SHAREHOLDER S AGREEMENT
THIS AGREEMENT made effective the 1st day of December, 1995,
by and among ▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Shareholder and the member of Group
1") and SBL Corporation ("Shareholder and the member of Group
2").
WHEREAS, the Shareholder owns stock of LSB Industries, Inc.
("LSB") and SBL Corporation ("SBL") (collectively referred to as
the "Shares"); and
WHEREAS, the Shareholders desire to promote and protect
their mutual interest by imposing certain restrictions and
obligations on the Shares owned or to be acquired by the
Shareholders or upon the sale of the Shares by the Shareholders.
WHEREAS, the parties shall be designated as follows:
Group 1
▇▇▇▇▇▇ ▇▇▇▇▇▇
Group 2
SBL Corporation
NOW, THEREFORE, for mutual promises and adequate
consideration, the parties desire to and do hereby enter into the
following agreement.
1. Restriction on Transfer of Shares by Group 1. No
Shareholder in Group 1 or transferee of a Shareholder in Group 1,
or the estate or heirs of any Shareholder in Group 1 or
transferee thereof, shall dispose or transfer any of Shares to
any person or entity not in Group 1 without Group 2 Shareholders'
prior written consent, unless all such Shares are first offered
for sale to each of the Shareholders in Group 2 in the manner
provided below. Any purported transfer or disposition of Shares
in violation of the terms of this Agreement shall be null and
void.
Every such offer shall be made in writing, and shall state
that the Group 1 offeror offers to sell all (or a portion of) the
shares of LSB or SBL held or owned by him to the Shareholders in
Group 2. A copy of such offer shall be sent by certified mail,
return receipt requested, to each of the parties to this
Agreement who are then Shareholders in Group 2.
2. Purchase Price. For the purposes of this Agreement, the
purchase price of shares sold to Group 2 pursuant to the terms
set forth herein shall be as follows:
a. In the case of a sale of shares by Shareholder in
Group 1 to Group 2 due to involuntary transfer or legal
proceedings, including divorce, within the ten (10) years
following the effective date of this Agreement, the purchase
price of the shares from the disposing party shall be their
book value as shown by the balance sheet of the corporation
as at the close of the calendar year preceding the date of
offer subject to the definition of the term "book value"
hereinafter set forth, less an amount equal to any
investment in the corporation made by Shareholders in Group
2, less any amounts owed by Group 1 to any members of Group
2 and less a discount of 30%.
b. In the case of a sale by Shareholder in Group 1
for any reason after ten (10) years from the effective date
of this Agreement, the purchase price of the shares shall be
their "fair market value", the determination of which will
be made pursuant to the terms hereinafter set forth.
c. Notwithstanding any other provision herein, the
value of LSB shares held by any of the parties hereto shall
be the average daily closing price of LSB shares on the NYSE
or successor national quotation service during the previous
twelve months prior to the date for which a value is being
determined, less a discount ("haircut") of 30%. For the
purpose of this calculation, only business days shall be
used to determine price and the number of days to be
considered.
3. Definition of Book Value
a. For the purposes of this Agreement, the book
value of the shares shall be determined by the corporation's
regular certified public accountant, pursuant to the
provisions of GAAP; however, there shall be no allowance of
any kind shall be made for the corporations' goodwill, trade
name, or intangible assets.
b. Notwithstanding any other provision herein, the
value of LSB shares held by any of the parties hereto shall
be the average daily closing price of LSB shares on the NYSE
or successor national quotation service during the previous
twelve months prior to the date for which a value is being
determined, less a discount ("haircut") of 30%. For the
purpose of this calculation only business days shall be used
to determine price and the number of days to be considered.
The book value so determined by the certified public accountant
shall be binding and conclusive on all parties.
4. Definition of Fair Market Value.
a. For purposes of this Agreement, the fair market
value of the SBL shares shall be determined to be the price
at which the shares could be sold to a non-interested third
party taking into account a discount ("haircut") for a
minority interest, if applicable. This determination shall
be made by a certified appraisal service or accountant
selected by the Shareholders in Group 2.
b. Notwithstanding any other provision herein, the
value of LSB shares held by any of the parties hereto shall
be the average price of LSB shares on the NYSE or successor
national quotation service during the previous twelve months
prior to the date for which a value is being determined,
less a discount ("haircut") for restricted stock of 30%. For
the purpose of this calculation only business days shall be
used to determine price and the number of days to be
considered.
5. Payment of Purchase Price. The purchase price of the
shares shall be paid in cash or a note over a period of five (5)
or more years as determined by the parties.
6. Option to Purchase Shares. Each shareholder entitled
to purchase shall have a period of ninety (90) days from the time
of such offer to accept all or part of such offer. The
acceptance shall be in writing.
7. Failure to Exercise Option. If any of the Shares so
offered for purchase by Shareholder in Group 1 are not accepted
by Shareholders in Group 2 within the period of time prescribed
herein, the provisions of this Agreement shall thereafter no
longer apply to the offerors unaccepted shares; provided,
however, that if the unaccepted shares are not sold to another
party, then the provisions of this Agreement will continue to
apply to such shares. If, however, a shareholder thereafter
acquires any additional SBL or LSB shares, such shares shall be
subject to all the provisions of this Agreement.
8. Endorsement on Share Certificate. All shares of SBL
and LSB issued and delivered to ▇▇▇▇▇▇ ▇▇▇▇▇▇ or held by ▇▇▇▇▇▇
▇▇▇▇▇▇ shall have endorsed thereon the following statement:
"The shares represented by this certificate are subject to
the rights and limitations of an agreement dated December 1,
1995, between ▇▇▇▇▇▇ ▇▇▇▇▇▇ and SBL Corporation."
Even if this endorsement is not made, the terms and conditions of
this Agreement shall still remain in effect.
9. Binding Effect. This Agreement shall bind the parties
hereto, and their respective heirs, administrators, executors,
successors, and assigns any person or entity who purchases shares
from a Shareholder, provided that if the Shareholders in Group 1
dispose of their shares to a party that is not a member of Group
2, then the transferee of the shares will be bound by this
Agreement unless the Shareholders in Group 2 agree to waive the
provisions hereof in writing prior to such transfer.
10. Notices. All notices under this Agreement shall be
mailed to the parties at the following addresses:
Name Address
----------------------- -----------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
SBL Corporation ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Any party may change his mailing address by serving written
notice of such change and of such new address on all other
parties.
11. Entire Agreement. This Agreement supersedes all
agreements previously made between the parties relating to its
subject matter. There are no other understandings or agreements
between the parties regarding the matters covered herein. This
Agreement may only be amended by a writing signed by those
parties agreeing to such amendment.
12 Non-Waiver. No delay or failure by a party to exercise
any right under this Agreement, and no partial or single exercise
of that right, shall constitute a waiver of that or any other
right, unless otherwise expressly provided herein.
13. Headings. Headings in this Agreement are for
convenience only and shall not be used in interpret or construe
its provisions.
14. Governing Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the state of
Oklahoma.
15. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original.
16. Severability. If any part of this Agreement shall be
held unenforceable, the rest of this Agreement will nevertheless
remain in full force and effect.
17. Specific Enforcement. The parties hereto hereby
declare that it is impossible to measure in money the damages
which will accrue to a party hereto or to any of its or his
successors, heirs, personal representatives, or permitted assigns
by reason of a failure to perform any of the obligations under
this Agreement and agree that the terms of this Agreement shall
be, specifically enforceable in equity. If any party hereto or
its or his successors, heirs, personal representatives, or
permitted assigns institutes any action or proceeding to
specifically enforce the provisions hereof, any person against
whom such action or proceeding is brought hereby waives the claim
or defense therein that such party or personal representative has
an adequate remedy at law, and such person shall not urge in any
action or proceeding the claim or defense that such remedy at law
exists. It is, therefore, agreed that in the event that any
breach or threatened breach by any of the Shareholders of any of
the terms and conditions set forth herein, any of the other
parties hereto shall be entitled, in addition to any and all
other rights and remedies which it or they may have in law or in
equity, to apply for and obtain injunctive relief requiring the
defaulting party or party threatening to default to be restrained
from any such breach, threatened breach or to refrain from a
continuation of any actual or threatened breach.
18. Securities Law Compliance. Notwithstanding any other
provision hereof, no transfer shall be permitted or is intended
to be permitted hereby which would require any party to file any
registration statement under the Securities Act of 1933, as
amended, or any state's securities laws.
IN WITNESS WHEREOF, the parties hereto have signed this
Agreement and intend such Agreement to be in full force and
effect the 1st day of December, 1995.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
SBL CORPORATION
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:----------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
2\agrmnt\sharhold.syl