Exhibit 10.1

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (“Agreement”) is entered into this 14th day of
January, 2016 effective as of December 31, 2015 (the “Effective Date”), by and
between LSB Industries, Inc., a Delaware corporation (together with its
successors and assigns, the “Company”), and Mark Behrman, an individual (the
“Executive”).

WHEREAS, the Company and the Executive desire to enter into this Agreement to
set out the terms and conditions for the continuing employment relationship
between the Executive and the Company.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:

1. Term. The Company agrees to employ the Executive pursuant to the terms of
this Agreement, and the Executive agrees to be so employed, for a term of three
(3) years (the “Initial Term”) commencing as of the Effective Date. On each
anniversary of the Effective Date following the Initial Term, the term of this
Agreement shall be automatically extended for successive one-year periods,
provided, however, that either party hereto may elect not to extend this
Agreement by giving written notice to the other party at least one hundred and
eighty (180) days prior to any such anniversary date. Notwithstanding the
foregoing, the Executive’s employment hereunder may be earlier terminated in
accordance with Section 9 hereof, subject to Section 10 hereof. Terms used
herein with initial capitalization not otherwise defined are defined in
Section 25. The period of time between the Effective Date and the termination of
the Executive’s employment hereunder shall be referred to as the “Employment
Period.”

2. Position and Duties. During the Employment Period, the Executive shall serve
as Executive Vice President of Finance and Chief Financial Officer of the
Company, shall report directly to the Company’s Chief Executive Officer. In his
capacity as Executive Vice President of Finance and Chief Financial Officer, the
Executive shall have the duties, responsibilities and authorities customarily
associated with the position of an executive vice president of finance and chief
financial officer in a company the size and nature of the Company. The Executive
shall devote the Executive’s reasonable best efforts and substantially all of
the Executive’s business time to the performance of the Executive’s duties
hereunder and the advancement of the business and affairs of the Company and
shall be subject to, and shall comply in all material respects with, the
policies of the Company applicable to the Executive; provided that the Executive
shall be entitled (i) to serve as a member of the board of directors of a
reasonable number of other companies, subject to the advance approval of the
Company’s Board of Directors (the “Board”), which approval shall not be
unreasonably withheld, (ii) to serve on civic, charitable, educational,
religious, public interest or public service boards, and (iii) to manage the
Executive’s personal and family investments, in each case, to the extent such
activities do not materially interfere, as determined by the Board in good
faith, with the performance of the Executive’s duties and responsibilities
hereunder.

3. Place of Performance. During the Employment Period, the Executive shall be
based primarily at the Company’s offices in Oklahoma City, Oklahoma.

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4. Compensation and Benefits; Equity Awards.

(a) Base Salary. During the Employment Period, the Company shall pay to the
Executive a base salary (the “Base Salary”) at the rate of no less than
$500,000 per calendar year, less applicable deductions. The Base Salary shall be
reviewed for increase by the Board no less frequently than annually and shall be
increased in the discretion of the Board and any such adjusted Base Salary shall
constitute the “Base Salary” for purposes of this Agreement. The Base Salary
shall be paid in substantially equal installments in accordance with the
Company’s regular payroll procedures.

(b) Annual Bonus. During the Employment Period, the Executive shall be paid an
annual cash performance bonus (an “Annual Bonus”) under the Company’s annual
bonus plan (as in effect from time to time for senior executives) in respect of
the 2016 fiscal year and each fiscal year that ends during the Employment Period
(each, a “bonus period”), to the extent earned based on performance against
performance criteria. The performance criteria for any particular fiscal year
shall be determined by the Compensation Committee of the Board (the
“Committee”), in good faith, after consultation with the Executive, no later
than sixty (60) days after the commencement of the relevant bonus period. The
Executive’s annual bonus opportunity shall be no less than 50% of the
Executive’s Base Salary as of the beginning of the applicable bonus period (the
“Target Bonus”), if target levels of performance for that year are achieved, up
to a maximum of 100% of the Executive’s Base Salary. The Executive’s Annual
Bonus for a bonus period shall be determined by the Committee after the end of
the applicable bonus period and shall be paid to the Executive when annual
bonuses for that year are paid to other senior executives of the Company
generally, but in no event later than March 15 of the year following the year to
which such Annual Bonus relates.

(c) Equity Awards. In each fiscal year during the Employment Period commencing
in 2018, the Executive shall be granted a number of shares of restricted stock
under the Company’s applicable long-term incentive plan with a value equal to
not less than 150% of the Executive’s then current Base Salary, with such number
of shares of restricted stock to be calculated based the Fair Market Value (as
defined in the applicable plan) of a share of common stock on the date of grant
(the “Annual Equity Award”). For each fiscal year during the Employment Period
commencing with the 2018 fiscal year, the Company shall grant the Annual Equity
Award on the applicable anniversary of the Effective Date (or the closest
business day thereafter if such anniversary is a weekend or holiday). The terms
and conditions applicable to any Annual Equity Award shall be determined by the
Committee in accordance with the Company’s applicable long-term incentive plan
to the extent consistent with the terms of this Agreement and shall be no less
favorable to the Executive than the terms applicable to any other senior
executive of the Company. Vesting of Annual Equity Awards (including the
December Grant referred to below) shall occur one-third (1/3) on each
anniversary of the date of grant and any outstanding equity awards shall fully
vest immediately prior to a Change in Control. It is acknowledged that effective
as of December 31, 2015, the Company granted to the Executive an award of
208,914 shares of restricted stock (the “December Grant”). The December Grant
shall vest one-third (1/3) on each anniversary of the grant date such that it
shall be fully vested on December 31, 2018.

 

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(d) Vacation; Benefits. During the Employment Period, the Executive shall be
entitled to four (4) weeks of paid vacation per calendar year (as prorated for
partial years) in accordance with the applicable policies of the Company, which
shall be accrued and used in accordance with such policies. During the
Employment Period, the Executive shall be entitled to participate in any
employee benefit plan that the Company has adopted or may adopt, maintain or
contribute to for the benefit of its employees generally, subject to satisfying
the applicable eligibility requirements, except to the extent such plans are
duplicative of the benefits otherwise provided to the Executive hereunder. The
Executive’s participation will be subject to the terms of the applicable plan
documents and generally applicable Company policies. The foregoing, however,
shall not be construed to require the Company to establish any such plans or to
prevent the modification or termination of such plans once established.

5. Expenses. The Company shall reimburse the Executive promptly for all expenses
reasonably incurred by the Executive in the performance of his duties in
accordance with policies which may be adopted from time to time by the Company
following presentation by the Executive of an itemized account, including
reasonable substantiation, of such expenses. The Executive shall also, at the
Executive’s option, receive the use of a Company car or a car allowance of $650
per month, as such amount may be increased from time to time, during the
Employment Period, in the sole discretion of the Committee or the Board; and the
Company shall reimburse the Executive’s attorney directly for the costs
associated with the negotiation of this Agreement and related documents, subject
to a cap of $5,000.

6. Confidentiality and Non-Disclosure. The Company and the Executive acknowledge
and agree that during the Executive’s employment with the Company, the Executive
will have access to and may assist in developing Confidential Information and
will occupy a position of trust and confidence with respect to the affairs and
business of the Company and the Company Affiliates. The Executive agrees that
the following obligations are necessary to preserve the confidential and
proprietary nature of Confidential Information and to protect the Company and
the Company Affiliates against misuse of such information:

(a) Non-Disclosure. After the Executive’s employment with the Company ends, the
Executive will not use, disclose, copy or transfer any Confidential Information
unless authorized in writing by the Company. Anything herein to the contrary
notwithstanding, the provisions of this Section 6(a) shall not apply (i) when
disclosure is required by law or by any court, arbitrator, mediator or
administrative or legislative body (including any committee thereof) with actual
or apparent jurisdiction to order the Executive to disclose or make accessible
any information, provided that prior to any such disclosure the Executive shall
provide the Company with reasonable notice of the requirements to disclose and
an opportunity to object to such disclosure and the Executive shall cooperate
with the Company in filing such objection; (ii) as to information that was in
the public domain or is readily available to the public at the time of its
disclosure by the Executive through means other than due to the Executive’s
violation of this Section 6(a); or (iii) to the extent necessary in connection
with any disputes between the parties with respect to the interpretation and/or
enforcement of this Agreement and any other agreements between the parties.

 

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(b) Materials. The Executive will use Confidential Information only for normal
and customary use in the Company’s business, as determined reasonably and in
good faith by the Executive. The Executive will return to the Company all
Confidential Information and copies thereof and all other property of the
Company or any Company Affiliate at any time upon the request of the Company and
in any event promptly after the Executive’s employment ends. The Executive
agrees to identify and return to the Company any copies of any Confidential
Information after the Executive ceases to be employed by the Company. Anything
to the contrary notwithstanding, nothing in this Section 6 shall prevent the
Executive from retaining a home computer (provided all Confidential Information
has been removed), papers and other materials of a personal nature, including
diaries, calendars and Rolodexes, information relating to his compensation or
relating to reimbursement of expenses, information that may be needed for tax
purposes, and copies of plans, programs and agreements relating to his
employment or termination thereof.

7. Non Solicitation/Non-Competition.

(a) During the Non-Compete Period, the Executive shall not (A) directly solicit,
or assist any person or entity in soliciting, any established customer for the
purpose of a Competitive Enterprise providing and/or selling any products that
are provided and/or sold by the Company or its subsidiaries to such established
customer, or performing any services that are performed by the Company or its
subsidiaries for such established customer, (B) interfere with or damage (or
attempt to interfere with or damage) any relationship and/or agreement between
the Company or its subsidiaries and any established customer; or (C) directly or
indirectly solicit any employee of the Company or the Company Affiliates with a
view toward inducing any such employee to go to work for another person or third
party or to cease or end their employment relationship.

(b) During the Non-Compete Period, the Executive shall not associate (including,
but not limited to, association as a sole proprietor, owner, employer, partner,
principal, investor, joint venturer, shareholder, associate, employee, member,
consultant, contractor, director or otherwise) with any Competitive Enterprise;
provided, however, that Executive may own, as a passive investor, securities of
any such entity that has outstanding publicly traded securities so long as his
direct holdings in any such entity shall not in the aggregate constitute more
than one percent (1%) of the voting power of such entity. The Executive
acknowledges that this covenant has a unique, very substantial and immeasurable
value to the Company, that the Executive has sufficient assets and skills to
provide a livelihood for the Executive while such covenant remains in force and
that, as a result of the foregoing, in the event that the Executive breaches
such covenant, monetary damages would be an insufficient remedy for the Company
and equitable enforcement of the covenant would be proper.

(c) If the restrictions contained in Section 7 shall be determined by any court
of competent jurisdiction to be unenforceable, Section 7 shall be modified in
order for it to be enforceable to maximum allowed by law.

(d) Conflicting Obligations and Rights. The Executive agrees to inform the
Company of any apparent conflicts between the Executive’s work for the Company
and any obligations the Executive may have to preserve the confidentiality of
another’s proprietary information or related materials before using the same on
the Company’s behalf. The Company shall receive such disclosures in confidence
and consistent with the objectives of avoiding any conflict of obligations and
rights or the appearance of any conflict of interest.

 

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(e) Enforcement. The Executive acknowledges that in the event of any breach of
this Section 7 , the business interests of the Company and the Company
Affiliates will be irreparably injured, the full extent of the damages to the
Company and the Company Affiliates will be impossible to ascertain, monetary
damages will not be an adequate remedy for the Company and the Company
Affiliates, and the Company will be entitled to enforce this Agreement by a
temporary, preliminary and/or permanent injunction or other equitable relief,
without the necessity of posting bond or security, which the Executive expressly
waives. The Executive understands that the Company may waive some of the
requirements expressed in this Agreement, but that such a waiver to be effective
must be made in writing and should not in any way be deemed a waiver of the
Company’s right to enforce any other requirements or provisions of this
Agreement. The Executive agrees that each of the Executive’s obligations
specified in this Agreement is a separate and independent covenant and that the
unenforceability of any of them shall not preclude the enforcement of any other
covenants in this Agreement.

(f) No Other Restrictions. Except as otherwise provided herein or in the
Confidentiality and Assignment Agreement the Executive executed on March 3, 2014
(the “Confidentiality Agreement”), there are no other restrictions on the
Executive’s employment following termination of his employment.

8. Cooperation. Following any termination of employment, the Executive agrees to
reasonably cooperate (taking into account his other business and personal
commitments) with any investigation, suit or claim involving the Company and of
which the Executive has knowledge, provided any such cooperation is not adverse
to his legal interests. The Company agrees to reimburse the Executive for any
costs incurred by him in connection with such cooperation, including payment of
separate counsel for the Executive if he reasonably determines such separate
representation is warranted by the circumstances.

9. Termination of Employment.

(a) Permitted Terminations. The Executive’s employment hereunder may be
terminated during the Employment Period under the following circumstances:

(i) Death. The Executive’s employment hereunder shall terminate upon the
Executive’s death.

(ii) By the Company. The Company may terminate the Executive’s employment:

(A) Disability. For Disability; or

(B) With or Without Cause. For Cause or without Cause.

(iii) By the Executive. The Executive may terminate his employment for any
reason or for no reason by giving thirty (30) days advance Notice of Termination
to the Company.

 

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(b) Termination. Any termination of the Executive’s employment by the Company or
the Executive (other than because of the Executive’s death) shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 12 hereof. For purposes of this Agreement, a “Notice of
Termination” shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon, if any, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.
Termination of the Executive’s employment shall take effect on the Date of
Termination.

(c) Effect of Termination. Upon any termination of the Executive’s employment
with the Company, and its subsidiaries, the Executive shall resign from, and
shall be considered to have simultaneously resigned from, all positions with the
Company and all of its subsidiaries.

10. Compensation Upon Termination.

(a) Death. If the Executive’s employment is terminated during the Employment
Period as a result of the Executive’s death pursuant to Section 9(a)(i), the
Employment Period shall terminate without further notice or any action required
by the Company or the Executive’s legal representatives. Upon the Executive’s
death, the Company shall pay or provide to the Executive’s representative or
estate (i) all Accrued Benefits, if any, to which the Executive is entitled,
(ii) a lump sum payment of an amount equal to a pro rata portion (based upon the
number of days the Executive was employed during the calendar year in which the
Date of Termination occurs) of the Annual Bonus based on the achievement of the
applicable performance criteria for the year in which Executive’s employment
terminates, payable at the time set forth in Section 4(b) and (iii) the
Executive’s outstanding equity awards shall vest pro-rata as of the Date of
Termination with such pro-rata portion calculated by multiplying the number of
shares of the outstanding equity award scheduled to vest on the anniversary of
the Grant Date immediately succeeding the Termination Date by a fraction, the
numerator of which is the number of days that have elapsed from the last
anniversary of the Grant Date (or if such termination of employment occurs prior
to the first anniversary of the Grant Date, then the number of days that have
elapsed from the Grant Date) through the Termination Date and the denominator of
which shall be 365. Except as set forth herein, the Company shall have no
further compensation obligations to the Executive (or the Executive’s legal
representatives or estate) under this Agreement.

(b) Disability. If the Company terminates the Executive’s employment during the
Employment Period because of the Executive’s Disability pursuant to
Section 9(a)(ii)(A), the Company shall pay to the Executive (i) all Accrued
Benefits, if any, to which the Executive is entitled, (ii) a lump sum payment of
an amount equal to a pro rata portion (based upon the number of days the
Executive was employed during the calendar year in which the Date of Termination
occurs) of the Annual Bonus based on the achievement of the applicable
performance criteria for the year in which Executive’s employment terminates,
payable at the time set forth in Section 4(b), and (iii) the Executive’s
outstanding equity awards shall vest pro-rata as of the Date of Termination with
such pro-rata portion calculated by multiplying the number of shares of the
outstanding equity award scheduled to vest on the anniversary of the Grant Date
immediately succeeding the Termination Date by a fraction, the numerator of
which

 

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is the number of days that have elapsed from the last anniversary of the Grant
Date (or if such termination of employment occurs prior to the first anniversary
of the Grant Date, then the number of days that have elapsed from the Grant
Date) through the Termination Date and the denominator of which shall be 365.
Except as set forth herein, the Company shall have no further compensation
obligations to the Executive (or the Executive’s legal representatives) under
this Agreement.

(c) Termination by the Company for Cause, or by the Executive without Good
Reason. If, during the Employment Period, the Company terminates the Executive’s
employment for Cause pursuant to Section 9(a)(ii)(B), or the Executive
terminates his employment without Good Reason, the Company shall pay to the
Executive all Accrued Benefits, if any, to which the Executive is entitled.
Except as set forth herein, the Company shall have no further compensation
obligations to the Executive under this Agreement.

(d) Certain Terminations Prior to or After a Change in Control. If, prior to the
occurrence of a Change in Control, or after the twenty-four (24) month
protection period in Section 10(e) has expired, the Company terminates the
Executive’s employment during the Employment Period other than for Cause, death
or Disability or the Executive terminates his employment hereunder with Good
Reason the Employment Period shall terminate upon the Date of Termination, and
(i) the Company shall pay or provide the Executive (or the Executive’s estate,
if the Executive dies after such termination but before receiving such amount)
(A) all Accrued Benefits, if any, to which the Executive is entitled; (B) a lump
sum payment of an amount equal to a pro rata portion (based upon the number of
days the Executive was employed during the calendar year in which the Date of
Termination occurs) of the Annual Bonus based on the achievement of the
applicable performance criteria for the year in which Executive’s employment
terminates, payable as set forth in Section 4(b); and (C) an amount equal to the
product of (x) one (1) and (y) the sum of the Executive’s (I) Base Salary, and
(II) Target Bonus, payable in a lump sum on the first payroll date following the
execution (and non-revocation) of the general release of claims described in
Section 10(g), subject to Section 10(h) and Section 24, (ii) to the extent not
already vested, all of the Executive’s outstanding equity awards shall fully
vest as of the Date of Termination, notwithstanding anything to the contrary
contained herein or in the vesting schedule in any equity award agreement
between the Company and the Executive, and (iii) the Executive and his covered
dependents shall be entitled to continued participation on the same terms and
conditions as applicable immediately prior to the Executive’s Date of
Termination for the eighteen (18) month period following the Date of Termination
in such medical, dental, and hospitalization insurance coverage in which the
Executive and his eligible dependents were participating immediately prior to
the Date of Termination; provided the Company agrees to impute as taxable income
to the Executive an amount equal to the full actuarial cost of such coverage,
for each month during which such coverage is in effect for the Executive and/or
his eligible dependents but only if and to the extent such imputation is
required for the Executive to avoid being subject to tax under Section 105(h) of
the Internal Revenue Code of 1986, as amended (the “Code”), with respect to any
payment or reimbursement of expenses made to the Executive or for the Executive
and/or any of his eligible dependent’s benefit under such health care coverage.

 

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(e) Certain Terminations Following a Change in Control. If, upon or within
twenty-four (24) months following the date of consummation of a Change in
Control, the Company terminates the Executive’s employment other than for Cause,
Death or Disability or the Executive terminates his employment hereunder with
Good Reason the Employment Period shall terminate upon the Date of Termination,
and (i) the Company shall pay or provide the Executive (or the Executive’s
estate, if the Executive dies after such termination but before receiving such
amount) (A) all Accrued Benefits, if any, to which the Executive is entitled;
(B) a lump sum payment of an amount equal to a pro rata portion (based upon the
number of days the Executive was employed during the calendar year in which the
Date of Termination occurs) of the Annual Bonus based on the achievement of the
applicable performance criteria for the year in which Executive’s employment
terminates, payable as set forth in Section 4(b); and (C) an amount equal to the
product of (x) two (2) and (y) the sum of the Executive’s (I) Base Salary, and
(II) Target Bonus, payable in a lump sum on the first payroll date following the
execution (and non-revocation) of the general release of claims described in
Section 10(g), subject to Section 10(h) and Section 24, (ii) to the extent not
already vested, all of the Executive’s outstanding equity awards shall fully
vest as of the Date of Termination, notwithstanding anything to the contrary
contained herein or in the vesting schedule in any equity award agreement
between the Company and the Executive, and (iii) the Executive and his covered
dependents shall be entitled to continued participation on the same terms and
conditions as applicable immediately prior to the Executive’s Date of
Termination for the eighteen (18) month period following the Date of Termination
in such medical, dental, and hospitalization insurance coverage in which the
Executive and his eligible dependents were participating immediately prior to
the Date of Termination; provided the Company agrees to impute as taxable income
to the Executive an amount equal to the full actuarial cost of such coverage,
for each month during which such coverage is in effect for the Executive and/or
his eligible dependents but only if and to the extent such imputation is
required for the Executive to avoid being subject to tax under Section 105(h) of
the Code, with respect to any payment or reimbursement of expenses made to the
Executive or for the Executive and/or any of his eligible dependent’s benefit
under such health care coverage.

(f) Termination of Employment Upon Expiration of the Term. Upon a notice of
non-renewal of the Employment Period by either the Company or the Executive
pursuant to Section 1 hereof, the Executive’s employment shall terminate at the
end of the Employment Period. In addition, any notice of non-renewal of the
Employment Period by the Company pursuant to Section 1 (assuming the Executive
was willing and able to continue to be employed) shall be treated as a
termination without Cause under this Agreement and the Executive shall be
entitled to severance under the terms of either Sections 10(d) or 10(e) as
applicable upon the termination of Executive’s employment at the end of the
Employment Period.

(g) Release. As a condition of receiving any and all amounts payable and
benefits or additional rights provided pursuant to this Agreement beyond the
Accrued Benefits, the Executive must execute and deliver to the Company and not
revoke a general release of claims in favor of the Company in substantially the
form attached on Exhibit A hereto (the “Release”). The Release must be executed
and delivered (and no longer subject to revocation, if applicable) within sixty
(60) days following the Executive’s Date of Termination. The Company shall
deliver to the Executive the Release for the Executive to execute within five
(5) business days following the Date of Termination.

 

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(h) Certain Payment Delays. Notwithstanding anything to the contrary set forth
herein, to the extent that the payment of any amount described in Sections 10(d)
or (e) constitute “nonqualified deferred compensation” for purposes of Code
Section 409A (as defined in Section 24 hereof), any such payment scheduled to
occur during the first sixty (60) days following the termination of employment
shall not be paid until the first regularly scheduled pay period following the
sixtieth (60th) day following such termination and shall include payment of any
amount that was otherwise scheduled to be paid prior thereto.

(i) No Offset. In the event of termination of his employment, the Executive
shall be under no obligation to seek other employment and there shall be no
offset against amounts due to him on account of any remuneration or benefits
provided by any subsequent employment he may obtain. The Company’s obligation to
make any payment pursuant to, and otherwise to perform its obligations under,
this Agreement shall not be affected by any offset, counterclaim or other right
that the Company or the Company Affiliates may have against the Executive for
any reason.

(j) 280G Payments. In the event the Company determines in good faith that any
payments, entitlements or benefits (whether made or provided pursuant to this
Agreement or otherwise, including by the person or entity affecting a Change in
Control) provided to the Executive constitute “parachute payments” within the
meaning of Section 280G of the Code, and may be subject to an excise tax imposed
pursuant to Section 4999 of the Code, then, if the Executive would be placed in
a better after-tax position, the Executive’s “parachute payments” will be
reduced to an amount determined by the Company in good faith to be the maximum
amount that may be provided to the Executive without resulting in any portion of
such “parachute payment” being subject to such excise tax. The payment reduction
contemplated by the preceding sentence shall be implemented as follows: first,
by reducing any payments to be made to the Executive under Section 10(d)(i)(B)
and (C) or Section 10(e)(i)(B) and (C), as applicable; second, by reducing any
other cash payments to be made to the Executive but only if the value of such
cash payments is not greater than the parachute value of such payments; third,
by cancelling the acceleration of vesting of any restricted stock or restricted
stock unit awards solely with respect accelerated vesting upon a Change in
Control such that such awards will continue to vest on their original schedules;
fourth, by cancelling the acceleration of vesting of any stock options or stock
appreciation rights solely with respect accelerated vesting upon a Change in
Control such that such awards will continue to vest on their original schedules,
fifth, by eliminating the Company’s payment of the cost of any post-termination
continuation of medical and dental benefits for the Executive and his eligible
dependents and sixth, by reducing any equity awards. In the case of the
reductions to be made pursuant to each of the above-mentioned clauses, the
payment and/or benefit amounts to be reduced and the acceleration of vesting to
be cancelled shall be reduced or cancelled in the inverse order of their
originally scheduled dates of payment or vesting, as applicable, and shall be so
reduced (x) only to the extent that the payment and/or benefit otherwise to be
paid or the vesting of the award that otherwise would be accelerated, would be
treated as a “parachute payment” within the meaning of Section 280(G)(b)(2)(A)
of the Code, (y) only to the extent necessary to achieve the required reduction
hereunder and (z) all amounts that are not subject to calculation under Treas.
Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are
subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c). Any
determinations that are made pursuant to this Section 10(j) shall be made by a
nationally recognized certified public accounting firm that

 

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shall be selected by the Company (and paid by the Company) prior to any
transaction that is subject to Code Section 280G and reasonably acceptable to
the Executive (the “Accountant”), which determination shall be certified by the
Accountant and set forth in a certificate delivered to the Executive setting
forth in reasonable detail the basis of the Accountant’s determinations. In
connection with this determination the Accountant shall value the non-compete
and other restrictions on the Executive’s activities.

11. Indemnification. The Executive shall be indemnified and held harmless by the
Company during the Employment Period and following any termination of his
employment for any reason whatsoever in the same manner as would any other key
management employee of the Company with respect to acts or omissions occurring
on or prior to the termination of employment of the Executive. In addition,
during the Employment Period and for a period of three (3) years following the
termination of Executive’s employment for any reason whatsoever, the Executive
shall be covered by a Company-held directors’ and officers’ liability insurance
policy covering acts or omissions occurring on or prior to the termination of
employment of the Executive. The Executive shall also remain entitled to the
protections of the indemnification agreement he has entered into with the
Company dated as of October 14, 2015 (“Indemnification Agreement”).

12. Notices. All notices, demands, requests, or other communications which may
be or are required to be given or made by any party to any other party pursuant
to this Agreement shall be in writing and shall be hand delivered, mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, delivered by overnight air courier addressed as follows:

If to the Company:

LSB Industries, Inc.

16 S Pennsylvania Ave.

Oklahoma City, OK 73107

Attention: Chief Executive Officer

If to the Executive:

His primary address last shown on the Company’s records.

With a copy in the same manner to:

Blank Rome LLP

The Chrysler Building

405 Lexington Avenue

New York, New York 10174

Attention: Robert Mittman, Esq.

Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served or sent.
Each notice, demand, request, or communication that shall be given or made in
the manner described above shall be deemed sufficiently given or made for all
purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, or the affidavit of messenger being deemed
conclusive but not exclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.

 

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13. Severability. The invalidity or unenforceability of any one or more
provisions of this Agreement, including, without limitation, Sections 6 or 7,
shall not affect the validity or enforceability of the other provisions of this
Agreement, which shall remain in full force and effect.

14. Survival. It is the express intention and agreement of the parties hereto
that the provisions of Sections 5, 6, 7, 8, 10, 11, 12, 13, 15, 16, 17, 19, 20,
21, 23, 24 and 25 hereof and this Section 14 shall survive the termination of
employment of the Executive or the termination or expiration of the Employment
Period. In addition, all obligations of the Company to make payments hereunder
shall survive any expiration of the Employment Period on the terms and
conditions set forth herein.

15. Assignment. The rights and obligations of the parties to this Agreement
shall not be assignable or delegable, except that (i) in the event of the
Executive’s death, the personal representative or legatees or distributees of
the Executive’s estate, as the case may be, shall have the right to receive any
amount owing and unpaid to the Executive hereunder and (ii) the rights and
obligations of the Company hereunder shall be assignable and delegable in
connection with any subsequent merger, consolidation, sale of all or
substantially all of the assets or equity interests of the Company or similar
transaction involving the Company or a successor corporation. Unless provided by
applicable law, the Company shall require any successor to the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.

16. Binding Effect. Subject to any provisions hereof restricting assignment,
this Agreement shall be binding upon the parties hereto and shall inure to the
benefit of the parties and their respective heirs, devisees, executors,
administrators, legal representatives, successors and assigns.

17. Amendment; Waiver. This Agreement shall not be amended, altered or modified
except by an instrument in writing duly executed by the party against whom
enforcement is sought. Neither the waiver by either of the parties hereto of a
breach of or a default under any of the provisions of this Agreement, nor the
failure of either of the parties, on one or more occasions, to enforce any of
the provisions of this Agreement or to exercise any right or privilege
hereunder, shall thereafter be construed as a waiver of any subsequent breach or
default of a similar nature, or as a waiver of any such provisions, rights or
privileges hereunder.

18. Headings. Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of
this Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.

19. Governing Law. This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the laws of the State of Oklahoma (but not
including any choice of law rule thereof that would cause the laws of another
jurisdiction to apply).

 

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20. Dispute Resolution/Waiver of Jury Trial. Each of the parties agrees that any
dispute between the parties shall be resolved only in the courts of the State of
Oklahoma or the United States District Court for the Western District of
Oklahoma and the appellate courts having jurisdiction of appeals in such courts.
In that context, and without limiting the generality of the foregoing, each of
the parties hereto irrevocably and unconditionally (a) submits in any proceeding
relating to this Agreement or the Executive’s employment by the Company or any
Company Affiliate, or the termination of such employment, or for the recognition
and enforcement of any judgment in respect thereof (a “Proceeding”), to the
exclusive jurisdiction of the courts of the State of Oklahoma, located in
Oklahoma County, the United States District Court for the Western District of
Oklahoma, and appellate courts having jurisdiction of appeals from any of the
foregoing and agrees that all claims in respect of any such Proceeding shall be
heard and determined in such Oklahoma State court or, to the extent permitted by
law, in such federal court, (b) consents that any such Proceeding may and shall
be brought in such courts and waives any objection that the Executive or the
Company may now or thereafter have to the venue or jurisdiction of any such
Proceeding in any such court or that such Proceeding was brought in an
inconvenient court and agrees not to plead or claim the same, (c) waives all
right to trial by jury in any Proceeding (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement or the Executive’s
employment by the Company or any Company Affiliate, or the termination of such
employment, or the Executive’s or the Company’s performance under, or the
enforcement of, this Agreement, (d) agrees that service of process in any such
Proceeding may be effected by mailing a copy of such process by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
such party at the Executive’s or the Company’s address as provided in Section 12
hereof, and (e) agrees that nothing in this Agreement shall affect the right to
effect service of process in any other manner permitted by the laws of the State
of Oklahoma. In addition, if the Executive substantially prevails on any claim
that is the matter of such dispute, the Company shall promptly reimburse the
Executive for his legal fees.

21. Entire Agreement; Other Agreements. Except as expressly provided herein,
this Agreement constitutes the entire agreement between the parties respecting
the employment of the Executive, there being no representations, warranties or
commitments except as set forth herein, and supersedes and replaces all other
agreements related to the subject matter hereof. This Agreement shall supersede
the Executive’s existing employment agreement dated April 27, 2015 (the “Prior
Agreement”) and the Prior Agreement shall terminate and become null and void on
the Effective Date. Notwithstanding anything herein to the contrary, any
outstanding equity awards, the Indemnification Agreement and the Confidentiality
Agreement (as amended below) shall continue to be in full force and effect; and
the Company shall pay to the Executive all amounts owed to the Executive under
the Prior Agreement up through the Effective Date. Section 15 of the
Confidentiality Agreement, between the Company and the Executive is hereby
deleted in its entirety and replaced with the following:

“15. Termination of Employment. I understand and agree that I or the Company may
terminate my employment pursuant to the terms of the Employment Agreement, dated
January 14, 2016 effective as of December 31, 2015, between me and the Company

 

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(“Employment Agreement”) and that this Confidentiality Agreement shall in no way
be construed or operate to change or modify the Employment Agreement or to
prevent the Company or me from dispensing with my services pursuant to the terms
of the Employment Agreement.”

In the event there is a conflict between any provision of this Agreement and any
other agreement, plan, policy or arrangement of the Company or any Company
Affiliate, the provision most favorable to the Executive shall govern.

22. Counterparts. This Agreement may be executed in two counterparts, each of
which shall be an original and all of which shall be deemed to constitute one
and the same instrument.

23. Withholding. The Company may withhold from any benefit payment under this
Agreement all federal, state, city or other taxes as shall be required pursuant
to any law or governmental regulation or ruling.

24. Section 409A.

(a) The intent of the parties is that payments and benefits under this Agreement
comply with Section 409A of the Code and the regulations and guidance
promulgated thereunder (collectively “Code Section 409A”) or an exemption
therefrom and, accordingly, to the maximum extent permitted, this Agreement
shall be interpreted to be in compliance therewith. If the Executive notifies
the Company (with specificity as to the reason therefor) that the Executive
believes that any provision of this Agreement (or of any award of compensation,
including equity compensation or benefits) would cause the Executive to incur
any additional tax or interest under Code Section 409A and the Company concurs
with such belief or the Company (without any obligation whatsoever to do so)
independently makes such determination, the Company shall, after consulting with
the Executive, reform such provision to attempt to comply with Code Section 409A
through good faith modifications to the minimum extent reasonably appropriate to
conform with Code Section 409A. To the extent that any provision hereof is
modified in order to comply with Code Section 409A such modification shall be
made in good faith and shall, to the maximum extent reasonably possible,
maintain the original intent and economic benefit to the Executive and the
Company of the applicable provision without violating the provisions of Code
Section 409A.

(b) A termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code
Section 409A and, for purposes of any such provision of this Agreement,
references to a “termination,” “termination of employment” or like terms shall
mean “separation from service.” If the Executive is deemed on the date of
termination to be a “specified employee” within the meaning of that term under
Code Section 409A(a)(2)(B), then with regard to any payment or the provision of
any benefit that is considered deferred compensation under Code Section 409A
payable on account of a “separation from service,” such payment or benefit shall
be made or provided at the date which is the earlier of (A) the expiration of
the six (6)-month period measured from the date of such “separation

 

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from service” of the Executive, and (B) the date of the Executive’s death, to
the extent required under Code Section 409A. Upon the expiration of the
foregoing delay period, all payments and benefits delayed pursuant to this
Section 24(b) (whether they would have otherwise been payable in a single sum or
in installments in the absence of such delay) shall be paid or reimbursed to the
Executive in a lump sum, and any remaining payments and benefits due under this
Agreement shall be paid or provided in accordance with the normal payment dates
specified for them herein.

(c) To the extent that reimbursements or other in-kind benefits under this
Agreement constitute “nonqualified deferred compensation” for purposes of Code
Section 409A, (A) all expenses or other reimbursements hereunder shall be made
on or prior to the last day of the taxable year following the taxable year in
which such expenses were incurred by the Executive, (B) any right to
reimbursement or in-kind benefits shall not be subject to liquidation or
exchange for another benefit, and (C) no such reimbursement, expenses eligible
for reimbursement, or in-kind benefits provided in any taxable year shall in any
way affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year.

(d) For purposes of Code Section 409A, the Executive’s right to receive any
installment payments pursuant to this Agreement shall be treated as a right to
receive a series of separate and distinct payments. Whenever a payment under
this Agreement specifies a payment period with reference to a number of days,
(i) the actual date of payment within the specified period shall be within the
sole discretion of the Company and, (ii) if such payment qualifies as
non-qualified deferred compensation under Section 409A and it can be paid in one
of two calendar years, it shall be paid in the second calendar year.

(e) Notwithstanding any other provision of this Agreement to the contrary, in no
event shall any payment under this Agreement that constitutes “nonqualified
deferred compensation” for purposes of Code Section 409A be subject to offset by
any other amount unless otherwise permitted by Code Section 409A.

25. Definitions.

(a) “Accrued Benefits” means (i) any unpaid Base Salary through the Date of
Termination; (ii) any earned but unpaid Annual Bonus for a performance year that
has ended on or prior to the Date of Termination; (iii) any accrued and unpaid
vacation and/or sick days; (iv) any amounts or benefits owing to the Executive
or to the Executive’s beneficiaries under the then applicable benefit plans of
the Company (excluding any severance plan, program, agreement or arrangement);
(v) any rights or entitlements under any other agreements between the Executive
and the Company, including, without limitation, the Indemnification Agreements
and any outstanding equity award agreements; and (vi) any amounts owing to the
Executive for reimbursement of expenses properly incurred by the Executive prior
to the Date of Termination and which are reimbursable in accordance with
Section 5 (including any gross-up payment required thereunder). Amounts payable
under (A) clauses (i), (ii) and (iii) shall be paid promptly after the Date of
Termination, (B) clause (iv) shall be paid in accordance with the terms and
conditions of the applicable plan, program or arrangement; (C) clause (v) shall
be treated in accordance with the applicable agreement; and (D) clause
(vi) shall be paid in accordance with the terms of the applicable expense policy
or Section 5, as applicable.

 

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(b) “Cause” means (i) the Executive’s conviction of, or plea of nolo contendere
to, a felony (other than for a traffic violation); (ii) the Executive’s
continued failure to substantially perform the Executive’s material duties
hereunder (other than due to a mental or physical impairment) after receipt of
written notice from the Company that specifically identifies the manner in which
the Executive has substantially failed to perform the Executive’s material
duties and specifies the manner in which the Executive may substantially perform
his material duties in the future; (iii) an act of fraud or gross or willful
material misconduct by the Executive; or (iv) the Executive’s material breach of
Sections 7(a) and 7(b). Anything herein to the contrary notwithstanding, the
Executive shall not be terminated for “Cause” hereunder unless (A) written
notice stating the basis for the termination is provided to the Executive,
(B) as to clauses (ii) or (iv) of this paragraph, he fails to cure such neglect
or conduct within thirty (30) days following receipt of such notice, (C) he has
an opportunity (represented by counsel) to address a meeting of the Board, and
(D) after such meeting (or if the Executive declines to meet), there is a 75%
vote of the Board (not counting the Executive) to terminate his employment for
Cause.

(c) “Change in Control” means:

(i) A “change in the ownership of the Company” which shall occur on the date
that any one person, or more than one person acting as a group, acquires
ownership of stock in the Company that, together with stock held by such person
or group, constitutes more than 50% of the total fair market value or total
voting power of the stock of the Company as of the Effective Date; however, if
any one person or more than one person acting as a group is considered to own
more than 50% of the total fair market value or total voting power of the stock
of the Company, the acquisition of additional stock by the same person or
persons will not be considered a “change in the ownership of the Company” (or to
cause a “change in the effective control of the Company” within the meaning of
paragraph (ii) below) and an increase of the effective percentage of stock owned
by any one person, or persons acting as a group, as a result of a transaction in
which the Company acquires its stock in exchange for property will be treated as
an acquisition of stock for purposes of this paragraph; provided, further,
however, that for purposes of this paragraph (i), any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any entity controlled by the Company shall not constitute a Change in
Control. This paragraph (i) applies only when there is a transfer of the stock
of the Company (or issuance of stock) and stock in the Company remains
outstanding after the transaction;

(ii) A “change in the effective control of the Company” which shall occur on the
date that either (A) any one person, or more than one person acting as a group,
acquires (or has acquired during the twelve month period ending on the date of
the most recent acquisition by such person or persons) ownership of stock of the
Company possessing 30% or more of the total voting power of the stock of the
Company, except for any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any entity controlled by the
Company; or (B) a majority of the members of the Board are replaced during any
twelve-month period by directors whose appointment or election is not endorsed
by a majority of the members of the Board prior to the date of the appointment
or election. For purposes of a “change in the effective control of the Company,”
if any one person, or more than one person acting as a group, is considered to
effectively control the Company within the meaning of this paragraph (ii) after
the Effective Date, the acquisition of additional control of the

 

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Company by the same person or persons is not considered a “change in the
effective control of the Company,” or to cause a “change in the ownership of the
Company” within the meaning of paragraph (i) above; or

(iii) A “change in the ownership of a substantial portion of the Company’s
assets” which shall occur on the date that any one person, or more than one
person acting as a group, acquires (or has acquired during the twelve month
period ending on the date of the most recent acquisition by such person or
persons) assets of the Company that have a total gross fair market value equal
to or more than 40% of the total gross fair market value of all the assets of
the Company immediately prior to such acquisition or acquisitions. For this
purpose, gross fair market value means the value of the assets of the Company,
or the value of the assets being disposed of, determined without regard to any
liabilities associated with such assets. Any transfer of assets to an entity
that is controlled by the stockholders of the Company immediately after the
transfer, as provided in guidance issued pursuant to Code Section 409A, shall
not constitute a Change in Control.

For purposes of the definition of Change in Control, the provisions of
Section 318(a) of the Code regarding the constructive ownership of stock will
apply to determine stock ownership; provided, that, stock underlying unvested
options (including options exercisable for stock that is not substantially
vested) will not be treated as owned by the individual who holds the option.

(d) “Company Affiliate” means any entity controlled by, in control of, or under
common control with, the Company.

(e) “Competitive Enterprise” means (i) a business enterprise that engages in
nitrogen and climate control in competition with the Company or its subsidiaries
(the “Company’s Business”) (a) in the United States of America, or (b) in any
other country where the Company or its subsidiaries operates facilities or sells
such products. Notwithstanding the foregoing, in the event a business enterprise
(including, without limitation, any entity, or private equity or hedge fund) has
one or more lines of business that do not involve the Company’s Business, the
Executive shall be permitted to associate with such business enterprise if, and
only if, the Executive does not participate in, or have supervisory authority
with respect to, any line of business involving the Company’s Business.

(f) “Confidential Information” means all non-public information concerning trade
secrets, know-how, software, developments, inventions, processes, technology,
designs, financial data, strategic business plans or any proprietary or
confidential information, documents or materials in any form or media, including
any of the foregoing relating to research, operations, finances, current and
proposed products and services, vendors, customers, advertising and marketing,
and other non-public, proprietary, and confidential information of the Company
or the Company Affiliates. Notwithstanding anything to the contrary contained
herein, the general skills, knowledge and experience gained during the
Executive’s employment with the Company, information publicly available or
generally known within the industry or trade in which the Company competes and
information or knowledge possessed by the Executive prior to his employment by
the Company, shall not be considered Confidential Information.

 

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(g) “Date of Termination” means (i) if the Executive’s employment is terminated
by the Executive’s death, the date of the Executive’s death; (ii) if the
Executive’s employment is terminated because of the Executive’s Disability
pursuant to Section 9(a)(ii)(A), thirty (30) days after Notice of Termination,
provided that the Executive shall not have returned to the performance of the
Executive’s duties on a full-time basis during such thirty (30)-day period;
(iii) if the Executive’s employment is terminated during the Employment Period
by the Company pursuant to Section 9(a)(ii)(B) or by the Executive pursuant to
Section 9(a)(iii), the date specified in the Notice of Termination consistent
with this Agreement; or (v) if the Executive’s employment is terminated upon the
expiration of the Employment Period pursuant to Section 1 , the last day of the
Employment Period.

(h) “Disability” means the inability of the Executive to perform the Executive’s
material duties hereunder due to a physical or mental injury, infirmity or
incapacity, which is expected to exceed one hundred eighty (180) days (including
weekends and holidays) in any three hundred sixty-five (365)-day period, as
determined by the Executive’s treating physician in his or her reasonable
discretion.

(i) “Good Reason” means (i) any material diminution in the Executive’s job
duties, authorities or responsibilities; (ii) a reduction in the Executive’s
Base Salary or Target Bonus as a percentage of Base Salary or the failure to
grant any Annual Equity Award as required in Section 4(c); (iii) the failure of
the Executive to report solely and directly to the Chief Executive Officer;
(iv) the assignment of duties substantially inconsistent with the Executive’s
status as Executive Vice President of Finance and Chief Financial Officer; (v) a
relocation of the Executive’s primary place of employment to a location more
than fifty (50) miles from the current location of the Company’s offices in
Oklahoma City, Oklahoma; (vi) any other material breach of this Agreement by the
Company; or (vii) the failure of the Company to obtain the assumption in writing
of its obligations under the Agreement by any successor to all or substantially
all of the assets of the Company after a merger, consolidation, sale or similar
transaction in which such Agreement is not assumed by operation of law. In order
to invoke a termination for Good Reason, (A) the Executive must provide written
notice within ninety (90) days of the later of the occurrence, or the
Executive’s knowledge, of any event of “Good Reason,” (B) the Company must fail
to cure such event within thirty (30) days of the giving of such notice and
(C) the Executive must provide a Notice of Termination within thirty (30) days
following the expiration of the Company’s cure period.

(j) “Non-Compete Period” means the period commencing on the Effective Date and
ending twenty four (24) months after the Executive’s Date of Termination.

 

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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement, or have caused this Agreement to be duly executed and delivered on
their behalf.

 

LSB INDUSTRIES, INC.

/s/ Daniel D. Greenwell

By:   LSB Industries, Inc. Name:   Daniel D. Greenwell Title:   President and
Chief Executive Officer EXECUTIVE

/s/ Mark Behrman

 

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Exhibit A

(General Release)

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EXHIBIT A

GENERAL RELEASE

I, Mark Behrman, in consideration of and subject to the performance by LSB
Industries, Inc. (together with its affiliated companies and subsidiaries and
its successors and assigns, the “Company”), of its obligations under Section 10
of the Employment Agreement, dated as of January 14, 2016 effective as of
December 31, 2015 (the “Agreement”), do hereby release and forever discharge as
of the date hereof the Company and its respective affiliates and subsidiaries
and all present, former and future directors, officers, agents, representatives,
employees, successors and assigns of the Company and/or its respective
affiliates and subsidiaries and direct or indirect owners (collectively, the
“Released Parties”) to the extent provided herein (this “General Release”).
Terms used herein but not otherwise defined shall have the meanings given to
them in the Agreement.

1. I understand that, other than the Accrued Benefits, the payments or benefits
paid or granted to me under Section 10 of the Agreement represent, in part,
consideration for signing this General Release and are not salary, wages or
benefits to which I was already entitled. I understand and agree that I will not
receive the payments and benefits specified in Section 10 of the Agreement,
other than the Accrued Benefits, unless I execute this General Release and do
not revoke this General Release within the time period permitted hereafter. Such
payments and benefits will not be considered compensation for purposes of any
employee benefit plan, program, policy or arrangement maintained or hereafter
established by the Company or its affiliates.

2. Except as provided in paragraph 4 below and except for the provisions of the
Agreement which expressly survive the termination of my employment with the
Company, I knowingly and voluntarily (for myself, my heirs, executors,
administrators and assigns) release and forever discharge the Company and the
other Released Parties from any and all claims, suits, controversies, actions,
causes of action, cross-claims, counter-claims, demands, debts, compensatory
damages, liquidated damages, punitive or exemplary damages, other damages,
claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in
law and in equity, both past and present (through the date that this General
Release becomes effective and enforceable) and whether known or unknown,
suspected, or claimed against the Company and/or any of the Released Parties
which I, my spouse, or any of my heirs, executors, administrators or assigns,
ever had, now have, or hereafter may have, by reason of any matter, cause, or
thing whatsoever, from the beginning of my initial dealings with the Company to
the date of this General Release, and particularly, but without limitation of
the foregoing general terms, any claims arising from or relating in any way to
my employment relationship with Company, the terms and conditions of that
employment relationship, and the termination of that employment relationship
(including, but not limited to, any allegation, claim or violation, arising
under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights
Act of 1991; the Age Discrimination in Employment Act of 1967, as amended
(including the Older Workers Benefit Protection Act), the Equal Pay Act of 1963,
as amended; the Americans with Disabilities Act of 1990; the Family and Medical
Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the
Employee Retirement Income Security Act of 1974; any applicable Executive Order
Programs; the Fair Labor Standards Act; or their state or local counterparts; or
under any other federal, state or local civil or human rights law, or under any
other local, state, or federal law, regulation or ordinance; or under any public
policy, contract or tort, or under common law; or arising under any policies,
practices or procedures of the Company; or any claim for wrongful discharge,
breach of contract (subject to the terms hereof), infliction of emotional
distress, defamation (subject to the terms hereof), or any claim for costs,
fees, or other expenses, including attorneys’ fees incurred in these matters)
(all of the foregoing collectively referred to herein as the “Claims”). I
understand and intend that this General Release constitutes a general release of
all claims and that no reference herein to a specific form of claim, statute or
type of relief is intended to limit the scope of this General Release.

3. I represent that I have made no assignment or transfer of any right, claim,
demand, cause of action, or other matter covered by paragraph 2 above.

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4. I agree that this General Release does not waive or release any rights or
claims that I may have under the Age Discrimination in Employment Act of 1967
which arise after the date I execute this General Release. I acknowledge and
agree that my separation from employment with the Company in compliance with the
terms of the Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination in
Employment Act of 1967). Notwithstanding anything herein to the contrary, I am
not waiving any of the following (and definition of “Claims” shall not include
these claims or rights): (i) any claim or right to enforce the Agreement or this
General Release or any other written agreement between the Company and me that
pertains to an employee benefit plan, program, policy or arrangement, or
ownership of the Company’s stock or debt securities in effect as of the Date of
Termination ; (ii) any claims which arise after the date of this General
Release; (iii) my rights as a securityholder of the Company; and (iv) my rights
to be indemnified and/or defended and/or advanced expenses, including pursuant
to the Company’s corporate governance documents or the Indemnification Agreement
(as defined in the Agreement) (and Section 11 of the Agreement) or, if greater,
applicable law and my rights to be covered under any applicable directors’ and
officers’ insurance liability policies.

5. I agree that I hereby waive all rights to sue or obtain equitable, remedial
or punitive relief from any or all Released Parties of any kind whatsoever with
respect to claims released by me herein, including, without limitation,
reinstatement, back pay, front pay, and any form of injunctive relief.
Notwithstanding the foregoing, I acknowledge that I am not waiving and am not
being required to waive any right that cannot be waived under law, including the
right to file an administrative charge or participate in an administrative
investigation or proceeding; provided, however, that I disclaim and waive any
right to share or participate in any monetary award resulting from the
prosecution of such charge or investigation or proceeding.

6. In signing this General Release, I acknowledge and intend that it shall be
effective as a bar to each and every one of the Claims hereinabove mentioned or
implied. I expressly consent that this General Release shall be given full force
and effect according to each and all of its express terms and provisions,
including those relating to unknown and unsuspected Claims (notwithstanding any
state or local statute that expressly limits the effectiveness of a general
release of unknown, unsuspected and unanticipated Claims), if any, as well as
those relating to any other Claims hereinabove mentioned or implied. I
acknowledge and agree that this waiver is an essential and material term of this
General Release and that without such waiver the Company would not have agreed
to the terms of the Agreement. I further agree that in the event that I should
bring a Claim seeking damages against the Company, or in the event that I should
seek to recover against the Company in any Claim brought by a governmental
agency on my behalf, this General Release shall serve as a complete defense to
such Claims to the maximum extent permitted by law. I further agree that I am
not aware of any pending Claim, or of any facts that could give rise to a Claim,
of the type described in paragraph 2 as of the execution of this General
Release.

7. I agree that neither this General Release, nor the furnishing of the
consideration for this General Release, shall be deemed or construed at any time
to be an admission by the Company, any Released Party or myself of any improper
or unlawful conduct.

8. I agree that I will forfeit all amounts payable by the Company pursuant to
the Agreement if I challenge the validity of this General Release. I also agree
that if I violate this General Release by suing the Company or the other
Released Parties with respect to Claims released by me herein, I will pay all
costs and expenses of defending against the suit incurred by the Released
Parties, including reasonable attorneys’ fees, and return all payments received
by me pursuant to the Agreement on or after the termination of my employment. I
further agree that if I materially violate any of my post-employment obligations
under Sections 6 or 7 of the Agreement, I will also forfeit any cash severance
amounts payable by the Company pursuant to either Section 10(d) or Section 10(e)
of the Agreement, as applicable, other than the Accrued Benefits, and will
return any such sums already paid, on an after-tax basis, to the Company;
provided that no such payments shall be subject to forfeiture and/or repayment
unless the Company has provided me with written notice of the events giving rise
to such forfeiture and/or repayment and I have not ceased to engage in such
activities within fifteen (15) days of my receipt of such written notice.

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9. I agree that this General Release is confidential and agree not to disclose
any information regarding the terms of this General Release, except to my
immediate family and any tax, legal or other counsel that I have consulted
regarding the meaning or effect hereof (and I will instruct each of the
foregoing not to disclose the same to anyone) or as required by law or to the
extent reasonably necessary in connection with any dispute between me and the
Company regarding this General Release, the Agreement or any other written
agreement between the Company and me that pertains to an employee benefit plan,
program, policy or arrangement, or ownership of the Company’s stock or debt
securities in effect as of the Date of Termination.

10. Any non-disclosure provision in this General Release does not prohibit or
restrict me (or my attorney) from responding to any inquiry about this General
Release or its underlying facts and circumstances by the Securities and Exchange
Commission (SEC), the Financial Industry Regulatory Authority (FINRA), or any
other self-regulatory organization or governmental entity.

11. I hereby acknowledge that Sections 5, 6, 7, 8, 10, 11, 12, 13, 14, 15, 16,
17, 19, 20, 21, 23, 24 and 25 of the Agreement shall survive my execution of
this General Release.

12. I represent that I am not aware of any Claim by me, and I acknowledge that I
may-hereafter discover Claims or facts in addition to or different than those
which I now know or believe to exist with respect to the subject matter of the
release set forth in paragraph 2 above and which, if known or suspected at the
time of entering into this General Release, may have materially affected this
General Release and my decision to enter into it.

13. Notwithstanding anything in this General Release to the contrary, this
General Release shall not relinquish, diminish, or in any way affect any rights
or claims arising out of any breach by the Company or by any Released Party of
the Agreement, this General Release, or any other written agreement between the
Company and me that pertains to an employee benefit plan, program, policy or
arrangement, or ownership of the Company’s stock or debt securities in effect as
of the Date of Termination, after the date hereof.

14. Whenever possible, each provision of this General Release shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this General Release is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this General Release shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein. This General
Release constitutes the complete and entire agreement and understanding among
the parties, and supersedes any and all prior or contemporaneous agreements,
commitments, understandings or arrangements, whether written or oral, between or
among any of the parties, in each case concerning the subject matter hereof.

15. Subject to applicable law, I covenant and agree that I shall not in any way
publicly disparage, call into disrepute, or otherwise defame or slander the
Company or any of its subsidiaries, in any manner that would materially damage
the business or reputation of the Company or its subsidiaries. The Company
covenants and agrees, on behalf of itself and its subsidiaries, that neither the
Company, any of its subsidiaries nor any of the officers or directors of the
Company or any of its subsidiaries shall in any way publicly disparage, call
into disrepute, or otherwise defame or slander me. Nothing in this Section 15
shall preclude or restrict me or the Company or any of the subsidiaries of the
Company from making truthful statements, including, without limitation, those
that are required by applicable law, regulation or in connection with a legal
process or proceeding, and the making of such statements shall not be a
violation of this section.

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

 

  (i) I HAVE READ IT CAREFULLY;

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  (ii) I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT
RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964,
AS AMENDED, THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF
1990. AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

 

  (iii) I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

  (iv) I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I
HAVE DONE SO OR AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO
SO OF MY OWN VOLITION,

 

  (v) I HAVE HAD AT LEAST [21][45] DAYS FROM THE DATE OF MY RECEIPT OF THIS
RELEASE TO CONSIDER IT AND THE CHANGES MADE SINCE MY RECEIPT OF THIS RELEASE ARE
NOT MATERIAL OR WERE MADE AT MY REQUEST AND WILL NOT RESTART THE REQUIRED
[2I][45]-DAY PERIOD;

 

  (vi) I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS
RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR
ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED; AND

 

  (vii) I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH
THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT.

 

SIGNED:         DATE:    

 

AGREED AS TO SECTION 15 HEREOF: LSB INDUSTRIES, INC.

Name:     Title: