10B5-1 SALES PLAN
This
10B5-1 SALES PLAN (the "Sales Plan") is dated this 5th day of December 2006,
between Xxxx X. Xxxxxx, an individual ("Seller"), and Capital West Securities,
Inc. ("Broker"). For good and valuable consideration, the receipt of which
is
acknowledged, Seller and Broker hereby agree as follows:
1. Background.
This
Sales Plan is entered into between Seller and Broker for the purpose of
establishing a trading plan that complies with the requirements of Rule
10b5-1(c)(1) promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Seller is establishing this Sales Plan in order to permit
the disposition of a portion of Seller's holdings of the common stock, par
value
$0.10 per share (the "Stock"), of LSB Industries, Inc. (the "Issuer"). Seller
desires to engage Broker to effect sales of shares of stock in accordance with
this Sales Plan.
2. Appointment
of Broker; Sales.
Seller
hereby appoints Broker to sell shares of Stock pursuant to the terms and
conditions set forth below. Subject to such terms and conditions, Broker accepts
such appointment.
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2.1
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Authorized
Selling.
Commencing, December 6, 2006 (the "Effective Date") and continuing
for a
period of twelve (12) calendar months after the Effective Date (the
"Effective Period"), Broker is authorized and directed, from time
to time
during the Effective Period, to sell up to a maximum of 25,000 shares
of
Stock, at Broker's discretion, on the American Stock Exchange ("AMEX")
at
a price per share at or above $0.15 below market price or $15.00,
whichever is higher, such prices being before deducting any commission,
commission equivalent, xxxx-up or differential, or other expenses
of
sale.
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2.2
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Market
Disruptions.
Seller understands that Broker may not be able to effect a sale due
to a
market disruption. If any sale cannot be executed due to a market
disruption, Broker shall effect such sale as promptly as practical
after
the cessation or termination of such market disruption pursuant to
this
Sales Plan.
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3. Term.
This
Sales Plan is effective on the Effective Date. Broker will cease selling Stock
and the Sales Plan will terminate on the earlier of:
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(a)
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December
6, 2007;
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(b)
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the
completion of the sale of 25,000 shares of Stock pursuant to this
Sales
Plan;
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(c)
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notice
to Seller or Broker that Seller or Broker is not able to effect the
sale
of Stock under this Sales Plan due to a legal, regulatory or contractual
restriction applicable to Seller or
Broker;
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(d)
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death
of Seller;
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(e)
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Seller
or Broker's reasonable determination that the Sales Plan does not
comply
with Rule 10b5-1 or other applicable securities
laws;
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(f)
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written
notice by Seller or Seller's counsel to Broker informing Broker of
Seller's suspension or termination of the Sales Plan;
or
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(g)
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written
notice by Broker or Broker's counsel to Seller informing Seller of
Broker's suspension or termination of the Sales
Plan.
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4. Seller's
Representations, Warranties and Covenants.
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4.1
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As
of the date of this Sales Plan, Seller (a) is not aware of material,
nonpublic information with respect to the Issuer or any securities
of the
Issuer (including the Stock), (b) is not subject to any legal, regulatory
or contractual restriction or undertaking that would prevent Broker
from
conducting sales in accordance with this Sales Plan and (c) is entering
into this Sales Plan in good faith and not as part of a plan or scheme
to
evade the prohibitions of Rule 10b5-1 or compliance with the federal
securities laws.
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4.2
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Seller
shall immediately notify Broker if Seller becomes subject to a legal,
regulatory or contractual restriction or undertaking that would prevent
Broker from making sales pursuant to this Sales
Plan.
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4.3
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Seller
is currently able to sell shares of Stock in accordance with the
Issuer's
xxxxxxx xxxxxxx policies and Seller has obtained the approval of
the
Issuer's counsel to enter into this Sales Plan.
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4.4
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The
shares of Stock subject to the Sales Plan are free and clear of liens
and
encumbrances of any kind.
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4.5
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While
the Sales Plan is in effect, Seller will not, directly or indirectly,
(a)
disclose to Broker or any persons affiliated with Broker who is effecting
sales under this Sales Plan any information concerning the Stock
or the
Issuer that might influence the execution of this Sales Plan; or
(b)
engage in offsetting or hedging transactions in violation of Rule
10b5-1.
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4.6
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Seller
agrees to make all filings, if any, required under Sections 13(d)
and 16
of the Exchange Act.
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4.7
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Seller
acknowledges and agrees that Seller does not have, and shall not
attempt
to exercise, any influence over how, when, or whether to effect sales
of
Stock pursuant to this Sales Plan.
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5. Rule
144.
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5.1
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Broker
agrees to conduct all sales under this Sales Plan in accordance with
the
manner of sale requirement of Rule 144, if applicable, under the
Securities Act of 1933, as amended (the "Act"), if applicable. If
Rule 144
is applicable, Broker will not effect any sale which would exceed
the then
applicable volume limitation under Rule 144, assuming Broker's sales
under
this Sales Plan are the only sales subject to that limitation. Seller
agrees not to take, and agrees to cause any person or entity with
which
Seller would be required to aggregate sales of Stock pursuant to
paragraph
(a)(2) or (e) of Rule 144 not to take, any action that would cause
the
sales under this Sales Plan not to comply with Rule 144.
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5.2
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Broker
will be responsible for completing and filing on behalf of Seller
each
required Form 144. Seller hereby grants Broker a power of attorney
to
complete and file on behalf of Seller Forms 144. Seller understands
and
agrees that Broker will make one Form 144 filing at the beginning
of each
three-month period commencing on the Effective Date. Each Form 144
filed
by Broker on behalf of Seller shall (a) state that the sales are
being
effected in accordance with an existing Sales Plan intended to comply
with
Rule 10b5-1, (b) indicate the date the Sales Plan was adopted, and
(c)
state that the representations are made as of such
date.
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6. Certain
Events.
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6.1
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In
the event of a stock split or reverse stock split of the Stock, the
maximum number of shares of Stock to be sold and the minimum price
established above in paragraph 2 will be automatically adjusted
proportionately.
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6.2
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In
the event of a reincorporation or other corporate reorganization
resulting
in an automatic share-for-share exchange of new shares for the type
of
Stock subject to the Sales Plan, then the new shares will automatically
replace the type of Stock originally specified in the Sales
Plan.
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7. General.
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7.1
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This
Sales Plan is intended to comply with the requirements of Rule
10b5-1(c)(1)(i)(B) under the Exchange Act, and this Sales Plan shall
be
interpreted to comply with the requirements of Rule
10b5-1(c).
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7.2
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Broker
shall immediately notify Seller if Broker becomes subject to a legal,
regulatory or contractual restriction or undertaking that would prevent
Broker from making sales pursuant to this Sales
Plan.
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7.3
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This
Sales Plan may be modified or amended only upon the written agreement
of
Seller and Broker.
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7.4
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This
Sales Plan shall be governed by and construed in accordance with
the laws
of the State of Oklahoma and may be modified or amended only by a
writing
signed by the parties hereto.
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7.5
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Proceeds
from each sale of Stock effective under this Sales Plan will be delivered
to Seller's Brokerage account, or such other account as directed
in
writing by Seller to Broker.
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7.6
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This
Sales Plan may be signed in any number of counterparts, each shall
be an
original with the same effect as if all of the signatures were upon
the
same instrument.
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7.7
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If
any provision of this Sales Plan is or becomes inconsistent with
any
applicable present or future law, rule or regulation, that provision
will
be deemed modified or, if necessary, rescinded in order to comply
with the
relevant law, rule or regulation. All of the provisions of this Sales
Plan
will continue and remain in full force and effect.
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IN
WITNESS WHEREOF, the undersigned have signed this Sales Plan as of the date
first written above.
/s/
Xxxx X. Xxxxxx
XXXX
X.
XXXXXX
("Seller")
CAPITAL
WEST SECURITIES, INC.
By: /s/
Xxx X. Xxxxxxx
Name:
Title:
("Broker")
