Exhibit 10.4

LSB INDUSTRIES, INC.

(2016 Long Term Incentive Plan)

RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is effective as of
                , 20     (the “Grant Date”), by and between LSB INDUSTRIES,
INC., a Delaware corporation (the “Company”), and              (the
“Participant”). For valuable consideration, the Company and the Participant
agree as follows.

1.    Background. The Participant is an employee, officer or director of the
Company or an Affiliate pursuant to that certain Employment Agreement, by and
between the Company and the Participant, dated as of                     
(the “Employment Agreement”), whom the Committee has selected to receive an
award under the Company’s 2016 Long Term Incentive Plan (as may be amended from
time to time, the “Plan”). The purpose of the award is to retain and motivate
the Participant by providing the Participant the opportunity to acquire a
proprietary interest in the Company and to link the Participant’s interests and
efforts to the long-term interests of the Company’s shareholders.

2.    Restricted Stock Grant. Subject to the terms of the Plan and of this
Agreement, the Company hereby grants to the Participant              shares of
the Company’s Stock, subject to certain restrictions thereon (the “Restricted
Stock”).

3.    Restrictions; Forfeiture. The Restricted Stock is restricted in that it
may not be sold, transferred or otherwise alienated or hypothecated until the
restrictions enumerated in this Agreement and the Plan are removed or expire as
contemplated in Section 4 of this Agreement. The Restricted Stock is also
restricted in the sense that it may be forfeited to the Company (the “Forfeiture
Restrictions”). Except as otherwise provided in Section 4, if the Participant’s
service relationship with the Company or any of its subsidiaries is terminated
for any reason, then those shares of Restricted Stock for which the restrictions
have not lapsed as of the Participant’s Date of Termination (as defined in the
Employment Agreement) shall become null and void and those shares of Restricted
Stock shall be forfeited to the Company. The Restricted Stock for which the
restrictions have lapsed as of the Participant’s Date of Termination shall not
be forfeited to the Company. The Participant hereby agrees that if the
Restricted Stock is forfeited, the Company shall have the right to deliver the
Restricted Stock to the Company’s transfer agent for, at the Company’s election,
cancellation or transfer to the Company.

4.    Vesting.

4.1    The restrictions on the Restricted Stock granted pursuant to this
Agreement will expire, and the Restricted Stock will become transferable, and
nonforfeitable as to one-third of the Restricted Stock on each of the first
three anniversaries of the Grant Date, such that 100% of the shares of
Restricted Stock shall be vested on the third anniversary of the Grant Date;
provided, however, that, except as otherwise provided in Section 4.2 of this
Agreement, the Restricted Stock will vest on such dates only if the Participant
remains in the employ of or a service provider to the Company or its
subsidiaries continuously from the Grant Date through the applicable vesting
date.

4.2    Notwithstanding Section 4.1 of this Agreement, provided that (i) the
Participant remains in the employ of or as a service provider to the Company or
its subsidiaries continuously from the Grant Date until immediately prior to the
occurrence of any of the events listed below and (ii) the Participant holds
Restricted Stock granted pursuant to this Agreement at such time, then:

 

  4.2.1

in connection with a Change of Control, the Restricted Stock granted hereunder
may be assumed or substituted pursuant to Section 8(f)(v)(x) of the Plan for a
Replacement Award (as defined below), in which case the Restricted Stock will
continue to vest in

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  accordance with Section 4.1 of this Agreement, subject to the terms of this
Section 4.2; provided that if a Replacement Award is issued hereby and following
such Change of Control, the equity securities underlying the Replacement Award
cease to be publicly traded on an established securities market, all such
Replacement Awards shall vest in full immediately prior to such equity
securities ceasing to be publicly traded on an established securities market;

 

  4.2.2

if the Restricted Stock granted hereunder is not assumed or substituted in
connection with a Change of Control for a Replacement Award, all shares of
Restricted Stock shall automatically vest in full upon a Change of Control;

 

  4.2.3

all shares of Restricted Stock shall automatically vest in full if the
Participant’s employment or service is terminated by the Company without Cause,
by the Participant for Good Reason or upon a Company Notice of Non-Renewal (each
as defined in the Employment Agreement) and such Date of Termination occurs
either (x) within 90 days prior to the date a definitive agreement is executed
which results in a Change of Control within 180 days after the date such
definitive agreement is executed or (y) on or within 180 days after the date a
definitive agreement is executed which results in a Change of Control within 180
days after the date such definitive agreement is executed;

 

  4.2.4

all shares of Restricted Stock (other than the Replacement Awards) that are
scheduled to vest pursuant to the vesting schedule set forth in Section 4.1 of
this Agreement during the 18-month period following the Participant’s Date of
Termination shall automatically vest in full upon a termination of the
Participant’s employment by the Company without Cause, by the Participant for
Good Reason or upon a Company Notice of Non-Renewal, in each case, that occurs
prior to a Change of Control, and all remaining shares of Restricted Stock shall
remain outstanding and eligible to vest pursuant to Section 4.2.3 of this
Agreement, but shall be immediately forfeited when, under the terms of
Section 4.2.3 of this Agreement, vesting can no longer occur;

 

  4.2.5

a pro-rata portion of the Restricted Stock or the Replacement Awards, as
applicable, shall automatically vest upon the Participant’s Date of Termination
by reason of death or Disability (as defined in the Employment Agreement) with
such pro-rata portion calculated by multiplying the number of shares of
Restricted Stock or Replacement Awards scheduled to vest on the anniversary of
the Grant Date immediately succeeding such Dare 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 (or if such Date of Termination occurs prior to
the first anniversary of the Grant Date, then the number of days that have
elapsed from the Grant Date) through the Participant’s Date of Termination and
the denominator of which shall be 365; and/or

 

  4.2.6

all shares of Replacement Awards shall automatically vest in full upon a
termination of the Participant’s employment or service by the Company without
Cause, by the Participant for Good Reason or upon a Company Notice of
Non-Renewal.

The occurrence of any of the events listed in this Section 4.2 shall be
determined by the Committee in its sole and absolute discretion.

For purposes of this Agreement, “Replacement Award” means a substantially
equivalent award of restricted stock of common stock that is publicly traded on
an established securities market with substantially equivalent terms and
conditions as the Restricted Stock, including vesting terms and dividend rights,
as determined by the Committee, issued by the surviving or successor company or
a parent or subsidiary of such company.

 

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5.    Escrow of Restricted Stock. The Company shall evidence the Restricted
Stock in the manner that it deems appropriate, including, without limitation,
certificating the Restricted Stock or evidencing the Restricted Stock in book
entry form, electronic or otherwise. The Company may issue in the Participant’s
name a certificate or certificates representing the Restricted Stock and retain
that certificate or those certificates until the restrictions on such Restricted
Stock expire, as contemplated in Section 4 of this Agreement, or the Restricted
Stock is forfeited, as described in Section 3 of this Agreement. If the Company
certificates the Restricted Stock, the Participant shall execute one or more
stock powers in blank for those certificates and deliver those stock powers to
the Company. The Company shall hold the Restricted Stock and the related stock
powers pursuant to the terms of this Agreement, if applicable, until such time
as (a) a certificate or certificates for the Restricted Stock are delivered to
the Participant, (b) the Restricted Stock is otherwise transferred to the
Participant free of restrictions, or (c) the Restricted Stock is canceled and
forfeited pursuant to this Agreement.

6.    Ownership of Restricted Stock. From and after the Grant Date, the
Participant will be entitled to all the rights of absolute ownership of the
Restricted Stock granted under this Agreement, including the right to vote those
shares; provided, however, that any dividends paid by the Company with respect
to the Restricted Stock prior to the expiration of the Forfeiture Restrictions
shall be held in escrow by the Company and paid to the Participant, if at all,
at the time the Forfeiture Restrictions expire on the Restricted Stock for which
the dividend accrued; provided, further, that in no event shall dividends be
settled later than 45 days following the date on which the Forfeiture
Restrictions expire with respect to the Restricted Stock for which the dividends
were accrued. For purposes of clarity, if the Restricted Stock is forfeited by
the Participant pursuant to the terms of this Agreement then the Participant
shall also forfeit the dividends, if any, accrued with respect to such forfeited
Restricted Stock. No interest will accrue on the dividends between the
declaration and settlement of the dividends.

7.    Delivery of Stock. Promptly following the expiration of the restrictions
on the Restricted Stock as contemplated in Section 4 of this Agreement, the
Company shall cause to be issued and delivered to the Participant or the
Participant’s designee a certificate or other evidence of the number of whole
shares of Restricted Stock as to which restrictions have lapsed, free of any
restrictive legend relating to the lapsed restrictions, upon receipt by the
Company of any tax withholding as may be requested pursuant to Section 8 of this
Agreement. The value of such Restricted Stock shall not bear any interest, and
the Company shall not have any liability to the Participant other than to
deliver the Restricted Stock and associated dividends, if any, because of the
passage of time or any delay in delivery.

8.    Payment of Taxes. The Company may require the Participant to pay to the
Company (or the Company’s subsidiary if the Participant is an employee of a
subsidiary of the Company), an amount the Company deems necessary to satisfy its
(or its subsidiary’s) current or future obligation to withhold federal, state
and local income or other taxes that the Participant incurs as a result of the
vesting of the Restricted Stock. With respect to any required tax withholding,
the Participant may (a) direct the Company to withhold from the shares of Stock
to be issued to the Participant under this Agreement the number of shares
necessary to satisfy the Company’s obligation to withhold taxes, which
determination will be based on the shares’ Fair Market Value at the time such
determination is made; (b) deliver to the Company shares of Stock sufficient to
satisfy the Company’s tax withholding obligations, based on the shares’ Fair
Market Value at the time such determination is made; (c) deliver cash to the
Company sufficient to satisfy its tax withholding obligations; or (d) satisfy
such tax withholding through any combination of (a), (b) and (c). If the
Participant desires to elect to use the stock withholding option described in
subparagraph (a), the Participant must make the election at the time and in the
manner the Company prescribes. If such tax obligations are satisfied under
subparagraph (a) or (b), the maximum number of shares of Stock that may be so
withheld or surrendered shall be the number of shares of Stock that have an
aggregate Fair Market Value on the date of withholding or repurchase equal to
the aggregate amount of such tax liabilities determined based on the greatest
withholding rates for federal, state and local tax purposes, including payroll
taxes, that may be utilized without creating adverse accounting treatment with
respect to such Award. The Company, in its discretion, may deny the
Participant’s request to satisfy its tax withholding obligations using a method
described under subparagraph (a), (b), or (d). In the event the Company
determines that the aggregate Fair Market Value of the shares of Stock withheld
as payment of any tax withholding obligation is insufficient to discharge that
tax withholding obligation, then the Participant must pay to the Company, in
cash, the amount of that deficiency immediately upon the Company’s request.

 

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9.    Leave of Absence. With respect to the Restricted Stock, the Company may,
in its sole discretion, determine that if the Participant is on leave of absence
for any reason, the Participant will be considered to still be in the employ of,
or providing services to, the Company, provided that rights to the Restricted
Stock during a leave of absence will be limited to the extent to which those
rights were earned or vested when the leave of absence began.

10.    Compliance with Securities Law. Notwithstanding any provision of this
Agreement to the contrary, the issuance of Stock (including Restricted Stock)
will be subject to compliance with all applicable requirements of federal,
state, or foreign law with respect to such securities and with the requirements
of any stock exchange or market system upon which the Stock may then be listed.
No Stock will be issued hereunder if such issuance would constitute a violation
of any applicable federal, state, or foreign securities laws or other law or
regulations or the requirements of any stock exchange or market system upon
which the Stock may then be listed. In addition, Stock will not be issued
hereunder unless (i) a registration statement under the Securities Act, is at
the time of issuance in effect with respect to the shares issued or (ii) in the
opinion of legal counsel to the Company, the shares issued may be issued in
accordance with the terms of an applicable exemption from the registration
requirements of the Securities Act. THE PARTICIPANT IS CAUTIONED THAT ISSUANCE
OF UNRESTRICTED STOCK UPON THE VESTING OF RESTRICTED STOCK GRANTED PURSUANT TO
THIS AGREEMENT MAY NOT OCCUR UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. The
inability of the Company to obtain from any regulatory body having jurisdiction
or the authority, if any, deemed by the Company’s legal counsel to be necessary
to the lawful issuance and sale of the Restricted Stock, or unrestricted Stock
(upon vesting), will relieve the Company of any liability in respect of the
failure to issue such shares as to which such requisite authority has not been
obtained. As a condition to any issuance hereunder, the Company may require the
Participant to satisfy any qualifications that may be necessary or appropriate
to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect to such compliance as may be requested
by the Company. From time to time, the Committee and appropriate officers of the
Company are authorized to take the Securities Actions necessary and appropriate
to file required documents with governmental authorities, stock exchanges, and
other appropriate Persons to make shares of Stock available for issuance.

11.    Certain Defined Terms. Capitalized terms used but not defined herein
shall have the meanings set forth in the Plan.

12.    Anti-dilution. In the event of a stock dividend, stock split, spin-off,
combination or exchange of shares, recapitalization, merger, consolidation,
distribution to shareholders (other than a normal cash dividend) or other change
in the Company’s corporate or capital structure, then the Committee shall make
proportional adjustments to the Restricted Stock and/or the Plan as described in
Section 8 of the Plan.

13.    The Plan. The Participant acknowledges receipt of a copy of the Plan,
which is attached hereto as Exhibit A, and represents that the Participant is
familiar with the terms and provisions of the Plan and hereby accepts the
Restricted Stock subject to all such terms and provisions.

14.    Employment or Service. Nothing in the Plan or in this Agreement shall
confer upon the Participant any right to continued employment or service with
the Company or its Affiliates or interfere in any way with the right of the
Company and its Affiliates to terminate the Participant’s employment or service
at any time.

15.    Binding Agreement. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, trustees, successors and assigns.

16.    No Liability for Good Faith Determinations. The Company and the members
of the Committee and the Board shall not be liable for any act, omission or
determination taken or made in good faith with respect to this Agreement or the
Restricted Stock granted hereunder.

17.    Execution of Receipts and Releases. Any payment of cash or any issuance
or transfer of Stock or property to the Participant or the Participant’s legal
representative, heir, legatee, or distributee, in accordance with the provisions
hereof, shall, to the extent thereof, be in full satisfaction of all claims of
such Persons hereunder. The Company may require the Participant or the
Participant’s legal representative, heir, legatee or distributee, as a condition
precedent to such payment or issuance, to execute a release and receipt therefor
in such form as it shall reasonably determine.

 

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18.    Governing Law and Consent to Jurisdiction and Venue. All questions
arising with respect to the provisions of this Agreement shall be determined by
application of the laws of Oklahoma, without giving any effect to any conflict
of law provisions thereof, except to the extent Oklahoma state law is preempted
by federal law. Further, the Participant hereby consents and agrees that state
courts located in Oklahoma City, Oklahoma and the United States District Court
for the Western District of Oklahoma each shall have personal jurisdiction and
proper venue with respect to any dispute between the Participant and the Company
arising in connection with the Restricted Shares or this Agreement. In any
dispute with the Company, the Participant will not raise, and the Participant
hereby expressly waives, any objection or defense to such jurisdiction as an
inconvenient forum.

19.    Clawback. This Agreement and the Restricted Stock granted hereunder is
subject to any written clawback policies of the Company, whether in effect on
the Grant Date or adopted, with the approval of the Board, following the Grant
Date and either (i) applicable to all senior executives of the Company and their
restricted stock awards or (ii) adopted to conform to the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010 and rules promulgated thereunder by
the Securities and Exchange Commission or any other applicable laws (whether or
not the rights of the Participant may be adversely affected). Any such policy
may subject the Restricted Stock and amounts paid or realized with respect to
the Restricted Stock to reduction, cancelation, forfeiture or recoupment if
certain specified events or wrongful conduct occur, including but not limited to
an accounting restatement due to the Company’s material noncompliance with
financial reporting regulations or other events or wrongful conduct specified in
any such clawback policy that the Company determines should apply to the
Restricted Stock.

20.    Electronic Delivery. The Participant consents to receive documents from
the Company and any plan administrator by means of electronic delivery, provided
that such delivery complies with applicable law. This consent shall be effective
for the entire time that the Participant holds awards granted under the Plan.

21.    Entire Agreement. This Agreement constitutes the entire agreement between
the Company and the Participant relating to the Restricted Stock. Any previous
agreement with respect to this matter is superseded by this Agreement. Unless
otherwise provided in the Plan, no term, provision or condition of this
Agreement may be modified in any respect except by a writing executed by both of
the parties hereto. No Person has any authority to make any representation or
promise not set forth in this Agreement. This Agreement has not been executed in
reliance upon any representation or promise except those contained herein.

[Signature Page Follows]

 

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EXECUTED effective as of the Grant Date.

 

LSB INDUSTRIES, INC., a Delaware corporation By:  

 

Name:   Mark T. Behrman Title:   President and Chief Executive Officer  

 

                             Participant

 

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