Document:

ex_42.htm

    FORM
OF

    

    CERTIFICATE
OF DESIGNATIONS

    

    of

    

    SERIES 4
JUNIOR PARTICIPATING CLASS C PREFERRED STOCK

    

    of

    

    LSB
INDUSTRIES, INC.

    

    (Pursuant
to Section 151 of the

    Delaware
General Corporation Law)

    

    _____________________________________________

    

    LSB
INDUSTRIES, INC., a corporation organized and existing under the General
Corporation Law of the State of Delaware (hereinafter called the “Corporation”),
hereby certifies that the following resolution was duly adopted by the Board of
Directors of the Corporation as required by Section 151 of the General
Corpora­tion Law at a meeting duly called and held on November 13,
2008:

     

    Creation
of Series 4 Junior Participating Class C Preferred Stock

     

    RESOLVED,
that pursuant to the authority granted to and vested in the Board of Directors
of this Corporation (hereinafter called the “Board of Directors” or the “Board”)
in accordance with the provisions of the Corporation’s Restated Certificate of
Incorporation, the Board of Directors hereby creates a new series of Class C
Preferred Stock, no par value, designated as Series 4 Junior Participating Class
C Preferred Stock, no par value, of the Corporation and hereby states the
designation and number of shares, and does hereby establish and fix the relative
rights, preferences, designations and relative participating, optional and other
special rights, and qualifications, limitations and restrictions thereof as
follows:

     

    Series 4
Junior Participating Class C Preferred Stock

     

    Section
1. Designation and
Amount.  The shares of such series shall be designated as
“Series 4 Junior Participating Class C Preferred Stock” (“Series 4 Class C
Preferred Stock”), the shares of such series shall be no par value, and the
number of shares constituting the Series 4 Class C Preferred Stock shall be
350,000.  Such number of shares of Series 4 Class C Preferred Stock
may not be issued in fraction of a share (other than fractions which are
integral multiples of one one-hundredth of a preferred share).  The
number of shares constituting Series 4 Class C Preferred Stock may be increased
or decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series 4 Class C Preferred Stock
to a  number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of 

     

    
      
         

      

      
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    any
outstanding securities issued by the Corporation convertible into Series 4 Class
C Preferred Stock.

     

    Section
2. Dividends and
Distributions.

     

    (A) Subject
to the prior and superior rights of the holders of any shares of any series of
the Corporation’s preferred stock and/or Class C Preferred Stock ranking prior
and superior to the shares of Series 4 Class C Preferred Stock with respect to
dividends, if any, the holders of shares of Series 4 Class C Preferred Stock, in
preference to the holders of Common Stock, par value $0.10 per share (the
“Common Stock”), of the Corporation, and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the last business day of March, June, September and December in each year (each
such date being referred to herein as a “Quarterly Dividend Payment Date”),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series 4 Class C Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$1.00, or (b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series 4 Class C Preferred Stock.  In the event the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which holders of
shares of Series 4 Class C Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

     

    (B) The
Corporation shall declare a dividend or distribution on the Series 4 Class C
Preferred Stock as provided in paragraph (A) of this Section immediately after
it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the
Series 4 Class C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.

     

    (C) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series 4 Class
C Preferred Stock from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares of Series 4 Class C Preferred Stock, unless the
date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends 

     

    
      
         

      

      
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    on such
shares shall begin to accrue and be cumulative from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series
4 Class C Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date.  Accrued but unpaid dividends shall not bear
interest.  Dividends paid on the shares of Series 4 Class C Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding.  The Board of Directors may fix a record date for the
determination of holders of shares of Series 4 Class C Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.

     

    Section
3. Voting
Rights.  The holders of shares of Series 4 Class C Preferred
Stock shall have the following voting rights:

     

    (A) Each
share of Series 4 Class C Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the stockholders of the
Corporation.

     

    (B) Except as
otherwise provided herein, in the Restated Certificate of Incorporation of the
Corporation, in any other Certificate of Designation of the Corporation or by
applicable law, the holders of shares of Series 4 Class C Preferred Stock, the
holders of shares of Common Stock and the holders of any other class or series
of capital stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.

     

    (C) Except as
set forth in this Certificate of Designations or as otherwise required by
applicable law, holders of Series 4 Class C Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent that they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.

     

    Section
4. Certain
Restrictions.

     

    (A) Whenever
quarterly dividends or other dividends or distributions payable on the Series 4
Class C Preferred Stock as provided in Section 2 hereof are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series 4  Class C Preferred Stock
outstanding shall have been paid in full, or declared and a sum sufficient for
the payment therefor be set apart for payment and be in the process of payment,
the Corporation shall not:

     

    i. declare
or pay dividends, or make any other distributions, on any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series 4 Class C Preferred Stock;

     

    ii. declare
or pay dividends, or make any other distributions, on any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series 4 Class C Preferred Stock, except dividends paid
ratably on the Series 4 Class C Preferred Stock and all such parity stock on
which dividends are 

     

    
      
         

      

      
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    payable
or in arrears in proportion to the total amounts to which the holders of all
such shares are then entitled;

     

    iii. redeem or
purchase or otherwise acquire for consideration shares of any stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series 4 Class C Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such junior stock
in exchange for shares of any stock of the Corporation ranking junior (either as
to dividends or upon dissolution, liquidation or winding up) to the Series 4
Class C Preferred Stock; or

     

    iv. redeem or
purchase or otherwise acquire for consideration any shares of Series 4 Class C
Preferred Stock, or any shares of stock ranking on a parity with the Series 4
Class C Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.

     

    (B) The
Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation
unless the Corporation could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.

     

    Section
5. Reacquired
Shares.  Any shares of Series 4 Class C Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition
thereof.  All such shares shall upon their cancellation become
authorized but unissued shares of Class C Preferred Stock and may be reissued as
part of a new series of Class C Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Restated Certificate of
Incorporation of the Corporation, or in any other Certificate of Designations
creating a series of Class C Preferred Stock or any other preferred stock or any
similar stock or as otherwise required by law.

     

    Section
6. Liquidation, Dissolution or
Winding Up.  Upon any liquidation, dissolution or winding up of
the Corporation, no distribution shall be made (1) to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series 4 Class C Preferred Stock unless, prior thereto, the
holders of shares of Series 4 Class C Preferred Stock shall have received $100
per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series 4 Class C Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series 4 Class C Preferred
Stock, except distributions made ratably on the Series 4 Class C Preferred Stock
and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up.  In the event the Corporation shall at any time declare or

     

    
      
         

      

      
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    pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Series 4
Class C Preferred Stock were entitled immediately prior to such event under the
proviso in clause (1) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

     

    Section
7. Consolidation, Merger,
etc.  In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series 4 Class C
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged.  In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series 4 Class C Preferred Stock  shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

     

    Section
8. No
Redemption.  The shares of Series 4 Class C Preferred Stock
shall not be redeemable.

     

    Section
9. Ranking.  The
Series 4 Class C Preferred Stock shall rank junior to all other series of the
Corporation’s Class C Preferred Stock and all other series of the Corporation’s
other classes of preferred stock as to the payment of dividends and the
distribution of assets upon any liquidation, dissolution or winding up of the
Corporation unless the terms of any such series shall provide
otherwise.

     

    Section
10. Amendment.  So
long as any shares of the Series 4 Class C Preferred Stock are outstanding, the
Corporation shall not, without the affirmative vote of at least a majority in
number of shares of the Series 4 Class C Preferred Stock then outstanding,
amend, alter, or repeal any of the provisions of this Certificate of
Designations or the Corporation’s Restated Certificate of Incorporation so as to
affect adversely the preferences, special rights or powers of the shares of
Series 4 Class C Preferred Stock.

     

    
      
         

      

      
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    IN
WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the
Corporation by its President and attested by its Secretary this ____ day of
_____________, 2009.

     

    LSB
INDUSTRIES, INC.

     

    

    ATTEST:

     

    

     

    

                                                          Secretary President

    

    (SEAL)

     

    
      
         

      

      
        Page 6 of
6ex_43.htm

    AMENDMENT

    to

    RENEWED RIGHTS
AGREEMENT

    

    

    This
AMENDMENT TO RENEWED RIGHTS AGREEMENT (the “Amendment”) is entered into this
3nd
day of December 2008, by and between LSB INDUSTRIES, INC., a Delaware
corporation (the “Company”), and UMB BANK, N.A. (“UMB”), and amends that certain
Renewed Rights Agreement, dated January 6, 1999 (the “Agreement”).

    

    WHEREAS,
on January 6, 1999, the Company adopted a preferred share purchase rights plan
(the “Rights Plan”) and entered into the Agreement with Bank One,
N.A.;

    

    WHEREAS,
the Company has been informed that the rights and obligations of Bank One, N.A.
as the rights agent under the Agreement were assumed by JPMorgan Chase
(“Chase”), and subsequently assumed by The Bank of New York Mellon
(“Mellon);

    

    WHEREAS,
neither Chase nor Mellon have been able to confirm that one or the other is
acting as the current rights agent under the Agreement;

    

    WHEREAS,
Section 21 of the Agreement provides that the Company may remove the rights
agent and appoint a new rights agent;

    

    WHEREAS,
the Company desires to appoint UMB as rights agent, and UMB desires to serve as
rights agent, in accordance with the terms of the Agreement;

    

    WHEREAS,
the Agreement provides that each Right (as defined in the Agreement) may be
exercised at an initial Purchase Price (as defined in the Rights Plan) of
$20.00, subject to adjustment;

    

    WHEREAS,
the financial advisor to the Company regarding the Company’s Rights Plan and
Agreement, Sterne Agee and Leach, Inc., has recommended to the Company’s Board
of Directors that the initial Purchase Price per Right be increased to $47.75
during the remaining term of the Agreement;

    

    WHEREAS,
the Board of Directors determined that it is desirable and in the best interest
of the Company and its stockholders that the Company to amend the Agreement
pursuant to the terms of this Amendment (a) to reflect The Bank of New York
Mellon as the rights agent and (b) to increase the initial Purchase Price for
the exercise of a Right as set forth in Section 7(b) of the Agreement from
$20.00 to $47.75.

    

    NOW,
THEREFORE, the Company and the Rights Agent hereby agree to amend the Agreement
as follows:

    

    1. Amendment to Section
7.  Paragraph (b) of Section 7 of the Agreement is hereby
amended by deleting “$20.00” and substituting “$47.75” in lieu
thereof.

    

    
      
         

      

      
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    2.  Amendment to Agreement and
Section 26.  Whenever there is a reference to Bank One, N.A. as
the rights agent in the Agreement and any exhibits attached thereto, such shall
be deleted and changed to UMB Bank, n.a..  Section 26 is hereby
amended by deleting the notice information for Bank One, N.A. and substituting
the following in lieu thereof:

    

    UMB Bank,
n.a.

    1010
Grand Blvd., 4th
Flr.

    Kansas
City, MO  64106

    Attn:  
Douglas Hare, CCTS

        Vice
President

     

    3.           Amendment to Exhibit
“B”.  The first paragraph of the form of Right Certificate,
attached as Exhibit “B” to the Agreement is hereby amended by:

     

    
      	
               
      

            	
              (a)

            	
              inserting
      in the third line thereof “, as amended by the Amendment to Renewed Rights
      Agreement, dated December 1, 2008” immediately following the phrase “dated
      as of January 6, 1999;”

            

    

     

    
      	
               
      

            	
              (b)

            	
              deleting
      the reference to “Bank One, N.A.” and substituting in lieu thereof “UMB
      Bank, n.a.;”

            

    

     

    
      	
               
      

            	
              (c)

            	
              deleting
      “$20.00” and substituting in lieu thereof “$47.75;”
  and

            

    

     

    
      	
               
      

            	
              (d)

            	
              deleting
      the phrase “Purchase Price as of January 6, 1999” and substituting in lieu
      thereof the phrase “Purchase Price as of December 1,
  2008.”

            

    

     

    4.           Amendment to Exhibit
“C”.  The form of Summary of Rights to Purchase Preferred
Shares, attached as Exhibit “C” to the Agreement is hereby amended
by:

     

    
      	
               
      

            	
              (a)

            	
              in
      the first paragraph, deleting “$20.00” and substituting in lieu thereof
      “$47.75;” and

            

    

     

    
      	
               
      

            	
              (b)

            	
              in
      the first paragraph, deleting the last sentence thereof and inserting the
      sentence “The description of the Rights are set forth in the Renewed
      Rights Agreement (the “Renewed Rights Agreement”), dated as of January 6,
      1999, as amended by the Amendent to Renewed Rights Agreement, dated
      December 1, 2008, between the Company and UMB Bank, n.a.” in lieu thereof;
      and

            

    

     

    
      	
               
      

            	
              (d)

            	
              in
      the last paragraph, conforming the reference to the Form 8-A to read,
      “Form 8 A, dated January 27, 1999, as amended by Amendment No. 1 to
      Form 8-A, dated December 1, 2008.”

            

    

     

    5.           Continuing
Effect.  The Agreement, as modified by this Amendment, will
remain in full force and effect.

    

    
      
         

      

      
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    IN
WITNESS WHEREOF, this Amendment to the Agreement is executed effective the day
and year first above written.

    

    

    LSB
INDUSTRIES, INC.

    

    

    By: /s  Jack E.
Golsen                                    

      Jack
E. Golsen, Chief Executive Officer

    

    

    

    UMB BANK,
N.A.

    

    

     By: /s/
Douglas
Hare                                      

    Douglas Hare, CCTS

    Vice
President

    

    
      
         

      

      
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