LSB INDUSTRIES, INC. 8-K

What Happened
LSB Industries (LXU) announced on Feb. 4, 2026 that its Compensation Committee adopted a new form of restricted stock unit award agreement under the 2025 Long‑Term Incentive Plan and approved the 2026 annual LTIP grants for named executive officers. Grants include time‑based RSUs (TRSUs) vesting ratably over three years and performance‑based RSUs (PRSUs) earned over a three‑year performance period (Jan. 1 of grant year through Dec. 31 of the third year). The company also filed a Feb. 10, 2026 side letter with CEO Mark T. Behrman that amends his outstanding equity awards to add a “qualifying retirement” provision that accelerates vesting for TRSUs and PRSUs under specified conditions.

Key Details

• CEO grant: Mark T. Behrman received 153,604 TRSUs and 153,604 PRSUs in the 2026 awards. Other named grants include Cheryl Maguire (29,462 TRSUs / 29,462 PRSUs) and Michael Foster (26,545 / 26,545).
• Performance mechanics: PRSUs use a three‑year Performance Period with annual assessments. For the first Covered Year the metric is return on net assets; annual payouts range from 50% (threshold) to 200% (maximum) of target with straight‑line interpolation. Annual payout percentages are averaged across the three Covered Years.
• TSR modifier: The averaged PRSU payout is then adjusted by a relative total shareholder return (TSR) modifier measured vs. a defined peer group over the full three years; TSR modifier ranges 80%–120% (linear), but is capped at target if the company’s absolute TSR is negative.
• Accelerated vesting: PRSUs and TRSUs may accelerate upon Change in Control, termination without Cause, resignation for Good Reason, qualifying retirement, death, or total and permanent disability. The CEO Side Letter defines qualifying retirement as voluntary retirement at/after age 63 with ≥5 years’ service, more than one year post‑grant, and no cause-based termination finding; upon qualifying retirement CEO awards vest fully (TRSUs) and PRSUs vest at the greater of target or actual performance through retirement.

Why It Matters
These actions update executive pay mechanics and tie a substantial portion of 2026 equity awards to multi‑year operational performance (return on net assets) and relative TSR versus peers. For investors, that means management incentives are linked to both internal returns and shareholder return versus peers, which can align interests but also affect dilution if awards vest. The CEO’s side letter reduces forfeiture risk on retirement (accelerated vesting), which could lead to earlier issuance of shares if he meets the qualifying‑retirement tests. Watch future proxy disclosures for the TSR peer group, specific performance targets, and aggregate potential dilution from these awards.