when establishing the amounts and forms of executive compensation. We account for stock-based incentive compensation expense in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation ("FASB ASC Topic 718").
Compensation Committee Report The Compensation Committee of the Board of Directors reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based on our review and discussions, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2024. This report is provided by the following independent directors, who comprise the Compensation Committee. |
|
|
|
|
Lynn F. White (Chair) Jonathan S. Bobb Kanna Kitamura Diana M. Peninger
|
|
|
The foregoing report of the Compensation Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates this report. |
|
|
|
LSB Industries, Inc. Proxy Statement 56 |
Executive Compensation Tables
2024 Summary Compensation Table
The following table summarizes the compensation of the NEOs for 2024, 2023 and 2022 in accordance with SEC reporting rules.
Name and |
Year |
Salary |
Stock |
Non-Equity |
All Other |
Total |
|
||||||||||||||||||||||
Mark T. Behrman(4) |
|
|
2024 |
|
|
|
$ |
741,080 |
|
|
|
$ |
3,083,451 |
|
|
|
$ |
501,000 |
|
|
|
$ |
18,573 |
|
|
|
$ |
4,344,104 |
|
President and Chief |
|
|
2023 |
|
|
|
$ |
711,815 |
|
|
|
$ |
3,146,428 |
|
|
|
$ |
603,000 |
|
|
|
$ |
13,405 |
|
|
|
$ |
4,474,648 |
|
Executive Officer |
|
|
2022 |
|
|
|
$ |
669,000 |
|
|
|
$ |
2,089,578 |
|
|
|
$ |
926,120 |
|
|
|
$ |
12,815 |
|
|
|
$ |
3,697,513 |
|
Cheryl A. Maguire |
|
|
2024 |
|
|
|
$ |
434,500 |
|
|
|
$ |
556,480 |
|
|
|
$ |
200,000 |
|
|
|
$ |
1,011 |
|
|
|
$ |
1,191,991 |
|
Executive Vice President |
|
|
2023 |
|
|
|
$ |
414,174 |
|
|
|
$ |
568,923 |
|
|
|
$ |
241,000 |
|
|
|
$ |
1,052 |
|
|
|
$ |
1,225,149 |
|
and Chief Financial Officer |
|
|
2022 |
|
|
|
$ |
380,808 |
|
|
|
$ |
432,449 |
|
|
|
$ |
369,000 |
|
|
|
$ |
— |
|
|
|
$ |
1,182,257 |
|
Michael J. Foster |
|
|
2024 |
|
|
|
$ |
430,769 |
|
|
|
$ |
551,380 |
|
|
|
$ |
161,000 |
|
|
|
$ |
7,948 |
|
|
|
$ |
1,151,097 |
|
Executive Vice President, |
|
|
2023 |
|
|
|
$ |
417,585 |
|
|
|
$ |
563,583 |
|
|
|
$ |
223,000 |
|
|
|
$ |
7,800 |
|
|
|
$ |
1,211,968 |
|
General Counsel and Secretary |
|
|
2022 |
|
|
|
$ |
401,400 |
|
|
|
$ |
456,273 |
|
|
|
$ |
389,000 |
|
|
|
$ |
7,800 |
|
|
|
$ |
1,254,473 |
|
Kristy D. Carver |
|
|
2024 |
|
|
|
$ |
330,330 |
|
|
|
$ |
168,982 |
|
|
|
$ |
102,000 |
|
|
|
$ |
11,302 |
|
|
|
$ |
612,614 |
|
Senior Vice President |
|
|
2023 |
|
|
|
$ |
319,738 |
|
|
|
$ |
173,633 |
|
|
|
$ |
98,000 |
|
|
|
$ |
11,414 |
|
|
|
$ |
602,785 |
|
and Treasurer |
|
|
2022 |
|
|
|
$ |
307,438 |
|
|
|
$ |
124,255 |
|
|
|
$ |
170,240 |
|
|
|
$ |
11,222 |
|
|
|
$ |
613,155 |
|
Damien J. Renwick |
|
|
2024 |
|
|
|
$ |
387,038 |
|
|
|
$ |
495,495 |
|
|
|
$ |
181,000 |
|
|
|
$ |
8,559 |
|
|
|
$ |
1,072,092 |
|
Executive Vice President |
|
|
2023 |
|
|
|
$ |
365,808 |
|
|
|
$ |
379,304 |
|
|
|
$ |
200,000 |
|
|
|
$ |
8,939 |
|
|
|
$ |
954,051 |
|
and Chief Commercial Officer |
|
|
2022 |
|
|
|
$ |
321,923 |
|
|
|
$ |
281,496 |
|
|
|
$ |
345,500 |
|
|
|
$ |
8,379 |
|
|
|
$ |
957,298 |
|
John P. Burns(5) |
|
|
2024 |
|
|
|
$ |
286,077 |
|
|
|
$ |
372,257 |
|
|
|
$ |
92,000 |
|
|
|
$ |
— |
|
|
|
$ |
750,334 |
|
Vice President of |
|
|
2023 |
|
|
|
$ |
374,962 |
|
|
|
$ |
379,304 |
|
|
|
$ |
184,000 |
|
|
|
$ |
1,540 |
|
|
|
$ |
939,806 |
|
Special Projects |
|
|
2022 |
|
|
|
$ |
360,232 |
|
|
|
$ |
306,448 |
|
|
|
$ |
349,000 |
|
|
|
$ |
— |
|
|
|
$ |
1,015,680 |
|
(1) The amounts shown in this column represent the aggregate grant date fair value of the stock awards granted to our NEOs computed in accordance with FASB ASC Topic 718, determined without regard to estimated forfeitures. The amounts likely do not reflect the actual value that will be recognized by the NEOs. For performance-based awards that were based on TSR (in 2022, 2023 and 2024), the grant date fair value was determined based on Monte Carlo simulation whereas the grant date fair value of performance-based awards based on other performance conditions that were granted in 2022 were based on the market price of our stock at the time of the grant. For performance-based awards granted in 2024, which vesting is entirely TSR based, if the highest level of performance resulting in 200% vesting is achieved, the aggregate compensation cost recognized for these awards would be $1,870,000 for Mr. Behrman, $337,000 for Ms. Maguire, $334,000 for Mr. Foster, $226,000 for Mr. Burns, $300,000 for Mr. Renwick, and $102,000 for Ms. Carver. In accordance with accounting guidance, these amounts reflect a grant date fair value of $11.85 per share at the target number of shares.
(2) The amounts shown in this column represent the actual amounts earned under the STI Plan for fiscal year ended December 31, 2024. For further details regarding these awards, see "Executive Compensation-Compensation Discussion and Analysis-Compensation Framework-Short-Term (Annual) Incentive Plan."
(3) For 2024, "All Other Compensation" includes, among other things:
• For Mr. Behrman, an automobile allowance, club related dues, spouse airfare and meals;
• For Mr. Foster, an automobile allowance and spouse meals;
• For Mr. Renwick, an automobile allowance and spouse airfare;
• For Ms. Maguire, spouse airfare and meals; and
• For Ms. Carver, an automobile allowance, gas and auto insurance
• For Messrs. Behrman, Foster and Renwick and Ms. Carver $7,800 for an automobile allowance.
(4) All amounts shown reflect compensation paid to Mr. Behrman for his service as an executive officer. Mr Behrman did not receive additional compensation for his service as a director or Chairman of the Board.
(5) On May 6, 2024, Mr Burns retired as the Company’s Executive Vice President of Manufacturing.
|
|
LSB Industries, Inc. Proxy Statement 57 |
2024 Grants of Plan-Based Awards
The following table sets forth information concerning grants of plan-based awards to our NEOs during the fiscal year ended December 31, 2024.
|
|
|
|
|
Estimated Future Payouts |
|
Estimated Future Payouts |
|
|
|
|
|
|
|
|||||||||||||||||||
Name |
|
Grant |
Target |
|
Maximum |
|
Threshold |
Target |
|
Maximum |
|
All Other |
|
Grant |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Mark T. Behrman |
|
|
1/17/2024 |
|
|
$ |
821,700 |
|
|
$ |
1,494,000 |
|
|
|
78,901 |
|
|
|
|
157,802 |
|
|
|
315,604 |
|
|
|
157,802 |
|
|
$ |
3,083,451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Cheryl A. Maguire |
|
|
1/17/2024 |
|
|
$ |
328,500 |
|
|
$ |
525,600 |
|
|
|
14,240 |
|
|
|
|
28,479 |
|
|
|
56,958 |
|
|
|
28,479 |
|
|
$ |
556,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Michael J. Foster |
|
|
1/17/2024 |
|
|
$ |
303,800 |
|
|
$ |
607,500 |
|
|
|
14,109 |
|
|
|
|
28,218 |
|
|
|
56,436 |
|
|
|
28,218 |
|
|
$ |
551,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Kristy D. Carver |
|
|
1/17/2024 |
|
|
$ |
166,500 |
|
|
$ |
333,000 |
|
|
|
4,324 |
|
|
|
|
8,648 |
|
|
|
17,296 |
|
|
|
8,648 |
|
|
$ |
168,982 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Damien J. Renwick |
|
|
1/17/2024 |
|
|
$ |
273,000 |
|
|
$ |
390,000 |
|
|
|
12,679 |
|
|
|
|
25,358 |
|
|
|
50,716 |
|
|
|
25,358 |
|
|
$ |
495,495 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
John P. Burns |
|
|
1/17/2024 |
|
|
$ |
172,000 |
|
|
$ |
231,000 |
|
|
|
9,526 |
|
|
|
|
19,051 |
|
|
|
38,102 |
|
|
|
19,051 |
|
|
$ |
372,257 |
|
|
|
LSB Industries, Inc. Proxy Statement 58 |
2024 Outstanding Equity Awards at Fiscal Year End
The following table contains information about outstanding equity awards held by our NEOs as of December 31, 2024.
Name |
Grant Date |
Number of |
|
Market |
|
Equity Incentive |
|
Equity |
|
||||
Mark T. Behrman |
1/20/2022(4) |
|
29,645 |
|
|
225,006 |
|
|
— |
|
|
— |
|
|
1/20/2022(4) |
|
— |
|
|
— |
|
|
29,646 |
|
|
225,013 |
|
|
1/25/2023(5) |
|
63,642 |
|
|
483,043 |
|
|
— |
|
|
— |
|
|
1/25/2023(6) |
|
— |
|
|
— |
|
|
95,462 |
|
|
724,557 |
|
|
1/17/2024(7) |
|
157,802 |
|
|
1,197,717 |
|
|
— |
|
|
— |
|
|
1/17/2024(8) |
|
— |
|
|
— |
|
|
157,802 |
|
|
1,197,717 |
|
Cheryl A. Maguire |
1/20/2022(4) |
|
6,135 |
|
|
46,565 |
|
|
— |
|
|
— |
|
|
1/20/2022(4) |
|
— |
|
|
— |
|
|
6,135 |
|
|
46,565 |
|
|
1/25/2023(5) |
|
11,508 |
|
|
87,346 |
|
|
— |
|
|
— |
|
|
1/25/2023(6) |
|
— |
|
|
— |
|
|
17,261 |
|
|
131,011 |
|
|
1/17/2024(7) |
|
28,479 |
|
|
216,156 |
|
|
— |
|
|
— |
|
|
1/17/2024(8) |
|
— |
|
|
— |
|
|
28,479 |
|
|
216,156 |
|
Michael J. Foster |
1/20/2022(4) |
|
6,473 |
|
|
49,130 |
|
|
— |
|
|
— |
|
|
1/20/2022(4) |
|
— |
|
|
— |
|
|
6,473 |
|
|
49,130 |
|
|
1/25/2023(5) |
|
11,400 |
|
|
86,526 |
|
|
— |
|
|
— |
|
|
1/25/2023(6) |
|
— |
|
|
— |
|
|
17,099 |
|
|
129,781 |
|
|
1/17/2024(7) |
|
28,218 |
|
|
214,175 |
|
|
— |
|
|
— |
|
|
1/17/2024(8) |
|
— |
|
|
— |
|
|
28,217 |
|
|
214,167 |
|
Kristy D. Carver |
3/8/2022(9) |
|
7,032 |
|
|
53,373 |
|
|
— |
|
|
— |
|
|
1/25/2023(5) |
|
3,512 |
|
|
26,656 |
|
|
— |
|
|
— |
|
|
1/25/2023(6) |
|
— |
|
|
— |
|
|
5,268 |
|
|
39,984 |
|
|
1/17/2024(7) |
|
8,648 |
|
|
65,638 |
|
|
— |
|
|
— |
|
|
1/17/2024(8) |
|
— |
|
|
— |
|
|
8,648 |
|
|
65,638 |
|
Damien J. Renwick |
1/20/2022(4) |
|
3,993 |
|
|
30,307 |
|
|
— |
|
|
— |
|
|
1/20/2022(4) |
|
— |
|
|
— |
|
|
3,994 |
|
|
30,314 |
|
|
1/25/2023(5) |
|
7,672 |
|
|
58,230 |
|
|
— |
|
|
— |
|
|
1/25/2023(6) |
|
— |
|
|
— |
|
|
11,508 |
|
|
87,346 |
|
|
1/17/2024(7) |
|
25,358 |
|
|
192,467 |
|
|
— |
|
|
— |
|
|
1/17/2024(8) |
|
— |
|
|
— |
|
|
25,358 |
|
|
192,467 |
|
John P. Burns |
1/20/2022(4) |
|
4,347 |
|
|
32,994 |
|
|
— |
|
|
— |
|
|
1/20/2022(4) |
|
— |
|
|
— |
|
|
4,348 |
|
|
33,001 |
|
|
1/25/2023(5) |
|
7,672 |
|
|
58,230 |
|
|
— |
|
|
— |
|
|
1/25/2023(6) |
|
— |
|
|
— |
|
|
11,508 |
|
|
87,346 |
|
|
1/17/2024(7) |
|
19,051 |
|
|
144,597 |
|
|
— |
|
|
— |
|
|
1/17/2024(8) |
|
— |
|
|
— |
|
|
19,051 |
|
|
144,597 |
|
(1) The amounts shown in this column reflect the number of time-based restricted stock units granted under the 2016 LTIP that are not vested as of December 31, 2024. Grants of time-based restricted stock units vest in three equal annual tranches on each anniversary of the grant date.
(2) The amounts reported in this column were calculated by multiplying the number of shares underlying unvested restricted stock units included in this table by the closing price of our common stock on the NYSE on December 31, 2024, which was $7.59.
(3) The amounts shown in this column reflect the number of performance-based restricted stock units granted under our 2016 LTIP that are not vested as of December 31, 2024. For the awards granted on January 20, 2022 the amounts represent the number of units earned over the three year measurement period and which vested on January 20, 2025. For grants on January 25, 2023, and January 17, 2024, vesting is based on relative TSR ranking compared to a peer group measured on an annual basis and adjusted at the end of the performance period based on the cumulative three year TSR ranking. Since vesting for these awards include a three year cumulative TSR adjustment, the amounts disclosed in the table above represent the target number of units for the entire grant. For further details regarding the performance based vesting restricted stock unit grants made in 2024, see "Executive Compensation — Compensation Discussion and Analysis – Compensation Framework – Long-Term (Equity) Incentive Plan".
(4) All outstanding awards that were eligible to be vested were vested on January 20, 2025 while the remaining awards were forfeited.
(5) This row reflects the number of shares of common stock underlying time-based restricted stock units granted on January 25, 2023 under the 2016 LTIP, which vested or are scheduled to vest in equal increments on January 25, 2025 and January 25, 2026.
|
|
LSB Industries, Inc. Proxy Statement 59 |
(6) This row reflects the number of shares of common stock underlying performance-based restricted stock units granted on January 25, 2023 under the 2016 LTIP, which are scheduled to vest on January 25, 2026.
(7) This row reflects the number of shares of common stock underlying time-based restricted stock units granted on January 17, 2024 under the 2016 LTIP, which vested or are scheduled to vest in equal increments on January 17, 2025, January 17, 2026 and January 17, 2027.
(8) This row reflects the number of shares of common stock underlying performance-based restricted stock units granted on January 17, 2024 under the 2016 LTIP, which are scheduled to vest on January 17, 2027.
(9) This row reflects the number of shares of common stock underlying time-based restricted stock units granted on March 8, 2022 under the 2016 LTIP, which vested on March 8, 2025.
Stock Vested During 2024
The following table contains information regarding the vesting of stock awards held by our NEOs during 2024.
|
Stock Awards |
|||||||||
Name |
Number of Shares |
Value Realized on |
||||||||
Mark T. Behrman |
|
|
306,999 |
|
|
|
$ |
2,350,581 |
|
|
Cheryl A. Maguire |
|
|
62,698 |
|
|
|
$ |
479,721 |
|
|
Michael J. Foster |
|
|
65,728 |
|
|
|
$ |
502,755 |
|
|
Kristy D. Carver |
|
|
25,470 |
|
|
|
$ |
246,788 |
|
|
Damien J. Renwick |
|
|
30,717 |
|
|
|
$ |
235,483 |
|
|
John P. Burns |
|
|
44,301 |
|
|
|
$ |
338,857 |
|
|
(1) The amounts reported in this column represent the number of shares underlying restricted stock units that vested during 2024, without reduction for any shares withheld to satisfy applicable tax obligations.
(2) The value equals the Company's closing stock price on the business day immediately before the vesting date multiplied by the number of shares vesting or acquired on vesting.
Equity Compensation Plan Information
The following table shows, as of December 31, 2024, information with respect to our equity compensation plans under which shares of common stock are authorized for issuance.
Plan category |
Number of securities to be issued upon exercise of outstanding options, restricted stock units, warrants and rights (a) |
Weighted average exercise price of outstanding options, restricted stock units, warrants and rights |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)(1) |
||||||||||||
Equity compensation plans approved by stockholders |
|
|
1,688,093 |
|
|
|
$ |
— |
|
|
|
|
5,389,938 |
|
(2) |
Equity compensation plans not approved by stockholders |
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
Total |
|
|
1,688,093 |
|
|
|
$ |
— |
|
|
|
|
5,389,938 |
|
|
As of December 31, 2024, there were restricted stock units outstanding to acquire a total of 1,688,093 shares of common stock under our 2016 LTIP.
|
|
LSB Industries, Inc. Proxy Statement 60 |
Potential Payments Upon Termination or Change in Control
Severance Payments and Benefits
As previously discussed, on December 30, 2018, we entered into an employment agreement with each of Ms. Maguire and Messrs. Behrman, and Foster, and on December 20, 2019 (effective on February 3, 2020) with Mr. Burns (collectively, the “Employment Agreements”). While we have not entered into an employment agreement with Ms. Carver, we did enter into a severance and change of control agreement with her effective March 31, 2020. We are not party to an employment agreement with Mr. Renwick.
The Employment Agreements with our NEOs provide for potential severance payments upon the termination of the applicable NEO’s employment in certain situations, including in connection with a "change in control," termination without "cause" by the Company or termination by the executive for "good reason," due to nonrenewal by the Company and upon the death or permanent disability of the executive (as each term is defined in the NEO’s Employment Agreement, as applicable).
Termination for Cause, without Good Reason, or Due to Executive’s Nonrenewal. In the event of the executive’s termination by the Company for "cause" or by the executive without "good reason," the Company has no severance obligation to the executive other than payment of accrued obligations, which are (i) earned but unpaid base salary through the date of termination, (ii) any employee benefits to which the executive has a vested entitlement as of the date of termination, (iii) accrued but unused vacation, (iv) any earned but unpaid annual bonus for a performance year that has ended on or prior to the date of termination; and (v) approved but unreimbursed eligible business expenses. Additionally, pursuant to the terms of the applicable restricted stock unit award agreements, all unvested restricted stock units will be forfeited by the executive (including Mr. Renwick and Ms. Carver) upon termination for cause, without good reason or the executive’s non-renewal.
Death or Permanent Disability. Under the terms of the Employment Agreements, in the event of the NEO’s death or termination on account of becoming permanently disabled, the agreement will terminate and the executive will be entitled to (i) payment of accrued obligations and (ii) payment of a pro-rata portion of his or her annual bonus for the relevant year determined and paid in accordance with the Company’s regular bonus practices. Additionally, pursuant to the terms of the applicable restricted stock unit award agreements, a pro-rata portion of the executive’s time-based restricted stock units will vest upon termination of the executive’s service due to death or disability calculated by multiplying the number of restricted stock units scheduled to vest on the anniversary of the grant date immediately succeeding the date of termination by a fraction, the numerator of which is the number of days that have elapsed from the last anniversary of the grant date and the denominator of which is 365. For performance-based restricted stock units, a pro-rata portion of the target number of restricted stock units will vest based on actual performance, as determined in good faith by the Compensation Committee. Any outstanding equity awards to Mr. Renwick and Ms. Carver will be treated in the same manner as the other NEOs.
Termination without Cause, for Good Reason or Due to Company’s Nonrenewal. Under the terms of the Employment Agreements, if the executive is terminated by the Company without "cause," by the executive for "good reason" or by the Company’s proper notice of nonrenewal of the Employment Agreement, the executive will be entitled to (i) payment of a pro rata portion of his or her annual bonus for the year in which such termination occurs based on the actual achievement of the applicable performance criteria for such year and paid in accordance with the Company's regular bonus practices; (ii) payment of a lump sum cash payment equal to the product of one times (or two times in the case of Mr. Behrman) the sum of his or her then-current base salary and target bonus payable on the first payroll date following the executive’s execution and non-revocation of a general release of claims; and (iii) continued participation in our medical, dental and hospitalization insurance coverage for himself or herself and his or her qualified dependents for a period of 18 months with the employer portion of the continued coverage paid by the Company. If Ms. Carver is terminated by the company without "cause" or by Ms. Carver for "good reason," she will be entitled to a severance payment equal to one times her then-effective salary. Additionally, pursuant to the terms of the applicable restricted stock unit award agreements, upon termination of the executive by the Company without cause, by the executive for good reason or by the Company's proper notice of nonrenewal of the Employment Agreement, all time-based restricted stock units will automatically vest. For performance-based restricted stock units, the executive will vest in a pro-rata portion of the performance-based restricted stock units will vest, based on the actual performance determined at the end
|
|
LSB Industries, Inc. Proxy Statement 61 |
of the performance period by the Compensation Committee in good faith. Any outstanding equity awards to Mr. Renwick and Ms. Carver will be treated in the same manner as the other NEOs.
Change in Control. Under the terms of the Employment Agreements, if the NEO’s employment is terminated by the Company without "cause" or by the executive for "good reason" (A) upon or within 24 months of the change in control or (B) either (x) within 90 days prior to the date a definitive agreement is executed which results in a change in control within 180 days after the date such definitive agreement is executed or (y) on or within 180 days following the date a definitive agreement is executed which results in a change in control within 180 days after the date such definitive agreement is executed, the executive will be entitled to:
If Ms. Carver is employed by the Company at the time of a change in control and her employment is terminated without "cause" or by the executive with "good reason" within 12 months of the change in control, then Ms. Carver will be entitled to a payout of a lump sum cash payment equal to the product of one times her then-current salary and her target bonus payable on the first payable date following her execution and non-revocation of a general release of claims.
Additionally, pursuant to the terms of the applicable restricted stock unit award agreements, upon termination resulting from a change in control, if the restricted stock unit award is not assumed or substituted in connection with a change in control, all time-based restricted stock units will automatically vest in full. For performance-based restricted stock units, if a change in control occurs prior to the end of the performance period, the portion of the target number that is earned will be determined by the Compensation Committee immediately prior to the change in control and will equal the greater of (x) the target number of restricted stock units or (y) the portion of the target number that is earned based on the actual performance as determined by the Compensation Committee. Any outstanding equity awards to Mr. Renwick and Ms. Carver will be treated in the same manner as the other NEOs.
Table of Severance Benefits
The following table summarizes the dollar amounts of potential payments to each NEO upon a qualifying termination of employment or change in control pursuant to the terms of our equity incentive plans, the Employment Agreements, and Ms. Carver’s severance and change in control agreement, as applicable, assuming that the events described in the table occurred on December 31, 2024, and using the closing price of the Company’s common stock on December 31, 2024, the last business day of 2024, of $7.59. The values below are our best estimates of the severance payments and benefits the NEOs would receive upon a termination of employment or a change in control as of December 31, 2024 and we believe the amounts are calculated using reasonable assumptions. All amounts are before taxes, which would reduce amounts ultimately received by our NEOs. The table is only intended to summarize various terms of the Employment Agreements and equity award documents and is qualified in its entirety by reference to the full text of the actual agreements, copies of which are on file with the SEC.
|
|
LSB Industries, Inc. Proxy Statement 62 |
Executive Officer |
|
Termination |
|
|
Termination |
Termination |
Change in |
Death |
Disability |
|||||||||||||||||||||
Mark T. Behrman |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
STI Plan Payments(2) |
|
$ |
501,000 |
|
|
|
$ |
501,000 |
|
|
|
$ |
501,000 |
|
|
|
$ |
501,000 |
|
|
|
$ |
501,000 |
|
|
|
$ |
501,000 |
|
|
Cash Severance |
|
$ |
— |
|
|
|
$ |
3,137,400 |
|
(3) |
|
$ |
4,706,100 |
|
(5) |
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Equity Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unvested and Accelerated |
|
$ |
— |
|
|
|
$ |
4,053,053 |
|
(6) |
|
$ |
4,053,053 |
|
(6) |
|
$ |
4,053,053 |
|
(6) |
|
$ |
1,984,474 |
|
(8) |
|
$ |
1,984,474 |
|
(8) |
Health Coverage(7) |
|
$ |
— |
|
|
|
$ |
23,356 |
|
|
|
$ |
23,356 |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Total |
|
$ |
501,000 |
|
|
|
$ |
7,714,809 |
|
|
|
$ |
9,283,509 |
|
|
|
$ |
4,554,053 |
|
|
|
$ |
2,485,474 |
|
|
|
$ |
2,485,474 |
|
|
Cheryl A. Maguire |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
STI Plan Payments(2) |
|
$ |
200,000 |
|
|
|
$ |
200,000 |
|
|
|
$ |
200,000 |
|
|
|
$ |
200,000 |
|
|
|
$ |
200,000 |
|
|
|
$ |
200,000 |
|
|
Cash Severance |
|
$ |
— |
|
|
|
$ |
766,500 |
|
(3) |
|
$ |
1,533,000 |
|
(5) |
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Equity Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unvested and Accelerated |
|
$ |
— |
|
|
|
$ |
743,799 |
|
(6) |
|
$ |
743,799 |
|
(6) |
|
$ |
743,799 |
|
(6) |
|
$ |
375,447 |
|
(8) |
|
$ |
375,447 |
|
(8) |
Health Coverage(7) |
|
$ |
— |
|
|
|
$ |
23,356 |
|
|
|
$ |
23,356 |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Total |
|
$ |
200,000 |
|
|
|
$ |
1,733,655 |
|
|
|
$ |
2,500,155 |
|
|
|
$ |
943,799 |
|
|
|
$ |
575,447 |
|
|
|
$ |
575,447 |
|
|
Michael J. Foster |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
STI Plan Payments(2) |
|
$ |
161,000 |
|
|
|
$ |
161,000 |
|
|
|
$ |
161,000 |
|
|
|
$ |
161,000 |
|
|
|
$ |
161,000 |
|
|
|
$ |
161,000 |
|
|
Cash Severance |
|
$ |
— |
|
|
|
$ |
737,800 |
|
(3) |
|
$ |
1,475,600 |
|
(5) |
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Equity Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unvested and Accelerated |
|
$ |
— |
|
|
|
$ |
742,909 |
|
(6) |
|
$ |
742,909 |
|
(6) |
|
$ |
742,909 |
|
(6) |
|
$ |
355,204 |
|
(8) |
|
$ |
355,204 |
|
(8) |
Health Coverage(7) |
|
$ |
— |
|
|
|
$ |
23,356 |
|
|
|
$ |
23,356 |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Total |
|
$ |
161,000 |
|
|
|
$ |
1,665,065 |
|
|
|
$ |
2,402,865 |
|
|
|
$ |
903,909 |
|
|
|
$ |
516,204 |
|
|
|
$ |
516,204 |
|
|
Kristy D. Carver |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
STI Plan Payments(2) |
|
$ |
102,000 |
|
|
|
$ |
102,000 |
|
|
|
$ |
102,000 |
|
|
|
$ |
102,000 |
|
|
|
$ |
102,000 |
|
|
|
$ |
102,000 |
|
|
Cash Severance |
|
$ |
— |
|
|
|
$ |
333,000 |
|
(4) |
|
$ |
499,500 |
|
(5) |
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Equity Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unvested and Accelerated |
|
$ |
— |
|
|
|
$ |
251,289 |
|
(6) |
|
$ |
251,289 |
|
(6) |
|
$ |
251,289 |
|
(6) |
|
$ |
113,159 |
|
(8) |
|
$ |
113,159 |
|
(8) |
Health Coverage(7) |
|
$ |
— |
|
|
|
$ |
23,356 |
|
|
|
$ |
23,356 |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Total |
|
$ |
102,000 |
|
|
|
$ |
709,645 |
|
|
|
$ |
876,145 |
|
|
|
$ |
353,289 |
|
|
|
$ |
215,159 |
|
|
|
$ |
215,159 |
|
|
Damien J. Renwick |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
STI Plan Payments |
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Cash Severance |
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Equity Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unvested and Accelerated |
|
$ |
— |
|
|
|
$ |
591,131 |
|
(6) |
|
$ |
591,131 |
|
(6) |
|
$ |
591,131 |
|
(6) |
|
$ |
278,120 |
|
(8) |
|
$ |
278,120 |
|
(8) |
Health Coverage(7) |
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Total |
|
$ |
— |
|
|
|
$ |
591,131 |
|
|
|
$ |
591,131 |
|
|
|
$ |
591,131 |
|
|
|
$ |
278,120 |
|
|
|
$ |
278,120 |
|
|
John P. Burns |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
STI Plan Payments(2) |
|
$ |
92,000 |
|
|
|
$ |
92,000 |
|
|
|
$ |
92,000 |
|
|
|
$ |
92,000 |
|
|
|
$ |
92,000 |
|
|
|
$ |
92,000 |
|
|
Cash Severance |
|
$ |
— |
|
|
|
$ |
252,000 |
|
(3) |
|
$ |
504,000 |
|
(5) |
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Equity Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Unvested and Accelerated |
|
$ |
— |
|
|
|
$ |
500,765 |
|
(6) |
|
$ |
500,765 |
|
(6) |
|
$ |
500,765 |
|
(6) |
|
$ |
256,208 |
|
(8) |
|
$ |
256,208 |
|
(8) |
Health Coverage(7) |
|
$ |
— |
|
|
|
$ |
23,356 |
|
|
|
$ |
23,356 |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
|
$ |
— |
|
|
Total |
|
$ |
92,000 |
|
|
|
$ |
868,121 |
|
|
|
$ |
1,120,121 |
|
|
|
$ |
592,765 |
|
|
|
$ |
348,208 |
|
|
|
$ |
348,208 |
|
|
|
|
LSB Industries, Inc. Proxy Statement 63 |
CEO Pay Ratio
Our CEO to median employee pay ratio is calculated pursuant to Item 402(u) of Regulation S-K. We identified the median employee by examining the income set out on form W-2 for all individuals, including our CEO, who were employed by the Company on December 31, 2024. We included all employees in the calculation (other than our CEO), whether employed on a full-time, part-time or seasonal basis, as of the end of the year. We believe the use of W-2 income for all employees is a consistently applied compensation measure.
Mr. Behrman’s 2024 total annual compensation was $4,344,104 as reflected in the Summary Compensation Table included in this Proxy Statement. Our median employee’s total annual compensation for 2024, determined in the same manner as the compensation reported for the NEOs in the Summary Compensation Table, was $111,035. As a result, the ratio of Mr. Behrman’s total compensation to that of our median employee was 39 to 1.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
Pay Versus Performance
As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid, as computed under SEC rules, and certain financial performance of the Company. For more information about the Company’s executive compensation program, see the "Executive Compensation - Compensation Discussion and Analysis" and "Executive Compensation Tables". In 2021, we closed on a transaction with LSB Funding, the former holder of $310 million of LSB Series E-1 and F-1 Preferred Stock, exchanging those preferred shares for shares of our common stock (the "Exchange Transaction"). The successful completion of the Exchange Transaction had the effect of upgrading the Company’s credit rating, significantly reducing the cost of capital, and enhancing the Company’s liquidity. As a result, our share price increased from $2.61 per share at the end of 2020 to $11.05 per share at the end of 2021. The "compensation actually paid" disclosures for 2021 below include the revaluation of all unvested and vested equity awards from the end of 2020 to the end of 2021.
|
|
|
|
|
|
|
|
|
Value of Initial Fixed $100 Investment Based on |
|
|
|
|
|
||||||||||
Fiscal Year |
Summary Compensation Table Total for PEO ($) |
|
Compensation Actually Paid to PEO ($) |
|
Average Summary Compensation Table Total for Non-PEO NEOs ($) |
|
Average Compensation Actually Paid to Non-PEO NEOs ($) |
|
Total Shareholder Return |
|
Peer Group Total Shareholder |
|
Net Income (Loss) |
|
Adjusted EBITDA |
|
||||||||
|
(1) |
|
(2) |
|
(3) |
|
(4) |
|
(5) |
|
(6) |
|
(7) |
|
(8) |
|
||||||||
2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|||||||
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
LSB Industries, Inc. Proxy Statement 64 |
|
Mark Behrman |
|
||||||||||
|
2024 |
|
2023 |
|
2022 |
|
2021 |
|
||||
Total Compensation as reported in Summary Compensation Table |
|
|
|
|
|
|
|
|
||||
Fair value of equity awards granted during fiscal year |
|
( |
) |
|
( |
) |
|
( |
) |
|
( |
) |
Fair value of equity compensation granted in current year—value at end of year-end |
|
|
|
|
|
|
|
|
||||
Change in fair value from end of prior fiscal year to vesting date for awards made in prior fiscal years that vested during current fiscal year |
|
( |
) |
|
( |
) |
|
|
|
|
||
Change in fair value from end of prior fiscal year to end of current fiscal year for awards made in prior fiscal years that were unvested at end of current fiscal year |
|
( |
) |
|
( |
) |
|
|
|
|
||
Dividends or other earnings paid on stock or options awards in the covered fiscal year prior to the vesting date that are not otherwise reflected in Fair Value or included in the total compensation for the covered fiscal year |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Fair value of awards forfeited in current fiscal year determined at end of prior fiscal year |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Compensation Actually Paid to PEO |
|
|
|
|
|
|
|
|
||||
|
Non-PEO NEO Averages |
|
||||||||||
|
2024 |
|
2023 |
|
2022 |
|
2021 |
|
||||
Total Compensation as reported in Summary Compensation Table |
|
|
|
|
|
|
|
|
||||
Fair value of equity awards granted during fiscal year |
|
( |
) |
|
( |
) |
|
( |
) |
|
( |
) |
Fair value of equity compensation granted in current year—value at end of year-end |
|
|
|
|
|
|
|
|
||||
Change in fair value from end of prior fiscal year to vesting date for awards made in prior fiscal years that vested during current fiscal year |
|
( |
) |
|
( |
) |
|
|
|
|
||
Change in fair value from end of prior fiscal year to end of current fiscal year for awards made in prior fiscal years that were unvested at end of current fiscal year |
|
( |
) |
|
( |
) |
|
|
|
|
||
Dividends or other earnings paid on stock or options awards in the covered fiscal year prior to the vesting date that are not otherwise reflected in Fair Value or included in the total compensation for the covered fiscal year |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Fair value of awards forfeited in current fiscal year determined at end of prior fiscal year |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Compensation Actually Paid to Non-PEO NEOs |
|
|
|
|
|
|
|
|
||||
consisted of: Advansix Inc., American Vanguard Corporation, Balchem Corporation, Compass Minerals International, Inc., CSW Industrials, Inc., CVR Partners, LP, Ecovyst, Inc., Hawkins, Inc., Haynes International, Inc., Ingevity Corporation, Intrepid Potash, Inc., Livent Corp., Orion Engineered Carbons S.A., Quaker Chemical Corporation. Haynes International, Inc. was delisted and Livent Corp. effected a merger or was acquired in 2024 and therefore we only include market prices in 2024 through their respective last trading day. The total shareholder return for our former peer group (excluding the aforementioned delisted or acquired/merged companies) would have been $117, $101, $111 and $115 for 2021, 2022, 2023 and 2024, respectively.
and amortization, provision for income taxes, stock-based compensation expense, certain legal fees and turnaround costs, and to subtract
gains on extinguishment of debt.
|
|
LSB Industries, Inc. Proxy Statement 65 |
As noted above, the Compensation Committee believes in a comprehensive evaluation of the NEOs’ and the Company’s performance, and uses a mix of performance measures under our annual STI Plan and our 2016 LTIP to align executive pay with Company performance.
We believe the table above generally shows the alignment between compensation actually paid to our PEO and our non-PEO NEOs and the Company’s performance, consistent with our compensation philosophy. Specifically, a large portion of our NEOs’ compensation is reliant on the Company’s financial performance and, as such, the PEO "compensation actually paid" and non-PEO NEO average "compensation actually paid" each year was aligned with our financial performance and our TSR performance.
Description of Relationship Between NEO Compensation and Total Shareholder Return.
As reflected in the table above, our Total Shareholder Return ("TSR") increased from the beginning of fiscal year 2021 to the end of fiscal year 2022 and then decreased to the end of fiscal year 2024. During the same period, "compensation actually paid" to our PEO (Mr. Behrman), and average "compensation actually paid" to our non-PEO NEOs, decreased through 2023 and increased slightly through the end of 2024. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs (Ms. Maguire, and Messrs. Foster, Burns and Renwick for 2022, 2023 and 2024 and Ms. Maguire and Ms. Carver and Messrs. Foster, Burns and Renwick for 2021) was higher in 2021 than in 2022, 2023 and 2024. This is primarily due to the impact of the significantly lower share price under the 2016 LTIP grant date in 2021 as compared with the "Fair value of equity compensation granted in current year – value at end of year-end" for 2022. 2023 and 2024. The increase in share price from the grant date to the end of the year resulted, in large part, from the Exchange Transaction the Company successfully completed in 2021. The Compensation Committee considers the Company’s stock performance as one of several factors to be considered in setting the compensation of our PEO and our non-PEO NEOs. Because a significant portion of the PEO’s and non-PEO NEOs’ compensation is stock-based, the Compensation Committee anticipates that the "compensation actually paid" to such officers will vary with changes in the price of our common stock.
|
|
LSB Industries, Inc. Proxy Statement 66 |
Description of Relationship Between NEO Compensation and Net Income (Loss).
As reflected in the table above, Net Income for the Company increased from the beginning of fiscal year 2021 to the end of fiscal year 2022 and decreased over fiscal years 2023 and 2024. During the same period, "compensation actually paid" to our PEO (Mr. Behrman), and average "compensation actually paid" to our Non-PEO NEOs (Ms. Maguire, and Messrs. Foster, Burns and Renwick for 2022 and Ms. Maguire and Ms. Carver and Messrs. Foster, Burns and Renwick for 2021), decreased. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs was higher in 2021 than in 2022 primarily due to the Exchange Transaction the Company successfully completed in 2021, which increased the Company’s share price during 2021 resulting in an increase in the fair value of awards, both granted in 2021 and in prior years. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs was lower in 2023 than in 2022, primarily due to the impact of our share price decline in 2023, which resulted in lower fair values of outstanding awards at year end 2023, and due to certain performance-based grants no longer being considered probable of vesting.
|
|
LSB Industries, Inc. Proxy Statement 67 |
Description of Relationship Between NEO Compensation and Adjusted EBITDA.
As reflected in the table above, Adjusted EBITDA for the Company increased from the beginning of fiscal year 2021 to the end of fiscal year 2022 and then decreased to the end of 2024. During the same period, "compensation actually paid" to our PEO (Mr. Behrman), and average "compensation actually paid" to our Non-PEO NEOs (Ms. Maguire, and Messrs. Foster, Burns and Renwick for 2022 and 2023 and Ms. Maguire and Ms. Carver and Messrs. Foster, Burns and Renwick for 2021), decreased. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs was higher in 2021 than in 2022 primarily due to the Exchange Transaction the Company successfully completed in 2021, which increased the Company’s share price during 2021 resulting in an increase in the fair value of awards, both granted in 2021 and in prior years. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs was lower in 2023 than in 2022, primarily due to the impact of our share price decline in 2023, which resulted in lower fair values of outstanding awards at year end 2023, and due to certain performance-based grants no longer being considered probable of vesting.
|
|
LSB Industries, Inc. Proxy Statement 68 |
Description of Relationship Between NEO Compensation and Total Shareholder Return.
As reflected in the table above, our Total Shareholder Return ("TSR") increased from the beginning of fiscal year 2021 to the end of fiscal year 2022 and then decreased to the end of fiscal year 2024. During the same period, "compensation actually paid" to our PEO (Mr. Behrman), and average "compensation actually paid" to our non-PEO NEOs, decreased. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs (Ms. Maguire, and Messrs. Foster, Burns and Renwick for 2022 and 2023 and Ms. Maguire and Ms. Carver and Messrs. Foster, Burns and Renwick for 2021) was higher in 2021 than in 2022 primarily due to the Exchange Transaction the Company successfully completed in 2021, which increased the Company’s share price during 2021 resulting in an increase in the fair value of awards, both granted in 2021 and in prior years. The "compensation actually paid" to our PEO and the average "compensation actually paid" to our non-PEO NEOs was lower in 2023 than in 2022, primarily due to the impact of our share price decline in 2023, which resulted in lower fair values of outstanding awards at year end 2023, and due certain performance-based grants no longer being considered probable of vesting. The Compensation Committee considers the Company’s stock performance as one of several factors to be considered in setting the compensation of our PEO and our non-PEO NEOs. Because a significant portion of the PEO’s and non-PEO NEOs’ compensation is stock-based, the Compensation Committee anticipates that the "compensation actually paid" to such officers will vary with changes in the price of our common stock.
Most Important Financial Performance Measures
Our Compensation Committee selects performance metrics for our short-term and long-term incentive plans that align NEO interests with those of our shareholders. See "Executive Compensation — Compensation Discussion and Analysis — Compensation Framework" for the definition of these metrics and further explanation of how our compensation metrics in our short-term and long-term incentive plans tie to our business strategy.
|
|
LSB Industries, Inc. Proxy Statement 69 |
Below in an unranked order are the most important financial performance measures used for the fiscal year ended December 31, 2024.
Metric |
Alignment |
Adjusted EBITDA is a cornerstone of our short-term (annual) incentive plan. It is the primary metric by which we measure our profitability and by which investors measure our performance. |
|
Certain performance-based equity awards under our long-term incentive plan, which are measured and vest over a three year period, are based on absolute total shareholder return (awards granted in 2022) or relative total shareholder return (awards granted in 2023 and 2024). |
|
We utilize an internal environmental, health and safety metric which incorporates the number of injuries, safety incidents and reportable environmental events as a component of our short-term incentive plan (see page 50). |
Director Stock Ownership Guidelines
On April 26, 2017, the Board unanimously adopted the LSB Industries, Inc. stock ownership guidelines. The stock ownership guidelines require each non-employee director (other than Mr. Bobb and Ms. Kitamura) to own shares of our common stock having an aggregate value of at least $310,000 (two times the non-employee director retainer) by the later of (i) five years following the effective date of the guidelines (April 26, 2022) or (ii) the fifth anniversary of a director’s election to the Board. The value of the director’s holdings is calculated using the higher of the actual cost of a director’s holdings when purchased or the market value of the holdings.
As of December 31, 2024, each of Messrs. Golsen, Packebush, Roedel, Sanders, White and Ms. Peninger are in compliance with the stock ownership guidelines and exceeds the minimum stock ownership level under the director stock ownership guidelines. Mr. Chandler has until November 2029 to meet the director stock ownership guidelines.
Director Compensation
2024 Director Compensation Table
The following table sets forth the compensation earned by our non-employee directors who served on the Board during 2024. Mr. Bertocco is not included in the table below because he did not serve as a director in 2024.
Name(1) |
|
Fees Earned or |
|
Stock |
|
All Other |
|
Total |
||||||||||||||||
Jonathan S. Bobb |
|
|
$ |
197,500 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
197,500 |
|
|
John D. Chandler |
|
|
$ |
12,704 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
12,704 |
|
|
Barry H. Golsen |
|
|
$ |
195,000 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
195,000 |
|
|
Kanna Kitamura |
|
|
$ |
192,500 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
— |
|
|
|
|
$ |
192,500 |
|
|
Steven L. Packebush |
|
|
$ |
86,250 |
|
|
|
|
$ |
105,003 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
191,253 |
|
|
Diana M. Peninger |
|
|
$ |
88,750 |
|
|
|
|
$ |
105,003 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
193,753 |
|
|
Richard W. Roedel(4) |
|
|
$ |
— |
|
|
|
|
$ |
238,916 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
238,916 |
|
|
Richard S. Sanders |
|
|
$ |
86,250 |
|
|
|
|
$ |
105,003 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
191,253 |
|
|
Lynn F. White |
|
|
$ |
117,228 |
|
|
|
|
$ |
105,003 |
|
|
|
|
$ |
— |
|
|
|
|
$ |
222,231 |
|
|
|
|
LSB Industries, Inc. Proxy Statement 70 |
The compensation of non-employee directors is governed by our non-employee Director Compensation and Stock Ownership Policy (as amended and restated, the "Director Policy"). The elements of non-employee director compensation are summarized below:
Compensation Element(1) |
|
Annual Compensation |
||||
Non-employee director annual cash fee |
|
|
$ |
75,000 |
(2) |
|
Equity compensation (restricted stock units) |
|
|
$ |
120,000 |
(3) |
|
Audit Committee Chair cash fee |
|
|
$ |
20,000 |
|
|
Audit Committee member cash fee (excluding Chair) |
|
|
$ |
10,000 |
|
|
Compensation Committee Chair cash fee |
|
|
$ |
15,000 |
|
|
Compensation Committee member cash fee (excluding Chair) |
|
|
$ |
7,500 |
|
|
Nominating Committee Chair cash fee |
|
|
$ |
12,500 |
(4) |
|
Nominating Committee member cash fee (excluding Chair) |
|
|
$ |
5,000 |
|
|
Lead Independent Director cash fee |
|
|
$ |
45,000 |
|
|
Cash fees earned under the Director Policy are earned on a calendar-quarter basis and are paid in arrears not later than the 15th day following the end of each calendar quarter. Such cash fees are pro-rated to reflect the period of year during which the director was not a member of the Board. Additionally, under the Director Policy, restricted stock units are granted on the first business day following our annual meeting of stockholders each year. The number of restricted stock units is determined by dividing the target value by the closing price of our common stock on the grant date.
Certain of our directors are eligible to participate in the Nonqualified Deferred Compensation Plan for Non-Employee Directors. Under the Plan, participants make an election to defer settlement of some or all of the restricted stock units granted or cash compensation earned to a future date. The election must be made before the end of the preceding year that the restricted stock units are granted or cash compensation is earned. Participants choose the amounts to defer and the future settlement date(s) or event(s). Settlement dates can be fixed or contingent on a change in control or separation of service. We established an equity instrument in the form of a Deferred Stock Unit ("DSU") which is a restricted stock unit that settles on a specified deferred payment date as opposed to on the vesting date. Restricted stock units which are elected to be deferred will be classified as DSUs on the grant date. Any cash compensation during the calendar year elected to be deferred will be accrued and accumulated until December 15 of a given year upon which the cash obligation will be exchanged for DSUs, the number of which will be determined by dividing the accrued compensation amount with the market price of LSB’s common stock on December 15. This will result in DSUs with a vesting period (for restricted stock units grants) and DSUs which are already vested at the time of the grant (for cash fees).
|
|
LSB Industries, Inc. Proxy Statement 71 |
Securities Ownership
Security Ownership of 5% Owners
The following table sets forth the beneficial ownership of our common stock as of March 24, 2025, held by beneficial owners of 5% or more of our common stock.
The amounts and percentage of shares beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to vote or to direct the voting of such security, or "investment power," which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days of March 24, 2025. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all stock shown as beneficially owned by them, subject to community property laws where applicable.
Name and Address of Beneficial Owner |
|
Title of Class |
|
Amounts of Shares |
|
Percent |
|||||||||
TLB-LSB, LLC |
|
|
Common |
|
|
|
|
15,306,927 |
|
(2) |
|
|
|
21.3% |
|
Blackrock |
|
|
Common |
|
|
|
|
6,249,282 |
|
(3) |
|
|
|
8.7% |
|
Robert E. Robotti |
|
|
Common |
|
|
|
|
4,343,307 |
|
(4) |
|
|
|
6.0% |
|
+ Because of the requirements of the SEC as to the method of determining the amount of shares an individual or entity may own beneficially, the amount shown for an individual may include shares also considered beneficially owned by others. Any shares of stock which a person does not own, but which he or she has the right to acquire within 60 days of March 24, 2025, 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.
|
|
LSB Industries, Inc. Proxy Statement 72 |
Security Ownership of Certain Beneficial Owners
The following table sets forth the beneficial ownership of each class of our common stock as of March 24, 2025, held by (1) directors and director nominees; (2) each NEO listed in this Proxy Statement; and (3) all current directors and executive officers as a group.
The amounts and percentage of units beneficially owned are reported on the basis of regulations of the SEC governing the determination of beneficial ownership of securities. Under the rules of the SEC, a person is deemed to be a "beneficial owner" of a security if that person has or shares "voting power," which includes the power to vote or to direct the voting of such security, or "investment power," which includes the power to dispose of or to direct the disposition of such security. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days of March 24, 2025. Under these rules, more than one person may be deemed a beneficial owner of the same securities and a person may be deemed a beneficial owner of securities as to which he has no economic interest. Except as indicated by footnote, the persons named in the table below have sole voting and investment power with respect to all stock shown as beneficially owned by them, subject to community property laws where applicable.
Unless otherwise indicated, the address of each beneficial owner in the table below is c/o LSB Industries, Inc., 3503 NW 63rd Street, Suite 500, Oklahoma City, OK 73116.
Name of Beneficial Owner |
|
Title of Class |
|
Amount of Shares |
|
Percent |
||||||||
Mark T. Behrman |
|
|
Common |
|
|
|
|
1,325,303 |
|
|
|
|
1.8% |
|
John P. Burns (3) |
|
|
Common |
|
|
|
|
130,917 |
|
|
|
|
* |
|
Kristy D. Carver |
|
|
Common |
|
|
|
|
57,100 |
|
|
|
|
* |
|
Michael J. Foster |
|
|
Common |
|
|
|
|
310,209 |
|
|
|
|
* |
|
Cheryl A. Maguire |
|
|
Common |
|
|
|
|
181,317 |
|
|
|
|
* |
|
Damien J. Renwick |
|
|
Common |
|
|
|
|
60,798 |
|
|
|
|
* |
|
Riccardo Bertocco |
|
|
Common |
|
|
|
|
— |
|
|
|
|
* |
|
Jonathan S. Bobb |
|
|
Common |
|
|
|
|
12,611 |
|
|
|
|
* |
|
John D. Chandler |
|
|
Common |
|
|
|
|
— |
|
|
|
|
* |
|
Barry H. Golsen |
|
|
Common |
|
|
|
|
676,388 |
|
(4) |
|
|
* |
|
Kanna Kitamura |
|
|
Common |
|
|
|
|
— |
|
|
|
|
* |
|
Steven L. Packebush |
|
|
Common |
|
|
|
|
43,875 |
|
|
|
|
* |
|
Diana M. Peninger |
|
|
Common |
|
|
|
|
48,053 |
|
|
|
|
* |
|
Richard S. Sanders, Jr. |
|
|
Common |
|
|
|
|
187,734 |
|
|
|
|
* |
|
Lynn F. White |
|
|
Common |
|
|
|
|
216,487 |
|
|
|
|
* |
|
Directors and Executive Officers as a group (15 persons) |
|
|
Common |
|
|
|
|
3,119,875 |
|
|
|
|
4.3% |
|
* Less than 1%.
+ See footnote "+" to the table under "Security Ownership of Certain 5% Owners."
|
|
LSB Industries, Inc. Proxy Statement 73 |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, officers, and beneficial owners of more than 10% of the Company’s common stock to file with the SEC reports of holdings and changes in beneficial ownership of the Company’s stock. Based solely on a review of copies of the Forms 3, 4 and 5 furnished to us with respect to 2024, or written representations that no Form 5 was required to be filed, we believe that during 2024 all our directors and officers and beneficial owners of more than 10% of the Company’s common stock timely filed their required Forms 3, 4, or 5 , other than: (i) one late Form 4 filed by each of Mr. Behrman, Mr. Burns, Mr. Foster, Ms. Carver, Ms. Maguire and Mr. Renwick relating to a grant of restricted stock units and (ii) one late Form 3 filed by Mr. Bemis.
Stockholder Proposals
If you wish to submit proposals to be included in our proxy statement for our 2026 annual meeting, proposals must be received at our principal executive offices in writing not later than December 16, 2025. If the date of the 2026 annual meeting is changed by more than 30 days from the date of the 2025 annual meeting, the deadline for submitting proposals is a reasonable time before we begin to print and mail the proxy materials for our 2026 Annual Meeting. Proposals must satisfy the requirements set forth in Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and as set out in the Bylaws. Proposals should be addressed to our Corporate Secretary, LSB Industries, Inc., 3503 NW 63rd Street, Suite 500, Oklahoma City, Oklahoma 73116.
Other than matters properly brought under Rule 14a-8, the deadline for providing us with timely notice of matters that you otherwise desire to introduce at our next annual meeting of stockholders, other than those that will be included in our proxy materials, is not later than December 16, 2025, but not before November 16, 2025; provided that if the date of the 2026 annual meeting is more than 30 days before or more than 60 days after May 15, 2026, the notice must be received not later than the 90th day prior to such annual meeting, or if later, the 10th day following the date on which the public disclosure of the date of such annual meeting was made. The written notice must set forth the information specified in the Bylaws.
If you wish to present a proposal, but you fail to notify us by such deadline, you will not be entitled to present the proposal at the 2026 annual meeting.
Only persons who are nominated in accordance with the procedures set forth in our Bylaws are eligible for election as directors. Nominations of persons for election to the Board may be made at a meeting of stockholders at which directors are to be elected only (i) by or at the direction of the Board; or (ii) by any stockholder of the Company entitled to vote for the election of directors at the annual meeting who complies with the notice procedures set forth in our Bylaws. A director nomination made by a stockholder must be delivered or mailed to and received at our principal executive offices not less than 120 days nor more than 150 days prior to the anniversary date of the Annual Meeting; provided, however, if the date of the 2026 annual meeting is more than 30 days before or more than 60 days after such the anniversary date of the Annual Meeting, notice by the stockholder to be timely must be so delivered, or mailed and received not later than the 90th day prior to the 2026 annual meeting, or if later, the 10th day following the date on which the public disclosure of the date of such Annual Meeting was so made. Pursuant to our Bylaws, the deadline for submitting nominations for directors for our annual meeting in 2026 is January 15, 2026, but no nominations may be submitted before December 24, 2025.
The Bylaws also provide that a stockholder satisfying the above notice requirements may nominate an independent director for inclusion in our proxy statement, if the additional specified conditions set forth in our Bylaws, are satisfied.
Stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice to our Corporate Secretary that sets for the information required by Rule 14a-19 of the Exchange Act in accordance with and within the time period prescribed in the advance notice provisions of our Bylaws.
|
|
LSB Industries, Inc. Proxy Statement 74 |
Available Information
We file or furnish annual, quarterly and current reports and other documents with the SEC under the Exchange Act. The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0030. Also, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC. The public can obtain any documents we file with the SEC at www.sec.gov.
We also make available free of charge through our Internet website (www.lsbindustries.com) our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. In addition to the reports filed or furnished with the SEC, we publicly disclose material information from time to time in press releases, at Annual Meetings of stockholders, in publicly accessible conferences and investor presentations, and through our website.
A copy of the Company’s 2024 Annual Report accompanies this Proxy Statement, which Annual Report includes the Company’s 2024 Form 10-K. Copies of exhibits to the Form 10‑K are available upon request, but a reasonable copy fee per page will be charged to the requesting stockholder.
One copy of the Notice, this Proxy Statement and the Company’s 2024 Annual Report will be sent to stockholders who share an address, unless they have notified the Company that they want to continue receiving multiple packages. This practice, known as "householding," is designed to reduce duplicate mailings and save significant printing and postage costs. If you received a householding mailing this year and you would like to have additional copies of this Proxy Statement and the Company’s 2024 Annual Report mailed to you or you would like to opt out of this practice for future mailings, the Company will promptly deliver such additional copies to you if you submit your request in writing to the address below. You may also contact the Company in the same manner if you received multiple copies of the materials and would prefer to receive a single copy in the future.
Requests for documents relating to the Company should be directed to:
Director—Communications Department
c/o LSB Industries, Inc.
3505 NW 63rd Street, Suite 500
Oklahoma City, Oklahoma 73116
(405) 235-4546
Whether or not you plan to attend the Annual Meeting, you are urged to complete, date and sign the enclosed proxy card and return it in the accompanying envelope or follow the instructions provided for voting by phone or via the Internet, if applicable. Prompt response will greatly facilitate arrangements for the Annual Meeting, and your cooperation is appreciated. Stockholders who attend the Annual Meeting may vote their shares personally even though they have sent in their proxy card or voted by phone or the Internet.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 15, 2025
The Company’s Notice, Proxy Statement for the 2024 Annual Meeting of Stockholders and Annual Report for the year ended December 31, 2024 are available online at www.proxydocs.com/LXU.
|
By order of the Board of Directors, |
|
|
|
Michael J. Foster |
Oklahoma City, Oklahoma |
Executive Vice President, |
April 15, 2025 |
Secretary and General Counsel |
|
|
LSB Industries, Inc. Proxy Statement 75 |
Appendix A
LSB Industries, Inc. 2025 Long-Term Incentive Plan
LSB Industries, Inc.
2025 LONG-TERM INCENTIVE PLAN
The LSB Industries, Inc. 2025 Long-Term Incentive Plan (the “Plan”) was adopted by the Board of Directors of LSB Industries, Inc., a Delaware corporation (the “Company”), effective as of April 9, 2025 (the “Board Approval Date”) to be effective as of the date the Plan is approved by the Company’s stockholders (the “Effective Date”).
PURPOSE
The purpose of the Plan is to attract and retain the services of key Employees, key Contractors, and Outside Directors of the Company and its Subsidiaries and to provide such persons with a proprietary interest in the Company through the granting of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Awards, Dividend Equivalent Rights, Other Awards, and Tandem Awards, whether granted singly, or in combination, or in tandem, that will:
With respect to Reporting Participants, the Plan and all transactions under the Plan are intended to comply with all applicable conditions of Rule 16b-3 promulgated under the Exchange Act. To the extent any provision of the Plan or action by the Committee fails to so comply, such provision or action shall be deemed null and void ab initio, to the extent permitted by law and deemed advisable by the Committee.
DEFINITIONS
For the purpose of the Plan, unless the context requires otherwise, the following terms shall have the meanings indicated:
|
Appendix A |
LSB Industries, Inc. Proxy Statement 76 |
For purposes hereof:
“Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
“Beneficial Owner” shall have the meaning set forth in Rule 13d-3 under the Exchange Act except that a Person shall be deemed to be the “Beneficial Owner” of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants, options or otherwise, without regard to the 60-day period referred to in such rule).
“Company” shall mean, unless as otherwise provided in an Award Agreement, (i) the Company, as defined in Section 2.12; (ii) the entity for whom a Participant performs services for which
|
Appendix A |
LSB Industries, Inc. Proxy Statement 77 |
an Award is granted; and (iii) an entity that is a stockholder owning more than 50% of the total number of outstanding shares of Common Stock (or other equity interests) and total voting power (i.e., a majority stockholder) of the Company or entity identified in (ii), or any entity in a chain of entities in which each entity is a majority stockholder of another entity in the chain, ending on the Company or the entity identified in (ii).
“Gross Fair Market Value” shall mean the value of the Company’s assets or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
“Person” means any person or entity of any nature whatsoever, specifically including an individual, a firm, a company, a corporation, a partnership, a limited liability company, a trust or other entity; a Person, together with that Person’s Affiliates and Associates (as those terms are defined in Rule 12b-2 under the Exchange Act, provided that “registrant” as used in Rule 12b-2 shall mean the Company), and any Persons acting as a partnership, limited partnership, joint venture, association, syndicate or other group (whether or not formally organized), or otherwise acting jointly or in concert or in a coordinated or consciously parallel manner (whether or not pursuant to any express agreement), for the purpose of acquiring, holding, voting or disposing of securities of the Company with such Person, shall be deemed a single “Person.”
Notwithstanding the foregoing, no transaction or series of transactions shall be deemed to constitute a Change in Control unless and to the extent such transaction or transactions constitute a change in ownership or control under Section 409A of the Code. Additionally, for purposes of this Section 2.7, Section 318(a) of the Code, regarding constructive ownership, shall apply to determine stock ownership; provided, however, that any stock underlying unvested Nonqualified Stock Options or Incentive Stock Options shall not be treated as owned by such Participant who owns such Nonqualified Stock Option or Incentive Stock Option.
|
Appendix A |
LSB Industries, Inc. Proxy Statement 78 |
|
Appendix A |
LSB Industries, Inc. Proxy Statement 79 |
|
Appendix A |
LSB Industries, Inc. Proxy Statement 80 |
|
Appendix A |
LSB Industries, Inc. Proxy Statement 81 |
ADMINISTRATION
Membership on the Committee shall be limited to those members of the Board who are “non-employee directors” as defined in Rule 16b-3 promulgated under the Exchange Act. The Committee shall select one of its members to act as its Chairman. A majority of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the act of the Committee.
|
Appendix A |
LSB Industries, Inc. Proxy Statement 82 |
The Committee may delegate to officers of the Company, pursuant to a written delegation, the authority to perform specified functions under the Plan. Any actions taken by any officers of the Company pursuant to such written delegation of authority shall be deemed to have been taken by the Committee.
With respect to restrictions in the Plan that are based on the requirements of Rule 16b‑3 promulgated under the Exchange Act, Section 422 of the Code, the rules of any exchange or inter-dealer quotation system upon which the Company’s securities are listed or quoted, or any other Applicable Law, to the extent that any such restrictions are no longer required by Applicable Law, the Committee shall have the sole discretion and authority to grant Awards that are not subject to such formerly mandated restrictions and/or to waive any such formerly mandated restrictions with respect to outstanding Awards.
ELIGIBILITY
Any Employee (including an Employee who is also a director or an officer), Contractor or Outside Director of the Company whose judgment, initiative, and efforts contributed or may be expected to contribute to the successful performance of the Company is eligible to participate in the Plan; provided that only Employees of a Corporation shall be eligible to receive Incentive Stock Options. The Committee, upon its own action, may grant, but shall not be required to grant, an Award to any Employee, Contractor or Outside Director. Awards may be granted by the Committee at any time and from time to time to new Participants, or to then Participants, or to a greater or lesser number of Participants, and may include or exclude previous Participants, as the Committee shall determine. Except as required by this Plan, Awards need not contain similar provisions. The Committee’s determinations under the Plan (including without limitation determinations of which Employees, Contractors or Outside Directors, if any, are to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements evidencing same) need not be uniform and may be made by it selectively among Participants who receive, or are eligible to receive, Awards under the Plan.
SHARES SUBJECT TO PLAN
|
Appendix A |
LSB Industries, Inc. Proxy Statement 83 |
GRANT OF AWARDS
|
Appendix A |
LSB Industries, Inc. Proxy Statement 84 |
|
Appendix A |
LSB Industries, Inc. Proxy Statement 85 |
|
Appendix A |
LSB Industries, Inc. Proxy Statement 86 |
If the Committee determines, in its sole discretion, that the established performance measures or objectives are no longer suitable because of a change in the Company’s business, operations, corporate structure, or for other reasons that the Committee deemed satisfactory, the Committee may modify the performance measures or objectives and/or the performance period.
|
Appendix A |
LSB Industries, Inc. Proxy Statement 87 |
|
Appendix A |
LSB Industries, Inc. Proxy Statement 88 |
AWARD PERIOD; VESTING
EXERCISE OR CONVERSION OF INCENTIVE
|
Appendix A |
LSB Industries, Inc. Proxy Statement 89 |
|
Appendix A |
LSB Industries, Inc. Proxy Statement 90 |
The distribution of any cash or Common Stock pursuant to the foregoing sentence shall be made at such time as set forth in the Award Agreement.
AMENDMENT OR DISCONTINUANCE
Subject to the limitations set forth in this Article 9, the Board may at any time and from time to time, without the consent of the Participants, alter, amend, revise, suspend, or discontinue the Plan in whole or in part; provided, however, that no amendment for which stockholder approval is required either (a) by any securities exchange or inter-dealer quotation system on which the Common Stock is listed or traded or (b) in order for the Plan and Incentives awarded under the Plan to continue to comply with Sections 421 and 422 of the Code, including any successors to such Sections, or other Applicable Law, shall be effective unless such amendment shall be approved by the requisite vote of the stockholders of the Company entitled to vote thereon. Any such amendment shall, to the extent deemed necessary or advisable by the Committee, be applicable to any outstanding Incentives theretofore
|
Appendix A |
LSB Industries, Inc. Proxy Statement 91 |
granted under the Plan, notwithstanding any contrary provisions contained in any Award Agreement. In the event of any such amendment to the Plan, the holder of any Incentive outstanding under the Plan shall, upon request of the Committee and as a condition to the exercisability thereof, execute a conforming amendment in the form prescribed by the Committee to any Award Agreement relating thereto. Notwithstanding anything contained in this Plan to the contrary, unless required by law, no action contemplated or permitted by this Article 9 shall adversely affect any rights of Participants or obligations of the Company to Participants with respect to any Incentive theretofore granted under the Plan without the consent of the affected Participant. For purposes of clarity, any amendment to an existing Award resulting in a less favorable tax consequence to a Participant under the Award shall not be considered to adversely affect the rights of the Participant.
TERM
The Plan shall be effective as of the Effective Date and unless sooner terminated by action of the Board, the Plan will terminate on the 10th anniversary of the Effective Date, but Incentives granted before that date will continue to be effective in accordance with their terms and conditions.
CAPITAL ADJUSTMENTS
In the event that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, rights offering, reorganization, merger, consolidation, split-up, spin-off, split-off, combination, subdivision, repurchase, or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, or other similar corporate transaction or event affects the fair value of an Award, then the Committee shall adjust any or all of the following so that the fair value of the Award immediately after the transaction or event is equal to the fair value of the Award immediately prior to the transaction or event (a) the number of shares and type of Common Stock (or the securities or property) which thereafter may be made the subject of Awards, (b) the number of shares and type of Common Stock (or other securities or property) subject to outstanding Awards, (c) the Option Price of each outstanding Award, (d) the amount, if any, the Company pays for forfeited shares of Common Stock in accordance with Section 6.4, and (e) the number of or SAR Price of shares of Common Stock then subject to outstanding SARs previously granted and unexercised under the Plan, to the end that the same proportion of the Company’s issued and outstanding shares of Common Stock in each instance shall remain subject to exercise at the same aggregate SAR Price; provided, however, that the number of shares of Common Stock (or other securities or property) subject to any Award shall always be a whole number. Notwithstanding the foregoing, no such adjustment shall be made or authorized to the extent that such adjustment would cause the Plan or any Stock Option to violate Section 422 of the Code or Section 409A of the Code. Such adjustments shall be made in accordance with the rules of any securities exchange, stock market, or stock quotation system to which the Company is subject.
The computation of any adjustment under this Article 11 shall be conclusive and shall be binding upon each affected Participant and upon the occurrence of any such adjustment, the Company shall provide notice to each affected Participant of its computation of such adjustment.
RECAPITALIZATION, MERGER AND CONSOLIDATION
|
Appendix A |
LSB Industries, Inc. Proxy Statement 92 |
|
Appendix A |
LSB Industries, Inc. Proxy Statement 93 |
An Award that by its terms would be fully vested or exercisable upon a Change in Control will be considered vested or exercisable for purposes of Section 12.4(a) hereof.
LIQUIDATION OR DISSOLUTION
Subject to Section 12.4 hereof, in case the Company shall, at any time while any Incentive under this Plan shall be in force and remain unexpired, (a) sell all or substantially all of its property, or (b) dissolve, liquidate, or wind up its affairs, then each Participant shall be entitled to receive, in lieu of each share of Common Stock of the Company which such Participant would have been entitled to receive under the Incentive, the same kind and amount of any securities or assets as may be issuable, distributable, or payable upon any such sale, dissolution, liquidation, or winding up with respect to each share of Common Stock of the Company. If the Company shall, at any time prior to the expiration of any Incentive, make any partial distribution of its assets, in the nature of a partial liquidation, whether payable in cash or in kind (but excluding the distribution of a cash dividend payable out of earned surplus and designated as such) and an adjustment is determined by the Committee to be appropriate to prevent the dilution of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, make such adjustment in accordance with the provisions of Article 11 hereof.
INCENTIVES IN SUBSTITUTION FOR
INCENTIVES GRANTED BY OTHER ENTITIES
Incentives may be granted under the Plan from time to time in substitution for similar instruments held by employees, independent contractors or directors of a corporation, partnership, or limited liability company who become or are about to become Employees, Contractors or Outside Directors of the Company or any Subsidiary as a result of a merger or consolidation of the employing corporation with the Company, the acquisition by the Company of equity of the employing entity, or any other similar transaction pursuant to which the Company becomes the successor employer. The terms and conditions of the substitute Incentives so granted may vary from the terms and conditions set forth in this Plan to such extent as the Committee at the time of grant may deem appropriate to conform, in whole or in part, to the provisions of the incentives in substitution for which they are granted.
MISCELLANEOUS PROVISIONS
|
Appendix A |
LSB Industries, Inc. Proxy Statement 94 |
|
Appendix A |
LSB Industries, Inc. Proxy Statement 95 |
Except as otherwise provided herein, Awards may not be transferred, assigned, pledged, hypothecated or otherwise conveyed or encumbered other than by will or the laws of descent and distribution. Notwithstanding the foregoing, the Committee may, in its discretion, authorize all or a portion of an Award to be granted to a Participant on terms which permit transfer by such Participant to (a) the spouse (or former spouse), children or grandchildren of the Participant (“Immediate Family Members”), (b) a trust or trusts for the exclusive benefit of such Immediate Family Members, (c) a partnership in which the only partners are (1) such Immediate Family Members and/or (2) entities which are controlled by the Participant and/or Immediate Family Members, (d) an entity exempt from federal income tax pursuant to Section 501(c)(3) of the Code or any successor provision, or (e) a split interest trust or pooled income fund described in Section 2522(c)(2) of the Code or any successor provision, provided that(x) there shall be no consideration for any such transfer, (y) the Award Agreement pursuant to which such Award is granted must be approved by the Committee and must expressly provide for transferability in a manner consistent with this Section, and (z) subsequent transfers of transferred Award shall be prohibited except those by will or the laws of descent and distribution.
Following any transfer, any such Award shall continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that for purposes of Articles 8, 9, 11, 13 and 15 hereof the term “Participant” shall be deemed to include the transferee. The events of Termination of Service shall continue to be applied with respect to the original Participant, following which the Award shall be transferable, exercisable or convertible by the transferee only to the extent and for the periods specified in the Award Agreement. The Committee and the Company shall have no obligation to inform any transferee of an Award of any expiration, termination, lapse or acceleration of such Award. The Company shall have no obligation to register with any federal or state securities commission or agency any Common Stock issuable or issued under an Award that has been transferred by a Participant under this Section 15.8.
|
Appendix A |
LSB Industries, Inc. Proxy Statement 96 |
A copy of this Plan shall be kept on file in the principal office of the Company in Dallas, Texas.
***************
|
Appendix A |
LSB Industries, Inc. Proxy Statement 97 |
|
Appendix A |
LSB Industries, Inc. Proxy Statement 98 |
|
Proxy Card |
LSB Industries, Inc. Proxy Statement 99 |
|
Proxy Card |
LSB Industries, Inc. Proxy Statement 100 |