To Be Held May 14, 2021

LSB INDUSTRIES, INC.

Virtually Meeting Only

Please register at www.proxydocs.com/LXU

To the Stockholders of

LSB Industries, Inc.

The 2021 Annual Meeting of the Stockholders of LSB Industries, Inc. (the “Company”) will be held in a virtual only format.  You will not be able to attend the annual meeting in person.  Registration is required online at www.proxydocs.com/LXU.  The purpose of the Annual Meeting of Stockholders is the consideration and voting:

(1)    To elect three nominees to the Board of Directors;

(2)    To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2021;

(3)    To approve the Amended and Restated 2016 Long Term Incentive Plan;

(4)    To ratify the Section 382 Rights Agreement; and

(5)    To approve, on an advisory basis, named executive officer compensation.

The Annual Meeting will be held in a virtual-only meeting format, via live video webcast that will provide stockholders with the ability to participate in the Annual Meeting, vote their shares and ask questions. We are implementing a virtual-only meeting format in order to leverage technology to enhance stockholder access to the Annual Meeting by enabling attendance and participation from any location around the world. We believe that the virtual-only meeting format will give stockholders the opportunity to exercise the same rights as if they had attended an in-person meeting and believe that these measures will enhance stockholder access and encourage participation and communication with our Board of Directors and management.

BENEFITS OF A VIRTUAL ANNUAL MEETING

We believe a virtual-only meeting format facilitates stockholder attendance and participation by enabling all stockholders to participate fully and equally, and without cost, using an Internet-connected device from any location around the world. In addition, the virtual-only meeting format increases our ability to engage with all stockholders, regardless of size, resources or physical location, and enables us to protect the health and safety of all attendees, particularly in light of the COVID-19 pandemic.  

Stockholders of record and beneficial owners as of the close of business on March 15, 2021, the record date, will have the ability to submit questions and vote electronically at the Annual Meeting via the virtual-only meeting platform.

ATTENDANCE AT THE VIRTUAL ANNUAL MEETING

Only stockholders of record and beneficial owners of shares of our common stock as of the close of business on March 15, 2021, the

record date, may attend and participate in the Annual Meeting, including voting and asking questions during the virtual Annual Meeting.  You will not be able to attend the Annual Meeting physically in person.

In order to attend the Annual Meeting, you must register at www.proxydocs.com/LXU. Upon completing your registration, you will receive further instructions via email, including a unique link that will allow you access to the Annual Meeting and to vote and submit questions during the Annual Meeting.

As part of the registration process, you must enter the control number located on your proxy card, voting instruction form, or Notice of Internet Availability.  If you are a beneficial owner of shares registered in the name of a broker, bank or other nominee, you will also need to provide the registered name on your account and the name of your broker, bank or other nominee as part of the registration process.

On the day of the Annual Meeting, May 14, 2021, stockholders may begin to log in to the virtual-only Annual Meeting 15 minutes prior to the Annual Meeting.  The Annual Meeting will begin promptly at 8:30 a.m. and CDT.

We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting. If you encounter any difficulties accessing the virtual-only Annual Meeting platform, including any difficulties voting or submitting questions, you may call the technical support number that will be posted in your instructional email.

QUESTIONS AT THE VIRTUAL ANNUAL MEETING

Our virtual Annual Meeting will allow stockholders to submit questions before and during the Annual Meeting. During a designated question and answer period at the Annual Meeting, we will respond to appropriate questions submitted by stockholders.  

We will answer as many stockholder-submitted questions as time permits, and any questions that we are unable to address during the Annual Meeting will be answered following the meeting, with the exception of any questions that are irrelevant to the purpose of the Annual Meeting or our business or that contain inappropriate or derogatory references which are not in good taste.  If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.

YOU WILL NOT BE ABLE TO ATTEND THE ANNUAL MEETING IN PERSON.

Your vote is important. Please sign and promptly return the enclosed proxy card in the accompanying self-addressed envelope, which requires no postage if mailed in the United States.

In addition, you can vote by telephone or Internet. Instructions are included on the proxy card.

Oklahoma City, Oklahoma

April 19, 2021

What matters are being considered?

You will be voting on each of the following items of business:

The Board recommends a vote “FOR” each of the director nominees and a vote “FOR” each of Proposals 2 and 3.

What is a proxy?

A proxy is your legal appointment of another person to vote the shares that you own in accordance with your instructions. The person you appoint to vote your shares is also called a proxy. On the enclosed proxy card, you will find the names of the persons designated by the Company to act as proxies to vote your shares at the annual meeting. The designated proxies are required to vote your shares in the manner you instruct.

Will other matters be brought before the annual meeting?

The Board does not intend to bring any other matters before the annual meeting and does not expect any other items of business because the deadline for stockholder proposals and nominations has already passed. However, if any other matter is properly brought before the annual meeting, the accompanying proxy gives discretionary authority to the

persons named in the proxy with respect to any other matters that might be brought before the annual meeting. Those persons intend to vote that proxy in accordance with their best judgment on such matter.

Who is entitled to vote at the annual meeting?

You or your proxy may vote if you owned voting stock as of the close of business on March 15, 2021, which is the record date for determining who is eligible to vote at the annual meeting.

As of the close of business on the record date, we had the following number of shares of common stock and voting preferred stock issued and outstanding which were eligible to be voted:

Shares of our Series B Preferred, Series D Preferred and Series F-1 Preferred are referred to as our “voting preferred stock.” All of our outstanding shares of common stock and voting preferred stock will vote together as a single class on all matters coming before the annual meeting.

What constitutes a quorum?

In order to conduct the annual meeting, we must have a quorum. Holders of a majority of the total of all of the outstanding shares of common stock and voting preferred stock will constitute a quorum for the annual meeting.

What vote is required to approve the items under consideration?

Are abstentions counted?

Abstentions occur when stockholders are present in person or by proxy at the annual meeting but fail to vote or voluntarily withhold their vote for any of the matters upon which the stockholders are voting. If your proxy indicates an abstention from voting on the proposal, the shares represented will be counted as present for the purpose of determining a quorum, but they will not be voted on any matter at the annual meeting. If you abstain from voting, you have not cast a vote and the abstention will not be counted in determining the outcome of the proposals.

How do I cast my vote?

Registered Holders. If shares are registered in your name, you may vote those shares in person at the annual meeting or by proxy. If you decide to vote by proxy, you may do so in any ONE of the following three ways.

If your shares are held in street name and you do not give voting instructions, the broker will only be entitled to vote your shares in its discretion with respect to the ratification of the appointment of our independent registered public accounting firm. Without voting instructions from you, the record holder will not be permitted to vote your shares with respect to the election of directors or the advisory vote on executive compensation. Your shares would therefore be considered broker non-votes with respect to these proposals and would have no effect on the proposal. Accordingly, it is important for you to instruct your broker how you wish to vote your shares.

Can I change my mind after I vote?

Yes, you may change your mind at any time before the polls close at the annual meeting, which will be at 8:30 a.m. CDT on May 14, 2021. If you hold your shares directly in record name, you can change your vote by:

In the absence of a revocation, shares represented by the proxies will be voted at the annual meeting. Your attendance at the annual meeting will not automatically revoke your proxy. If you do not hold your shares directly, you should follow the instructions provided by your broker, bank or nominee to revoke your previously voted proxy.

What if I sign and return my proxy card but I do not include voting instructions?

If you properly complete and submit a proxy card, but do not indicate any contrary voting instructions, your shares will be voted as follows:

If any other business comes before the stockholders for a vote at the annual meeting, your shares will be voted in accordance with the discretion of the holders of the proxy. The Board knows of no matters, other than those previously stated, to be presented for consideration at the annual meeting.

What does it mean if I receive more than one proxy card?

It means that you have multiple accounts with brokers and/or our transfer agent. Please vote all of these shares. We recommend that you contact your broker and/or our transfer agent to consolidate as many accounts as possible under the same name and address. Our transfer agent is Computershare Trust Company, N.A., 462 South 4th Street, Suite 1600, Louisville, KY 77845, (800) 736-3001 (U.S. and Canada) and (781) 575-3100 (outside U.S. and Canada).

Will my shares be voted if I do not provide my proxy?

If your shares are registered in your name, they will not be voted unless you submit your proxy or vote in person at the annual meeting. As discussed above, if your shares are held in street name and you do not give voting instructions, the broker will only be entitled to vote your shares in its discretion with respect to the ratification of the appointment of our independent registered public accounting firm.

Who will count the votes?

All votes will be tabulated by Mediant Communications, Inc., who will serve as the inspector of election for the annual meeting.

What is the deadline for submission of stockholder proposals for the 2022 annual meeting?

If you wish to submit proposals to be included in our proxy statement for our 2022 annual meeting, proposals must be received at our principal executive offices in writing not later than December 15, 2021 and should be addressed to Michael J. Foster, Secretary, LSB Industries, Inc., 3503 NW 63^rd Street, Suite 500, Oklahoma City, Oklahoma 73116.

If you wish to present a proposal, but you fail to notify us by such deadline, you will not be entitled to present the proposal at the 2022 annual meeting.

For more information regarding stockholder proposals, please see “Stockholder Proposals” below.

Who is soliciting proxies?

We will pay for preparing, printing and mailing this Proxy Statement. Proxies may be solicited on our behalf by our directors, officers or employees, without additional consideration, in person or by telephone, electronic transmission and facsimile transmission. We will reimburse banks, brokers and other custodians, nominees and fiduciaries for their out-of-pocket costs of sending the proxy materials to our beneficial stockholders.

Stockholder List

A list of stockholders entitled to vote at the annual meeting will be open for examination by any stockholder for any purpose relevant to the annual meeting during ordinary business hours commencing 10 days before the annual meeting. The list will be maintained at our principal executive offices located at 3503 NW 63^rd Street, Suite 500, Oklahoma City, Oklahoma 73116.

General

Our Certificate of Incorporation and Bylaws provide for the division of the Board into three classes, each class consisting as nearly as possible of one-third of the whole. The term of office of one class of directors expires each year; with each class of directors elected for a term of three years and until the stockholders elect their qualified successors.

Agreements as to Certain Directors and Committees

Board Representation and Standstill Agreement

On December 4, 2015, the Company entered into the Board Representation and Standstill Agreement (the “Board Representation and Standstill Agreement”), by and among the Company, LSB Funding LLC (“LSB Funding”), Security Benefit Corporation (“Security Benefit”), Todd Boehly, Jack E. Golsen (“J. Golsen”), Steven J. Golsen (“S. Golsen”), Barry H. Golsen (“B. Golsen”), Linda Golsen Rappaport (“L. Rappaport”), Golsen Family LLC, an Oklahoma limited liability company (“Family LLC”), SBL LLC, an Oklahoma limited liability company (“SBL LLC”), and Golsen Petroleum Corp., an Oklahoma corporation (“GPC,” and together with Messrs. J. Golsen, S. Golsen and B. Golsen, Ms. L. Rappaport, Family LLC, SBL LLC, each a “Golsen Holder” and, collectively, the “Golsen Holders”). On October 26, 2017 and October 18, 2018, the parties to the Board Representation and Standstill Agreement entered into amendments thereto (the “Amendments”). The Board Representation and Standstill Agreement and the Amendments are collectively the “Amended Board Representation and Standstill Agreement”.

LSB Funding Designees

Pursuant to the Amended Board Representation and Standstill Agreement and based upon the equity holdings of LSB Funding, the Company has agreed to permit LSB Funding, an affiliate of Security Benefit, to designate up to three nominees to the Board, at least one of which will meet the NYSE standards of independence. LSB Funding designated, and our Board appointed, Jonathan S. Bobb and Kanna Kitamura to the Board.

Golsen Designees

Under the Amended Board Representation and Standstill Agreement and based upon the Golsen Holders’ equity holdings, the Golsen Holders, collectively, have the right to designate two directors. Messrs. Barry H. Golsen and Steven L. Packebush are the current Golsen designees.  

Other Governance Matters

Our Bylaws provide that the Board may change the total number of directors on our Board from time to time provided that the minimum number of directors is 3 and the maximum is 14. Currently there are 9 directors.

As discussed under “Corporate Governance — Nominating Committee,” our Nominating and Corporate Governance Committee (the “Nominating Committee”) reviews the composition of the Board as part of its assessment of the Board’s performance, and effectiveness. The Nominating Committee values certain characteristics in all Board members, including personal and professional integrity, reputation, outstanding professional achievement, and sound business judgment. The Nominating Committee evaluates each individual director in the context of the Board as a whole with the goal of recommending an effective group with a diversity of experience and skills that exercises sound business judgment in the interest of our business and our stockholders. Consistent with their responsibilities, members of the Nominating Committee have interviewed and evaluated each of the current nominees for director and the Nominating Committee has determined that each is highly qualified to serve as a member of our Board.

The following sets forth certain information regarding the director nominees and other directors whose term will continue after the annual meeting.

Overview

The LSB Industries, Inc. 2016 Long Term Incentive Plan, which we refer to as the “2016 LTIP”, was originally approved by our Board and our stockholders in 2016.  On March 4, 2021, upon the recommendation of its Compensation Committee, our Board approved, subject to stockholder approval, the 2016 Long Term Incentive Plan (as amended and restated March 4, 2021), which we refer to as the “Amended LTIP”.  We are requesting that stockholders approve the Amended LTIP to (i) increase the number of shares of our Company common stock (“Common Stock”) available for issuance thereunder by 3,000,000 shares; (ii) remove certain general references to Section 162(m) of the Internal Revenue Code of 1986, as amended, and applicable Treasury Regulations (the “Code”) that are no longer applicable following the changes to Section 162(m) under the Tax Cuts and Jobs Act; (iii) extend the term of the plan until the 10th anniversary of the effective date of the Amended LTIP, (iv) permit prospective service providers who are expected to become eligible to participate in the plan to participate before commencing services; and (v) make certain other updates and changes. The material terms of the Amended LTIP are described under “Description of the Amended LTIP” below, which is qualified in its entirety by reference to the Amended LTIP plan document attached as Appendix A to this Proxy Statement. We recommend that our stockholders read the entire Amended LTIP carefully before voting on this proposal.

Background and Purpose of Proposal

The use of stock-based awards has been, and will continue to be, a key component of LSB’s compensation program.  Stock-based compensation awards assist us in attracting and retaining capable, talented individuals to serve in the capacities of officers, employees, and other individual services providers, including non-employee directors and consultants.  As of March 15, 2021, 215,393 shares remained available for issuance under the 2016 LTIP.  Our Board has determined, based in part on input from Compensation Strategies, our Compensation Committee’s independent compensation consultant, that we will not have a sufficient number of shares available under the 2016 LTIP to continue to grant stock-based awards at our current levels past May 4, 2021, which we believe would place us at a competitive disadvantage to our competitors in recruiting and retaining key talent.  

In determining the size of the proposed share increase under the Amended LTIP, our Board considered the (i) stock-based awards that we have granted over the past three years, (ii) our share-based compensation overhang, (iii) the effects awards under the Amended LTIP would have on the Company’s share dilution, and (iv) the role stock-based awards are expected to play in our compensation program going forward, including our anticipated future grants.  Between 2018 and 2020, our average burn rate was 1.75%, which positioned us at approximately the 56th percentile of our Compensation Peer Group described in the Compensation Discussion and Analysis in this Proxy Statement, calculated based on the number of stock-based awards we granted in 2018, 2019 and 2020 (210,602, 285,956, and 31,138, respectively, with performance-based awards counted at target ) and the weighted average number of shares of Common Stock outstanding in 2018, 2019 and 2020 (28,617,458, 28,789,505, and 29,307,144 shares, respectively).  Based on this analysis, our Board estimates that the availability of an additional 3,000,000 shares under the Amended LTIP should provide a sufficient number of shares to enable the Company to continue to grant stock-based awards for approximately the next four years.

If the Amended LTIP is not approved by our stockholders, the Amended LTIP will not become effective and we will continue to grant awards under the 2016 LTIP, but the shares that remain available would be insufficient to continue to provide stock-based awards at our current levels, and our Board believes that will materially affect our ability to attract and retain key talent.  

Existing Equity Plan Information

The 2016 LTIP is our only current long-term incentive plan under which stock-based awards may be granted to service providers of the Company and its Subsidiaries.  A limited number of stock-based awards remain outstanding under the LSB Industries, Inc. 2008 Incentive Stock Plan as amended (the “2008 Plan”), which preceded the 2016 LTIP.

The table below includes aggregated information regarding LSB stock-based compensation awards as of March 15, 2021.

Description of the LTIP

The following is a description of the principal features of the Amended LTIP.  This description does not purport to be a complete description of all of the provisions of the Amended LTIP and is qualified in its entirety by reference to the full text of the Amended LTIP, which is attached as Appendix A to this Proxy Statement.  Capitalized terms used in this description, but not otherwise defined, have the meanings given to them in the Amended LTIP.

General

The purpose of the Amended LTIP is to provide a means to attract and retain employees, directors and consultants through affording such individuals a means to acquire and maintain stock ownership or awards, the value of which is tied to the performance of the Company. The Amended LTIP also provides additional incentives and reward opportunities designed to strengthen such individuals’ concerns for the welfare of the Company and their desire to remain in its employment.

The Amended LTIP is intended to achieve this purpose by permitting the grant of a number of different types of awards, including the grant of (i) incentive stock options intended to qualify as “incentive stock options under Section 422 of the Code (“ISOs”), (ii) stock options that are not intended to qualify as ISOs (“Nonstatutory Options” and, together with ISOs, “Options”), (iii) stock appreciation rights (“SARs”), (iv) restricted stock awards (“Restricted Stock Awards”), (v) restricted stock units (“RSUs”), (vi) dividend equivalents (“Dividend Equivalents”), (vii) awards of unrestricted shares of Common Stock (“Stock Awards”), (viii) other awards related to the Common Stock (in terms of being valued, denominated, paid or otherwise defined by reference to common stock) (“Other Stock-Based Awards”), (ix) cash awards (“Cash Awards”), (x) conversion awards (“Conversion Awards”), (xi) awards, the grant, exercise, vesting or settlement of which are subject to one or more performance vesting conditions

(“Performance Awards”), and (xii) any combination of such awards (collectively referred to as “Awards”).

Administration

Our Board has appointed its Compensation Committee to administer the Amended LTIP pursuant to its terms and all applicable state, federal, or other rules or laws, except in the event the Board chooses to take action under the Amended LTIP. Our Board may also take any action designated to the Compensation Committee. Unless otherwise limited by the Amended LTIP, Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), any provisions of the Code or other applicable laws, the Compensation Committee has broad authority to administer the Amended LTIP, interpret its provisions, and adopt policies for implementing the Amended LTIP. This authority includes the power to (i) designate Eligible Persons as Participants in the Amended LTIP, (ii) determine the type or types of Awards to be granted to Participants, (iii) determine the number of shares or the amount of cash to be covered by Awards, (iv) determine the terms and conditions of Awards (as well as any modifications to such terms and conditions), (v) determine whether and under what circumstances Awards may be vested, settled, exercised cancelled or forfeited, (vi) interpret and administer the Amended LTIP and any Award agreement, and (vii) make any determination or take any action the Compensation Committee deems necessary or desirable for administration of the Amended LTIP.  The Compensation Committee may delegate certain of its authority under the Amended LTIP.  Each action and determination of the Compensation Committee under the Amended LTIP will be in the Committee’s sole and absolute discretion and will be final, conclusive, and binding on all persons, including the Company, its Subsidiaries, their respective stockholders, Participants, beneficiaries, and permitted transferees claiming rights from or through a Participant.

Eligibility

Current and prospective officers, employees, and other service providers (including directors and consultants) of the Company and its Subsidiaries (each, an “Eligible Person”) will be eligible to be granted Awards under and otherwise participate in the Amended LTIP.

Any person who is designated by the Compensation Committee to receive an Award under the Amended LTIP will be a “Participant.” An employee on leave of absence may be considered still employed by the Company or a Subsidiary for purposes of determining eligibility for participation under the Amended LTIP. Any individual granted an Award which remains outstanding under the Amended LTIP, including an individual who is no longer an Eligible Person, will continue to be a Participant for purposes of the Amended LTIP.

Number of Shares

The maximum aggregate number of shares of Common Stock reserved and available for issuance under the Amended LTIP will be 5,295,582, which includes (i) 3,000,000 new shares pursuant to this Proposal 2, (ii) 215,393 shares that were reserved and available for issuance pursuant to future awards under the 2016 LTIP immediately prior to the effective date of the Amended LTIP, and (iii) 2,295,582 shares subject to outstanding awards granted under the 2016 LTIP or the 2008 Plan prior to the effective date of the Amended LTIP.

Shares of Common Stock subject to any 2016 LTIP or Amended LTIP award that is canceled, forfeited, expires unexercised, is settled in cash, or is otherwise terminated without a delivery of such shares to a Participant will again be available for Awards under the Amended LTIP to the extent allowable by law, except that (a) shares tendered or withheld in payment of any exercise or purchase price or related taxes, (b) shares that were subject to an Option or an SAR but were not issued or delivered as a result of net settlement or net exercise, and (c) shares repurchased on the open market with the proceeds of an Option’s exercise price, in each case, will not be available for future Awards under the Amended LTIP.  If an Award may be settled only in cash, such Award need not be counted against the share limits in the Amended LTIP. Shares subject to any outstanding awards that were granted under the 2008 Plan may become available for issuance pursuant to Awards under the Amended LTIP to the extent such shares would have become available under the share recycling provisions of the 2008 Plan.

The Compensation Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the cash of Substitute Awards), and make adjustments if the number of shares of Common Stock actually delivered differs from the number of shares previously counted in connection with an Award.

The shares to be delivered under the Amended LTIP will be made available from authorized but unissued shares of stock, stock held in the treasury of the Company, or previously issued shares of stock reacquired by the Company, including shares purchased on the open market. The fair market value of Common Stock on a given date will be the closing price as reported by the NYSE on that date (or if no sales occur on that date, on the last preceding date on which sales of Common Stock are so reported).  As of March 15, 2021, the closing price of a share of Common Stock was $4.93.

Limitations on Awards to Covered Employees.

An individual designated by the Compensation Committee as likely to be a “covered employee” under Section 162(m) of the Code for a year may not be granted—in respect of that year—(i) Awards relating to more than 1,000,000 shares of Common Stock multiplied by the number of full or partial calendar years in any performance periods established with respect to those Awards (other than Awards designated to be paid only in cash or the settlement of which is not based on a number of shares of Common Stock) or (ii) Awards designated to be paid only in cash, or the settlement of which is not based on a number of shares of Common Stock, having a grant date value in excess of $5,000,000 multiplied by the number of full or partial calendar years in any performance periods established with respect to those Awards.

Limitations on Awards to Non-Employee Directors.

A non-employee member of our Board may not be granted—in respect of any year—Awards having a grant date value in excess of $500,000 multiplied by the number of full or partial calendar years in any performance periods established with respect to those Awards (except that this limit will be without regard to any Awards granted to a non-employee Board member as compensation for services provided to the Company or a Subsidiary other than in his or her capacity as a Board member).

Types of Awards

Stock Options.

The Company may grant Options to Eligible Persons, including (i) ISOs and (ii) Nonstatutory Options. The exercise price of each Option granted under the Amended LTIP will be stated in the Option agreement and may vary between individuals and between grants, provided that the exercise price for an Option must not be less than the greater of (a) 100% of the fair market value per share of Common Stock as of the date of grant of the Option or (b) the par value per share of Common Stock. For any Option intended to qualify as an ISO, the recipient must be an employee of the Company (or a parent or subsidiary), and, immediately before the time the ISO is granted, the recipient may not own stock possessing more than 10% of the total combined voting power or value of all classes of stock of the Company or a Subsidiary unless, at the time the ISO is granted, the exercise price of the ISO is at least 110% of the fair market value of the Common Stock underlying the ISO. Options may be exercised as the Compensation Committee determines, but not later than 10 years from the date of grant (or five years from the date of grant in the case of ISOs granted to an individual who owns stock possessing more than 10% of the total combined voting power or value of all classes of stock of the Company or a Subsidiary). The Compensation Committee will determine the methods and form of payment for the exercise price of an Option. The Amended LTIP prohibits the Company from repricing Options without the approval of the Company’s stockholders.

SARs.

An SAR is the right to receive an amount equal to the excess of the fair market value of one share of Common Stock on the date of exercise over the grant price of the SAR, as determined by the Compensation Committee, provided, that the grant price of the SAR must not be less than the greater of (a) 100% of the fair market value per share of the Common Stock as of the date of grant of the SAR or (b) the par value per share of Common Stock. SARs may be either free-standing or in tandem with other Awards. SARs awarded in connection with an Option will entitle the holder, upon

exercise, to surrender the related Option or portion thereof relating to the number of shares for which the SAR is exercised. The surrendered Option or portion thereof will then cease to be exercisable. However, an SAR awarded in connection with an Option is exercisable only to the extent that the related Option is exercisable. SARs granted independently of an Option will be exercisable as the Compensation Committee determines. The term of an SAR will be for a period determined by the Compensation Committee but will not exceed 10 years. SARs may be paid in cash, stock or a combination of cash and stock, as the Compensation Committee provides in the Award agreement governing the SAR. The Amended LTIP prohibits the Company from repricing SARs without the approval of the Company’s stockholders.

Restricted Stock Awards.

A Restricted Stock Award is a grant of shares of Common Stock subject to a risk of forfeiture, restrictions on transferability, and any other restrictions imposed by the Compensation Committee. Restrictions may lapse at such times and under such circumstances as determined by the Compensation Committee. Except as otherwise provided under the terms of the Amended LTIP or an Award agreement, the holder of a Restricted Stock Award will have rights to receive dividends on the Common Stock subject to the Restricted Stock Award (subject to any mandatory reinvestment or other requirements imposed by the Compensation Committee). Unless otherwise determined by the Compensation Committee, Common Stock distributed in connection with a stock split or stock dividend, and other property distributed as a dividend, will be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock Award with respect to which such Common Stock or other property has been distributed. During the restricted period applicable to the Restricted Stock Award, the restricted stock subject to the Restricted Stock Award may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Participant.

Restricted Stock Units.

RSUs are rights to receive Common Stock, cash, or a combination of both at the end of a specified period. The Compensation Committee may subject RSUs to restrictions (which may include a risk of forfeiture) to be specified in the Award agreement, and those restrictions may lapse at such times determined by the Compensation Committee. RSUs may be satisfied by delivery of Common Stock, cash equal to the fair market value of the specified number of shares of Common Stock covered by the RSUs, or any combination thereof determined by the Compensation Committee at the date of grant or thereafter.

Stock Awards.

The Compensation Committee is authorized to grant Stock Awards under the Amended LTIP to any Eligible Person as a bonus, as additional compensation, or in lieu of cash or other compensation the individual is otherwise entitled to receive, in such amounts and subject to such other terms as the Compensation Committee determines to be appropriate.

Dividend Equivalents.

Dividend Equivalents may be granted to an Eligible Person, entitling such Eligible Person to receive cash, stock, other Awards, or other property equal in value to dividends paid with respect to a specified number of shares of Common Stock or other periodic payments. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award (other than a Restricted Stock Award or a Stock Award). Dividend Equivalents

may be paid or distributed when accrued or reinvested in additional shares of Common Stock, Awards, or other investment vehicles, and subject to such restrictions on transferability and risks of forfeiture, as the Compensation Committee may specify.

Dividend Equivalents granted in connection with another Award will be subject to the same restrictions and risk of forfeiture as the underlying Award and will not be paid unless and until such Award has vested and been earned (absent a contrary provision in the applicable Award agreement).

Other Stock-Based Awards.

Eligible Persons may be granted, subject to applicable legal limitations, other Awards related to Common Stock (in terms of being valued, denominated, paid or otherwise defined by reference to Common Stock). Such Other Stock-Based Awards may include, but are not limited to, convertible or exchangeable debt securities, other rights convertible or exchangeable into Common Stock, purchase rights for Common Stock, Awards with value and payment contingent upon performance of the Company or any other factors designated by the Compensation Committee, and Awards valued by reference to the book value of Common Stock or the value of securities of or the performance of specified Subsidiaries. The Compensation Committee will determine the terms and conditions of all such Other Stock-Based Awards, including without limitation, the method of delivery, consideration to be paid, the timing and methods of payment, and any performance criteria associated with an Award.

Cash Awards.

The Compensation Committee is authorized to grant Cash Awards, on a free-standing basis or as an element of or supplement to, or in lieu of, any other Award to Eligible Persons in such amounts and subject to such other terms (including the achievement of performance goals and/or future service requirements) as the Compensation Committee in its discretion determines.

Substitute Awards.

Awards may be granted under the Amended LTIP in substitution for similar awards held by individuals who become Eligible Persons as a result of the merger, consolidation, or acquisition of another entity or the assets of another entity by or with the Company or an affiliate of the Company. Such Conversion Awards that are Options or SARs may have an exercise price that is less than the fair market value of a share of stock on the date of the substitution if such substitution complies with the requirements of Section 409A of the Code and other applicable laws and exchange rules.

Performance Awards.

The Compensation Committee may designate that any Award granted under the Amended LTIP will constitute a Performance Award. A Performance Award is any Award, the grant, exercise, vesting, or settlement of which is subject to one or more performance conditions. The performance period applicable to any Performance Award will be set by the Compensation Committee but will not exceed 10 years.

One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified Subsidiaries or business or geographical units of the Company (except with respect to the total shareholder return and earnings per share criteria) may be used by the Compensation Committee in establishing performance goals applicable to Performance Awards: (1) earnings per share; (2) revenues; (3) cash flow; (4) cash flow from operations; (5) cash flow return; (6) return on net assets; (7) return on assets; (8) return

on investment; (9) return on capital; (10) return on equity; (11) economic value added; (12) operating margin; (13) contribution margin; (14) net income; (15) net income per share; (16) earnings; (17) earnings before interest, depreciation and amortization; (18) operating earnings after interest expense and before incentives, service fees, and extraordinary or special items; (19) total stockholder return; (20) debt reduction or management; (21) market share; (22) change in the fair market value of the Common Stock; (23) operating income; (2) share price; (25) effective equipment utilization; (26) achievement of savings from business improvement projects; (27) capital projects deliverables; (28) performance against environmental targets; (29) safety performance and/or incident rate; (30) human resources management targets, including medical cost reductions and time to hire; and (31) satisfactory internal or external audits.

Any of the above goals may be determined pre-tax or post-tax, on an absolute or relative basis, as compared to the performance of a published or special index deemed applicable by the Compensation Committee including, but not limited to, the S&P 500 or a group of comparable companies. The terms are used as applied under generally accepted accounting principles, as applicable.

The Compensation Committee may provide for the manner in which actual performance and performance goals with regard to the business criteria selected will reflect the impact of specified events during the relevant performance period, which may mean excluding the impact of any or all of the following events or occurrences for such performance period: (a) asset write-downs or impairments to assets; (b) litigation, claims, judgments or settlements; (c) the effect of changes in tax law or other such laws or regulations affecting reported results; (d) accruals for reorganization and restructuring programs; (e) any unusual or infrequent items as described in the Accounting Standards Codification Topic 225, as may be amended or superseded from time to time; (f) any change in accounting principles as defined in the Accounting Standards Codification Topic 250, as may be amended or superseded from time to time; (g) any loss from a discontinued operation as described in the Accounting Standards Codification Topic 360, as may be amended or superseded from time to time; (h) goodwill impairment charges; (i) operating results for any business acquired during the calendar year; (j) third party expenses associated with any investment or acquisition by the Company or any Subsidiary; (k) any amounts accrued by the Company or its Subsidiaries pursuant to management bonus plans or cash profit sharing plans and related employer payroll taxes for the fiscal year; (l) any discretionary or matching contributions made to a savings and deferred profit-sharing plan or deferred compensation plan for the fiscal year; (m) interest, expenses, taxes, depreciation and depletion, amortization and accretion charges; and (n) marked-to-market adjustments for financial instruments.

Other Provisions

Tax Withholding.

A Participant’s tax withholding obligations with respect to an Award may be satisfied by such means and subject to such conditions as the Compensation Committee may determine, including, without limitation, the delivery of cash or cash equivalents, stock (including previously owned shares, net settlement, a broker-assisted sale, or other cashless withholding or reduction of the amount of shares otherwise issuable or delivered pursuant to the Award), other property, or any other legal consideration the Compensation Committee deems appropriate.

Subdivision or Consolidation of Shares.

If the Company subdivides as a whole (by reclassification, stock split, stock distribution, or otherwise) the number of shares then outstanding into a greater number of shares or if the Company distributes an extraordinary cash dividend, or if the Company consolidates as a whole (by reclassification, reverse stock split, or otherwise) the number of shares then outstanding into a lesser number of shares, then, as the Compensation Committee determines appropriate, (i) the maximum number of shares available for issuance under the Amended LTIP or in connection with Awards (including any per person Award limits) will be adjusted proportionately, (ii) the number of shares subject to outstanding Awards will be adjusted proportionately, and (iii)  the price, including the exercise or grant price, for any outstanding Awards will be adjusted proportionately.

Recapitalization

If the Company recapitalizes, reclassifies its stock, or otherwise changes its capital structure without the occurrence of a Change of Control, the number and class of shares covered by an outstanding Award will be adjusted so that the Award covers the number and class of shares of stock and securities to which the holder would have been entitled pursuant to the terms of the recapitalization and the share limitations under the Amended LTIP, including the per person limits, will be adjusted in a manner consistent with the recapitalization, in each case as determined by the Compensation Committee.

Change of Control.

Upon a Change of Control, the Compensation Committee may, but will not be required to, take any one or more of the following actions with respect to outstanding Awards, which actions may vary among individual holders and individual Awards, and which actions may be taken without Participant consent or approval: (i) remove any applicable forfeiture restrictions, (ii) accelerate in whole or in part the time of exercisability so that the Award may be exercised for a limited period of time on or before a date specified by the Compensation Committee, before or after the Change of Control, after which date all unexercised Awards will terminate, (iii) provide for a cash payment with respect to the Award by requiring the mandatory surrender of some or all of the Award as of a specified date (irrespective of whether the Award is then vested or exercisable under the Amended LTIP), in which event the Committee will cancel the Award and pay to the holder an amount of cash (or other consideration including securities or other property) per Award equal to the Change of Control Price (less any applicable exercise price or grant price), provided that if the exercise price of an Option or an SAR exceeds the Change of Control Price, the award may be canceled for no consideration; (iv) cancel any Award that remains subject to a restricted period as of the date of a Change of Control without payment of any consideration to the holder, or (v) make such other adjustments to Awards then outstanding as the Compensation Committee deems appropriate to reflect the Change of Control, including the substitution, assumption, or continuation of Awards by the successor or a parent or subsidiary thereof.

Effect of Termination of Employment or Director Service.

Except as otherwise provided in the Amended LTIP, the treatment of an Award upon a termination of employment or any other service relationship of a Participant with the Company or a Subsidiary will be determined by the Compensation Committee and specified in the applicable Award agreement.

Term of the Amended LTIP.

No Awards may be granted under the Amended LTIP on and after the 10th anniversary of its effective date.

Amendment.

Our Board may amend, alter, suspend, discontinue, or terminate the Amended LTIP or the Compensation Committee’s authority to grant Awards under the Amended LTIP without the consent of the Company stockholders or Participants, except (i) any amendment or alteration, including any increase in any share limitation, will be subject to the stockholder approval not later than the next annual meeting if such stockholder approval is required by any federal or state law or regulation or the rules of the NYSE and (ii) without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of the Participant under any previously granted and outstanding Award.

The Compensation Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue, or terminate any outstanding Award, except (i) as otherwise provided in the Amended LTIP and (ii) without the consent of the affected Participant, no such Committee action may materially and adversely affect the rights of the Participant under the Award.

Transferability of Awards.

Under the Amended LTIP, (i) each Option and SAR will be exercisable only by the Participant during the Participant’s lifetime or by the person to whom the Participant’s rights pass by will or the laws of descent and distribution and (ii) no Award (other than a Stock Award) and no rights under any such Award may be assigned, alienated, pledged, attached, sold, or otherwise transferred or encumbered by a Participant, except an Award may be transferred (a) by a Participant without consideration to immediate family members or related family trusts, limited partnerships, or similar entities if specifically permitted by the Compensation Committee or (b) pursuant to a valid domestic relations order. Notwithstanding any provision to the contrary, ISOs will not be transferable other than by will or the laws of descent and distribution.

No Repricing of Options or SARs.

Other than in connection with a change in capitalization or other transaction where an adjustment is permitted or required under the terms of the Amended LTIP, the Compensation Committee is prohibited from making any adjustment or approving any amendment that reduces or would have the effect of reducing the exercise price of an Option or SAR previously granted under the Amended LTIP, whether through amendment, cancellation and exchange for cash or replacement grants, unless the Company’s stockholders approve such adjustment or amendment.

Clawback.

The Amended LTIP is subject to any written clawback policies that the Company, with the approval of our Board, may adopt and determine should apply to the Amended LTIP, either before or after the plan’s effective date. Any such policy may subject a Participant’s Awards and amounts paid or realized with respect to such Awards to reduction, cancelation, forfeiture, or recoupment if certain specified events or wrongful conduct occur, including 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.

Certain United States Federal Income Tax Aspects

The following discussion is for general information only and is intended to summarize briefly the U.S. federal income tax consequences of certain transactions contemplated under the Amended LTIP. This description is based on current laws, regulations, and rules in effect on the record date, which are subject to change (possibly retroactively). The tax treatment of Participants may vary depending on each Participant’s particular situation and may, therefore, be subject to special rules not discussed below. No attempt has been made to discuss any potential foreign, state or local tax consequences. Participants are advised to consult with a tax advisor concerning the specific tax consequences of participating in the Amended LTIP.

Tax Consequences to Participants under the Amended LTIP

Options and SARs.

Participants will not realize taxable income upon the grant of an Option or a SAR. Upon the exercise of a Nonstatutory Option or a SAR, a Participant will recognize ordinary compensation income (subject to withholding if the Participant is an employee) in an amount equal to the excess of (i) the amount of cash and the fair market value of the Common Stock received, over (ii) the exercise or grant price of the Award. A Participant will generally have a tax basis in any shares of Common Stock received pursuant to the exercise of a Nonstatutory Option or a SAR that equals the fair market value of such shares on the date of exercise. The Company generally will be entitled to a deduction for federal income tax purposes that corresponds as to timing and amount with the compensation income recognized by a Participant under the foregoing rules. When a Participant sells the Common Stock acquired as a result of the exercise of a Nonstatutory Option or a SAR, any appreciation (or depreciation) in the value of the Common Stock after the exercise date is treated as long- or short-term capital gain (or loss) for federal income tax purposes, depending on the holding period. The Common Stock must be held for more than 12 months to qualify for long-term capital gain treatment.

Participants who receive an ISO will not recognize taxable income on the grant of the ISO. Upon the exercise of an ISO, a Participant will not recognize taxable income, although the excess of the fair market value of the shares of Common Stock received upon exercise of the ISO (“ISO Stock”) over the exercise price will increase the alternative minimum taxable income of the Participant, which may cause such Participant to incur alternative minimum tax. The payment of any alternative minimum tax attributable to the exercise of an ISO would be allowed as a credit against the Participant’s regular tax liability in a later year to the extent the Participant’s regular tax liability is in excess of the alternative minimum tax for that year.

Upon the disposition of ISO Stock that has been held for the required holding period (generally, at least two years from the date of grant and one year from the date of exercise of the ISO), a Participant will generally recognize capital gain (or loss) equal to the excess (or shortfall) of the amount received in the disposition over the exercise price paid by the Participant for the ISO Stock. However, if a Participant disposes of ISO Stock that has not been held for the requisite holding period (a “Disqualifying Disposition”), the Participant will recognize ordinary compensation income in the year of the Disqualifying Disposition in an amount equal to the amount by which the fair market value of the ISO Stock at the time of exercise of the ISO (or, if less, the amount realized in the case of an arm’s length disposition to an unrelated party) exceeds the

exercise price paid by the Participant for such ISO Stock. A Participant would also recognize capital gain to the extent the amount realized in the Disqualifying Disposition exceeds the fair market value of the ISO Stock on the exercise date. If the exercise price paid for the ISO Stock exceeds the amount realized (in the case of an arm’s-length disposition to an unrelated party), such excess would ordinarily constitute a capital loss.

The Company will generally not be entitled to any federal income tax deduction upon the grant or exercise of an ISO, unless a Participant makes a Disqualifying Disposition of the ISO Stock. If a Participant makes a Disqualifying Disposition, the Company generally will be entitled to a tax deduction that corresponds as to timing and amount with the compensation income recognized by the Participant under the rules described in the preceding paragraph.

Other Awards.

A Participant will recognize ordinary compensation income upon receipt of cash pursuant to a Cash Award or, if earlier, at the time the cash is otherwise made available for the Participant to draw upon. An individual will not have taxable income at the time of grant of a RSU, but rather, will generally recognize ordinary compensation income at the time he or she receives cash or shares of Common Stock in settlement of the RSU award, as applicable, in an amount equal to the cash or the fair market value of the Common Stock received. The Dividend Equivalents, if any, received with respect to a RSU or other Award will be taxable as ordinary compensation income, not dividend income, when paid.

A recipient of a Restricted Stock Award or Stock Award generally will be subject to tax at ordinary income tax rates on the fair market value of the Common Stock when it is received, reduced by any amount paid by the recipient; however, if the Common Stock is not transferable and is subject to a substantial risk of forfeiture when received, a Participant will recognize ordinary compensation income in an amount equal to the fair market value of the Common Stock (i) when the Common Stock first becomes transferable or is no longer subject to a substantial risk of forfeiture, in cases where a Participant does not make a valid election under Section 83(b) of the Code, or (ii) when the Award is received, in cases where a Participant makes a valid election under Section 83(b) of the Code. If a Section 83(b) election is made and the shares are subsequently forfeited, the recipient will not be allowed to take a deduction for the value of the forfeited shares. If a Section 83(b) election has not been made, any dividends received with respect to Restricted Stock that is subject at that time to a risk of forfeiture or restrictions on transfer generally will be treated as compensation that is taxable as ordinary income to the recipient; otherwise the dividends will be treated as dividends.

A Participant who is an employee will be subject to withholding for federal, and generally for state and local, income taxes at the time he or she recognizes income under the rules described above. The tax basis in the Common Stock received by a Participant will equal the amount recognized by him or her as compensation income under the rules described in the preceding paragraph, and the Participant’s capital gains holding period in those shares will commence on the later of the date the shares are received or the restrictions lapse. The Company generally will be entitled to a deduction for federal income tax purposes that corresponds as to timing and amount with the compensation income recognized by a Participant under the foregoing rules.

Internal Revenue Code Section 409A.

Awards under the Amended LTIP are generally intended to be designed, granted, and administered in a manner that is either exempt from the application of or complies with the requirements of Section 409A of the Code in an effort to avoid the imposition of taxes and/or penalties. To the extent that payment of an Award under the Amended LTIP is subject to additional taxes and interest under Section 409A, receipt of payments or benefits under such Award will, to the extent possible, be modified to comply with such requirements.

Golden Parachute Payments.

The ability of the Company (or the ability of one of our Subsidiaries) to obtain a deduction for future payments under the Amended LTIP could also be limited by the golden parachute rules of Section 280G of the Code, which prevent the deductibility of certain excess parachute payments made in connection with a change in control of an employer-corporation.

Section 162(m)

The ability of the Company (or the ability of one of our Subsidiaries) to obtain a deduction for amounts paid under the Amended LTIP could be limited by Section 162(m) of the Code. Section 162(m) limits our ability to deduct compensation, for federal income tax purposes, paid during any year to certain “covered employees” in excess of $1,000,000.

THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF UNITED STATES FEDERAL INCOME TAXATION WITH RESPECT TO THE GRANT, EXERCISE, VESTING, AND/OR SETTLEMENT OF AWARDS UNDER THE AMENDED LTIP. IT IS NOT AND DOES NOT PURPORT TO BE COMPLETE AND DOES NOT DISCUSS THE TAX CONSEQUENCES OF A PARTICIPANT’S DEATH OR THE PROVISIONS OF THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH ANY ELIGIBLE PARTICIPANT MAY RESIDE.

New Plan Benefits

No awards under the Amended LTIP have been granted to date.  Because future awards under the Amended LTIP will be granted in the discretion of the Compensation Committee, the type, number, recipients, and other terms of such awards cannot be determined at this time.

Vote Required for Approval

The affirmative vote of holders of at least a majority of the votes cast on this proposal is required to approve the Amended LTIP. Brokers do not have discretionary authority to vote on this proposal. Failure to vote by proxy or to vote in person at the special meeting, an abstention from voting, or a broker non-vote will have no effect on the outcome of the vote on this proposal.

Equity Compensation Plan Information

The following table shows, as of December 31, 2020, information with respect to our equity compensation plans under which shares of Company common stock are authorized for issuance. 

Proposal 4 — Ratification of the Appointment of Ernst & Young LLP as the Independent Registered Public Accounting Firm for 2021

Proposal 5 — Advisory Vote to Approve Named Executive Officer Compensation

Corporate Governance

Corporate Governance

Corporate Governance