UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
LSB CORPORATION
(Exact name of registrant as
specified in its charter)
Massachusetts
(State or other jurisdiction of
incorporation or organization)
04-3557612
(I.R.S. Employer Identification
No.)
30 Massachusetts
Avenue
North Andover, Massachusetts
01845
(978) 725-7500
(Address, including zip code,
and telephone number of registrants principal executive
offices)
Gerald T. Mulligan
President and Chief Executive
Officer
LSB Corporation
30 Massachusetts
Avenue
North Andover, Massachusetts
01845
(978) 725-7500
(Name, address, including zip
code, and telephone number, including area code, of agent for
service)
Copy to:
Michael K.
Krebs, Esq.
Nutter McClennen & Fish
LLP
155 Seaport Boulevard
Boston, MA 02210
(617) 439-2000
Approximate date of commencement of proposed sale to the
public:
From time to time on or after the
effective date of this Registration Statement
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box:
þ
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box:
o
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering.
o
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering.
o
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following
box.
o
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed
to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box.
o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in Rule
12b-2
of the
Exchange Act. (Check one):
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Large
accelerated
filer
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Accelerated
filer
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Non-accelerated
filer
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Smaller reporting
company
þ
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(Do not check if a smaller
reporting company)
CALCULATION
OF REGISTRATION FEE
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Proposed Maximum
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Proposed Maximum
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Amount of
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Title of Each Class of
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Amount to be
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Offering
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Aggregate
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Registration
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Securities to be Registered(1)
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Registered(2)
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Price Per Share(3)
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Offering Price(3)
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Fee
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Common Stock, par value $.10 per share
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400,000
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$9.65
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$3,860,000
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$215.39
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(1)
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The rights are attached to the
Common Stock and are issued pursuant to the terms of the
registrants Renewed Rights Agreement dated effective
December 19, 2006, as amended. Until the occurrence of
certain events, the rights will not be exercisable and will be
transferable with and only with the Common Stock. Because no
separate consideration is to be paid for the rights, the
registration fee for the rights is included in the registration
fee for the Common Stock.
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(2)
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Pursuant to Rule 416(a), this
registration statement also registers an indeterminate number of
additional shares of common stock as may be issued with respect
to the shares registered hereunder from time to time as a result
of stock splits, stock dividends or similar transactions.
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(3)
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Estimated solely for the purpose of
calculating the registration fee in accordance with
Rule 457(c) under the Securities Act of 1933 based upon the
average of the high and low sale prices reported on The Nasdaq
National Market on May 28, 2009.
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PROSPECTUS
LSB
CORPORATION
DIVIDEND
REINVESTMENT AND COMMON STOCK PURCHASE PLAN
We are offering 400,000 shares of our common stock to our
stockholders through our Dividend Reinvestment and Common Stock
Purchase Plan (the Plan). The Plan provides you with
an economical and convenient way to purchase shares of our
common stock. Our stock is traded on the Nasdaq Global Market
under the symbol LSBX. Prices of the common stock
are reported in
The Wall Street Journal
as LSB
Corp.
The Plan is open only to stockholders of record of our common
stock.
Some of the significant features of the Plan are:
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You may purchase shares of common stock by automatically
reinvesting all or a portion of your cash dividends received on
our common stock.
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You may also purchase additional shares of common stock at
current market prices by making optional cash payments of $50 to
$10,000 each month. Optional cash payments may be made by check
or money order.
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You can decide whether or not to participate in the Plan, and
you may terminate your participation at any time.
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The Plan Administrator is Computershare Trust Company, N.A.
Plan participants may access the Plans features through
the Administrators Internet website at
www.computershare.com/investor
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The Plan Administrator will purchase shares of our common stock
under the Plan directly from us, in the open market, in
privately negotiated transactions with third parties, or in a
combination of any of the above. The Company will elect from
time to time whether to sell shares of common stock under the
Plan.
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Except in the case where shares of common stock are purchased
under the Plan pursuant to the Companys waiver of the
$10,000 limit on optional share purchases, the purchase price
for shares of common stock that you purchase through the Plan
will be:
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the average closing market price of the Companys common
stock as quoted on The Nasdaq Global Market on the three
(3) trading days immediately preceding the applicable
monthly investment date, for shares of common stock that you
purchase through the Plan directly from us; and
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the weighted average price per share that the Plan Administrator
paid for all common stock purchased for the applicable monthly
investment date, for shares of common stock that you purchase
through the Plan that are acquired in the open market or in
privately negotiated transactions with third parties.
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When shares of common stock are purchased under the Plan
pursuant to the Companys waiver of the $10,000 limit on
optional share purchases, the purchase price to you for shares
of common stock that you purchase through the Plan will be equal
to the average closing market price of LSBs common stock
as quoted on The Nasdaq Global Market for each trading day
during the pricing period, as described in more detail elsewhere
in this prospectus. See
The Plan Question
16 What is the price I will pay and what will be the
investment date for cash investments of more than $10,000?
below.
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Investing in our common stock involves risks. You should read
the section titled Risk Factors beginning on
page 3 before enrolling in the Plan or purchasing any
shares of our common stock.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal
offense.
The date of this prospectus is June 2, 2009.
SUMMARY
About LSB
Corporation
LSB Corporation (LSB, the Company or
us) is a one bank-holding company principally
conducting business through its subsidiary, River Bank (the
Bank). The Companys common stock is currently
traded on the Nasdaq Global Market under the symbol
LSBX. Prices of the common stock are reported in
The Wall Street Journal
as LSB Corp.
The Bank is a Massachusetts-chartered savings bank that was
established in 1868 and converted from mutual to stock form in
1986.
Additional information regarding the Company, including our
audited financial statements and a more detailed description of
the Company and the Bank, is contained in the documents
incorporated by reference in this prospectus. See Where
you can find more information and Incorporation of
certain documents by reference on page 24.
About the
Plan
The following summary of our Dividend Reinvestment and Common
Stock Purchase Plan does not include all of the information that
may be important to you. You should carefully read the entire
text of the Plan contained in this prospectus before you decide
to participate in the Plan.
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ELIGIBILITY AND ENROLLMENT:
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You can participate in the Plan if you currently own shares of
Company common stock by submitting a completed Enrollment
Application. You may obtain an Enrollment Application from the
Plan Administrator. You may participate directly in the Plan
only if you hold your common stock in your own name.
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REINVESTMENT OF DIVIDENDS:
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You can reinvest all cash dividends you receive on all of your
shares of our common stock. Alternatively, you may elect to
reinvest all of the dividends you receive on a specified number
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of your shares. You will be able to purchase additional shares
of common stock by reinvesting your dividends, without paying
fees.
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OPTIONAL CASH INVESTMENTS:
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After you enroll in the Plan, you can buy additional shares of
common stock without paying fees. You can invest a minimum of
$50 and up to a maximum of $10,000 each calendar month. You must
reinvest a portion of your cash dividends through the Plan in
order to exercise the optional cash investment feature.
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The Company expects that it will waive from time to time the
maximum optional purchase limit. See
The
Plan Question 16 What is the price I
will pay and what will be the investment date for
cash
investments of more than $10,000?
below.
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SOURCE OF SHARES:
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The administrator of the Plan will purchase shares of common
stock in one of four ways:
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directly from us;
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in the open market;
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in privately negotiated transactions
with third parties; or
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a combination of any of the above.
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PURCHASE PRICE:
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The purchase price of shares of common stock under the Plan
depends on whether the Plan Administrator purchases shares
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directly from us, in the open market or in privately negotiated
transactions with third parties.
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For shares purchased directly from us,
the price you pay will be the average of the closing bid prices
for our common stock as quoted through The Nasdaq National
Market for the three trading days immediately preceding the
monthly investment date.
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For shares purchased in the open market
or in privately negotiated transactions with third parties, the
price you pay will be the weighted average of the actual prices
the Plan Administrator pays for all of the common stock
purchased for the applicable monthly investment date.
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For shares purchased through a
combination of the above methods, the price you pay will be the
weighted average of the respective prices determined as set
forth above for all of the common stock purchased for the
applicable monthly investment date.
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TRACKING YOUR INVESTMENT:
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You will receive periodic statements of the transactions made in
your Plan account. These statements will provide you with details
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of the transactions and will indicate the common share balance
in your Plan account.
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ADMINISTRATION:
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Computershare Trust Company, N.A. serves as the
administrator of the Plan. You can contact the Plan
Administrator as follows:
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Telephone:
(800) 254-5196
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Internet:
www.computershare.com/investor
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Mail: Computershare Trust Company,
N.A.
P.O. Box 43078
Providence, RI
02940-3078
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CONTACTING US:
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You can write to us at the following address:
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LSB Corporation
Investor Relations
30 Massachusetts Avenue
North Andover, MA
01845-3460
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You can also telephone Cynthia J. Milne of the Investor
Relations Department at
(978) 725-7553.
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2
RISK
FACTORS
Certain risks involved in investing in the common stock
offered under this prospectus are described below. You should
carefully consider each of the following factors and all of the
information both in this prospectus and in the other documents
we have filed with the SEC, including those that are
incorporated in this prospectus by reference. See Where
You Can Find More Information and Incorporation of
Certain Documents by Reference.
Changes in interest rates could adversely impact the
Companys financial condition and results of
operations.
The Companys ability to make a
profit, like that of most financial institutions, substantially
depends upon its net interest income, which is the difference
between the interest income earned on interest earning assets,
such as loans and investment securities, and the interest
expense paid on interest-bearing liabilities, such as deposits
and borrowings. However, certain assets and liabilities may
react differently to changes in market interest rates. Further,
interest rates on some types of assets and liabilities may
fluctuate prior to changes in broader market interest rates,
while rates on other types of assets may lag behind.
Additionally, some assets such as adjustable-rate mortgages have
features and rate caps which restrict changes in their interest
rates.
Factors such as inflation, recession, unemployment, fluctuations
in the money supply, global disorder such as that experienced as
a result of the terrorist activity on September 11, 2001,
instability in domestic and foreign financial markets, and other
factors beyond the Companys control may affect interest
rates. Changes in market interest rates will also affect the
level of voluntary prepayments on loans and the receipt of
payments on mortgage-backed securities, resulting in the receipt
of proceeds that may have to be reinvested at a lower rate than
the loan or mortgage-backed security being prepaid. Although the
Company pursues an asset-liability management strategy designed
to control its risk from changes in market interest rates,
changes in interest rates can still have a material adverse
effect on the Companys business, financial condition,
results of operations and cash flows. For example, if rates paid
on deposits and borrowings reprice more quickly than the assets
in a rising interest rate environment, the Company would
experience a compression of its net interest spread and net
interest margin. Alternatively, in a declining interest rate
environment, if assets reprice more quickly than its
liabilities, net interest margin compression would occur.
If the Company has higher loan losses than it has allowed
for, its earnings could materially decrease.
The
Companys loan customers may not repay loans according to
their terms, and the collateral securing the payment of loans
may be insufficient to assure repayment. The Company may
therefore experience significant credit losses which could have
a material adverse effect on its operating results. The Company
makes various assumptions and judgments about the collectibility
of its loan portfolio, including the creditworthiness of
borrowers and the value of the real estate and other assets
serving as collateral for the repayment of loans. In determining
the size of the allowance for loan losses, the Company relies on
its experience and its evaluation of economic conditions. If one
or more of the assumptions prove to be incorrect, its current
allowance for loan losses may not be sufficient to cover losses
inherent in its loan portfolio and adjustment may be necessary
to allow for different economic conditions or adverse
developments in its loan portfolio. Consequently, a problem with
one or more loans could require the Company to significantly
increase the level of its provision for loan losses. In
addition, federal and state regulators periodically review the
Companys allowance for loan losses and may require it to
increase its provision for loan losses or recognize further loan
charge-offs. Material additions to the allowance would
materially reduce the Companys net income and could
adversely affect its financial condition. Moreover, when a loan
is placed on non-accrual status, all interest previously accrued
but not collected is reversed against current period interest
income.
A significant amount of the Companys loans are
concentrated in northeastern Massachusetts and southern New
Hampshire, and adverse conditions in this area could negatively
impact its operations.
Substantially all of the
loans the Company originates are secured by properties located
in or are made to businesses which operate in northeastern
Massachusetts or southern New Hampshire. Because of the current
concentration of the Companys loan origination activities
in northeastern Massachusetts and southern New Hampshire,
in the event of adverse economic conditions, downward pressure
on housing prices, political or business developments or natural
hazards adversely affecting northeastern Massachusetts or
southern
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New Hampshire and the ability of property owners and
businesses in that area to make payments of principal and
interest on the underlying loans, could cause the Company to
experience higher rates of loss and delinquency on its loans
than if its loans were more geographically diversified.
Additionally, a decline in real estate values generally, or in
northeastern Massachusetts and southern New Hampshire
specifically, could cause some of our real estate loans to
become inadequately collateralized, which would expose the
Company to a greater risk of loss. Additionally, a decline in
real estate values could result in a decline in the origination
of such loans. Such higher rates of loss and delinquency and
declines in real estate values could have a material adverse
effect on the Companys results of operations or financial
condition.
The Company operates in a highly regulated environment and
may be adversely impacted by changes in law and
regulations.
The Company is subject to extensive
regulation, supervision and examination. Due to the current
economic climate, we may face increased regulation of our
industry. Compliance with such regulation may increase our costs
and limit our ability to pursue business opportunities. Any
change in the laws or regulations or failure by the Company to
comply with applicable law and regulation, or change in
regulators supervisory policies or examination procedures,
whether by the Division, the FDIC, the FRB, other state or
federal regulators, the United States Congress, or the
Massachusetts legislature could have a material adverse effect
on the Companys business, financial condition, results of
operations, and cash flows.
The Companys FDIC premiums have materially increased
and could continue to do so, which could materially affect the
Companys earnings.
FDIC insurance premiums
would have been $230,000 in 2008, however the Company was able
to apply credits of $175,000 resulting in a net expense of
$55,000. In December, 2008, the FDIC board approved a
7 basis points (bps) increase in premiums
charged to banks for deposit insurance, boosting the rate to
between 12 cents and 50 cents per $100 of domestic deposits from
a range of five cents to 43 cents due to market developments
that have significantly depleted the insurance fund of the FDIC
and reduced the ratio of reserves to insured deposits. On
May 22, 2009, the FDIC adopted a final rule that allows it
to charge banks a special assessment of 5 bps on each
insured institutions assets minus Tier 1 capital as
of June 30, 2009, subject to certain limitations, to
replenish the deposit insurance fund. This special assessment
will be collected in the third quarter of 2009. Additionally,
beginning April 1, 2009, the FDIC increased its base fees
on insured deposits, the combination of which would increase the
Companys 2009 deposit insurance premiums to approximately
$1.2 million. There can be no assurance that the
Companys FDIC premiums will not increase further and, if
so, that its earnings would not materially decrease as a result.
The impact on the Company of recently enacted legislation, in
particular the Emergency Economic Stabilization Act of 2008 and
the American Recovery and Reinvestment Act of 2009 and their
implementing regulations as well as the Presidents
Financial Stability Plan, and the Companys participation
in programs thereunder, cannot be predicted at this
time.
Beginning in the fourth quarter of 2008,
the U.S. government has responded to the ongoing financial
crisis and economic slowdown by enacting new legislation and
expanding or establishing a number of programs and initiatives.
The Treasury, the FDIC and the Federal Reserve Board each have
developed programs and facilities, including the TARP Capital
Purchase Program and other efforts designed to increase
inter-bank lending, improve funding for consumer receivables and
restore consumer and counterparty confidence in the banking
sector. In addition, the ARRA is intended to expand and
establish government spending programs and provide tax cuts to
stimulate the economy. Congress and the U.S. government
continue to evaluate and develop various programs and
initiatives designed to stabilize the financial and housing
markets and stimulate the economy, including the Treasurys
recently announced Financial Stability Plan and the
governments recently announced foreclosure prevention
program. The Company has participated in the CPP, but has opted
not the participate in the FDICs Temporary Liquidity
Guarantee Program. The effects of participating or not
participating in any such programs and the extent of the
Companys participation in such programs cannot be
determined at this time.
The impact of further contemplated legislative and regulatory
changes cannot be predicted at this time.
The
Obama Administration and Congress are actively considering a
broad restructuring of the regulatory landscape for financial
institutions. On March 5, 2009, House Financial Services
Committee Chairman Barney Frank issued the following statement,
While we will continue to work with the Obama
Administration on stabilization, it is now essential that we
continue work on our reform agenda and address the need for
financial
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regulatory restructuring to diminish systemic risk and to
enhance market integrity. The Company cannot reliably
predict at this time whether any of these legislative
initiatives will be enacted, and if so, what impact, if any, it
would have on the Companys financial condition, operating
results or business.
The terms governing the issuance of the Preferred Stock to
the Treasury may be changed, the effect of which may have an
adverse effect on the Companys
operations.
The Securities Purchase Agreement
that the Company entered into with the Treasury provides that
the Treasury may unilaterally amend any provision of the
agreement to the extent required to comply with any change in
applicable federal statutes that may occur in the future. The
ARRA placed more stringent limits on executive compensation than
were applicable at the time the Company entered into the
Securities Purchase Agreement, including a prohibition on the
payment of bonuses and severance to certain officers and a
requirement that compensation paid to our executives be
presented annually to stockholders in a non-binding
vote. There can be no assurance that further changes in the
terms of the transaction will not occur in the future. Such
changes may place further restrictions on the Companys
business or results of operation, which may adversely affect the
market price of its common stock.
The Company has strong competition within its market area
which may limit the Companys growth and
profitability.
The Company faces significant
competition both in attracting deposits and in the origination
of loans. Commercial banks, credit unions, savings banks and
savings and loan associations operating in our primary market
area have historically provided most of our competition for
deposits. Mutual funds and internet-only bank providers
contribute additional competition in the quest for deposits.
Competition for the origination of real estate and other loans
comes from other commercial, savings and cooperative banks,
thrift institutions, insurance companies, finance companies,
other institutional lenders and mortgage companies.
The success of the Company is dependent on retaining certain
key personnel or attracting and retaining additional, qualified
personnel.
The Companys performance is
largely dependent on the talents and efforts of highly skilled
individuals. The Company relies on key personnel, including
executive officers, to manage and operate its business,
including major revenue generating functions such as loan and
deposit generation. The loss of key staff may adversely affect
the Companys ability to maintain and manage these
functions effectively, which could negatively affect the
Companys revenues. In addition, loss of key personnel
could result in increased recruiting and hiring expenses, which
could cause a decrease in the Companys net income. The
Companys continued ability to compete effectively depends
on its ability to attract new employees and to retain and
motivate its existing employees.
The limitations on executive compensation imposed through the
Companys participation in the Capital Purchase Program may
restrict its ability to attract, retain and motivate key
employees, which could adversely affect our
operations.
As part of the CPP transaction, the
Company agreed to be bound by certain executive compensation
restrictions, including limitations on severance payments and
the clawback of any bonus and incentive compensation that were
based on materially inaccurate financial statements or any other
materially inaccurate performance metric criteria. Subsequent to
the issuance of the Senior Preferred, the ARRA imposed more
stringent limitations on severance pay and the payment of
bonuses. To the extent that these compensation restrictions do
not permit the Company to provide a comprehensive compensation
package to our key employees that is competitive in its market
area, the Company may have difficulty in attracting, retaining
and motivating key employees, which could have an adverse effect
on the Companys results of operations.
The Company continues to encounter technological change, and
may have fewer resources than many of its larger competitors to
continue to invest in technological
improvements.
The financial services industry is
undergoing rapid technological changes, with frequent
introductions of new technology-driven products and services.
The effective use of technology increases efficiency and enables
financial institutions to serve their customers better and to
reduce costs. The Companys success will depend, in part,
upon its ability to address the needs of its customers by using
technology to provide products and services that will satisfy
customer demands for convenience, as well as to create
additional efficiencies in its operations. Many of the
Companys larger competitors have substantially greater
resources to invest in technological improvements. The Company
may not be able to effectively implement new technology-driven
products and services or be successful in marketing these
products and services to its customers.
5
The Company relies on dividends from the Bank for
substantially all of its revenue.
The Company is
a separate and distinct legal entity from the Bank. It receives
substantially all of its revenue from dividends paid by the
Bank. These dividends are the principal source of funds used to
pay dividends on the Companys common stock. Various
federal and state laws and regulations limit the amount of
dividends that the Bank may pay to the Company. If the Bank is
unable to pay dividends to the Company, then the Company will be
unable to pay its obligations or pay dividends on the
Companys common stock. The inability to receive dividends
from the Bank could have a material adverse effect on the
Companys business, financial condition, results of
operations and cash flow, and on the Companys ability to
pay dividends to its stockholders.
Market fluctuations and changes in interest rates have had,
and may continue to have, significant and negative effects on
the Companys investment portfolio and stockholders
equity.
The Companys results of operations
depend in part on the performance of its invested assets. The
Company had an investment portfolio with a fair value of
$249.9 million at March 31, 2009, that is subject to:
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market value risk, which is the risk that invested assets will
decrease in value due to a change in the prevailing market
yields on our investments, an unfavorable change in the
liquidity of an investment or an unfavorable change in the
financial prospects or a downgrade in the credit rating of the
issuer of an investment or one or more other factors;
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reinvestment risk, which is the risk that interest rates will
decline, an investment will be redeemed and the Company will not
be able to reinvest the proceeds in a comparable investment that
provides a yield equal to or greater than the investment which
was redeemed; and
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liquidity risk, which is the risk that the Company may have to
sell assets at an undesirable time
and/or
price
to provide funds for its business.
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If the Companys investment portfolio were to be impaired
by market or issuer-specific conditions to a substantial degree,
its liquidity, financial position and operating results could be
materially adversely affected.
Management may assess a decline in fair value as being
temporary when in fact it is
other-than-temporary
and, consequently, not charge the impairment to the
Companys earnings, which could have a significant impact
on its future operating results.
The carrying
values of investment securities available for sale are derived
from market prices supplied by the Companys investment
custodian or, when no price is provided by the custodian, from a
third party valuation. Fair value is based on quoted market
prices. Unrealized investment gains and losses on such
securities, to the extent that there is no
other-than-temporary impairment of value, are
credited or charged, net of any tax effect, to a separate
component of stockholders equity, known as net
accumulated other comprehensive income (loss), until
realized.
If a security is deemed other-than-temporarily impaired,
management would adjust the securitys cost basis to fair
value through a realized loss on the income statement. After a
security has been written down for an other-than-temporary
impairment, the new cost basis is used thereafter to determine
the amount of any unrealized holding gains and losses which are
credited or charged, net of any tax effect, to net accumulated
other comprehensive income (loss), until realized.
Management considers available evidence in evaluating whether
unrealized losses on individual securities are
other-than-temporary. This evaluation often involves estimating
the outcome of future events and judgment is required in
determining whether factors exist that indicate that an
impairment loss has been incurred at the date of the financial
statements. These factors are both subjective and objective and
include knowledge and experience about past and current events
and assumptions about future events. Managements knowledge
about past and current events regarding a security and its
issuer may be incomplete, or its assumptions about future events
regarding a security and its issue may prove to be incorrect.
Accordingly, there is a risk that management may assess a
decline in fair value as being temporary when in fact it is
other-than-temporary, or subsequent events occur that cause
management to conclude that a decline in fair value is other
than temporary, resulting in an impairment charge that could
have a significant impact on the Companys future operating
results and financial condition.
6
When the Company becomes subject to the full SEC requirements
under Section 404 of the Sarbanes-Oxley Act of 2002, it
will likely incur significant costs in connection with first
providing internal control reports.
Under current
SEC regulations, as a smaller reporting company
under the federal securities laws, the Company became subject to
the management reporting component for its year ended
December 31, 2007 and will become subject to the outside
auditors attestation component of Section 404 of the
Sarbanes-Oxley Act of 2002 for its year ending December 31,
2009. Section 404 requires that the Company prepare a
management report on its internal control over financial
reporting and obtain an attestation on that report from its
auditors in connection with its most recent consolidated
financial statements included with its annual report. During the
past several years, many SEC reporting companies have incurred
significant costs in connection with first providing internal
control reports. The Company will likely incur significant costs
in connection with obtaining the outside auditors
attestation report of the Companys internal control
reports. If the Company does incur such costs, the costs could
have an adverse effect on the Companys results of
operations.
When the Company becomes subject to the full SEC requirements
under Section 404 of the Sarbanes-Oxley Act of 2002, if its
internal control reports disclose significant deficiencies or
material weaknesses, its stockholders and lenders could lose
confidence in its financial reporting, which would likely harm
the trading price of its stock, its access to additional
capital, and its liquidity.
During the past
several years, various SEC reporting companies, when first
providing internal control reports, disclosed significant
deficiencies or material weaknesses in their internal control
over financial reporting. If the Companys internal control
reports disclose material weaknesses, the Companys
stockholders could lose confidence in its financial reporting,
which would likely harm the trading price of its stock, its
access to additional capital, and its liquidity.
If the Companys investment in the Federal Home Loan
Bank of Boston becomes impaired, its earnings and
stockholders equity could decrease.
The
Company is required to own common stock of the FHLBB to qualify
for membership in the Federal Home Loan Bank System and to be
eligible to borrow funds under the FHLBBs advance program.
The aggregate cost and fair value of the Companys FHLBB
common stock as of March 31, 2009 was $11.8 million
based on its cost. FHLBB common stock is not a marketable
security. On April 20, 2009, the FHLBB filed its Annual
Report on
Form 10-K,
which showed a net loss of $115.8 million for the year
ended December 31, 2008, primarily attributable to
$381.7 million in charges related to the
other-than-temporary impairment of certain private-label
mortgage-backed securities as of December 31, 2008.
Further, the FHLBB suspended dividends on its common stock for
the quarter ended December 31, 2008, and has disclosed
that, based on current information, dividend payments on its
common stock in 2009 are unlikely. These and other developments
could put into question whether the fair value of FHLBB common
stock owned by the Company was less than its carrying value.
Consequently, the Company believes that there is a risk that its
investment in FHLBB common stock could be deemed impaired at
some time in the future, and, if this occurs, it would cause the
Companys earnings and stockholders equity to
decrease by the amount of the impairment charge.
The tightening of available liquidity could limit the
Companys ability to replace deposits and fund loan demand,
which could adversely affect its earnings and capital
levels.
A tightening of the credit market and the
inability to obtain adequate money to replace deposits and fund
continued loan growth may negatively affect asset growth and
therefore, earnings capability and capital levels. In addition
to any deposit growth, maturity of investment securities and
loan payments, we rely on certain wholesale funding sources and
uncommitted FHLBB advances to fund loans and replace deposits.
In the event of a further downturn in the economy, these
additional funding sources could be negatively affected which
could limit the funds available to the Company. FHLBB has
publicly disclosed that, over time, current market trends may
have a negative impact on FHLBBs own liquidity. Further,
the twelve Federal Home Loan Banks are jointly and severally
liable for each others debt, which means that the
FHLBBs liquidity could be adversely affected by losses,
capital weaknesses or other financial problems at one or more of
other regional Federal Home Loan Banks. The Companys
liquidity position would be significantly constrained if we were
unable to access funds from the FHLBB or other funding sources.
7
FORWARD-LOOKING
STATEMENTS
Certain statements in this prospectus, or incorporated by
reference into this prospectus, are forward-looking statements
(within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities and Exchange Act of
1934 as amended) that are subject to risks and uncertainties.
Forward-looking statements include information concerning
possible or assumed future results of operations of the Company,
projected or anticipated benefits, or events related to other
future developments involving the Company or the industry in
which it operates. Also, when verbs in the present tense such as
believes, expects,
anticipates, continues,
attempts or similar expressions are used,
forward-looking statements are being made. For example, the
amounts of and statements regarding the adequacy of the
Companys provision and allowance for loan losses, which
reflect managements estimates of the likelihood and
magnitude of future losses in the loan portfolio of the
Companys subsidiary bank, are forward looking
statements. Investors should note that many factors, some
of which are discussed elsewhere in this document and in the
documents which we incorporate by reference, could affect the
future financial results of the Company and could cause results
to differ materially from those expressed or implied by these
forward-looking statements. Those factors include fluctuations
in interest rates, disruptions in credit markets, inflation,
changes in the regulatory environment, government regulations
and changes in regional and local economic conditions, including
changes in real estate conditions in the Companys lending
area and changes in loan defaults and charge-off rates, and
changes in the competitive environment in the geographic and
business areas in which the Company conducts its operations. As
a result of such risks and uncertainties, the Companys
actual results may differ materially from those expressed or
implied by such forward-looking statements. These risks and
others are described elsewhere in this prospectus, including
particularly under the caption Risk Factors. The
Company does not undertake, and specifically disclaims any
obligation to publicly release revisions to any such
forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the
date of such statements.
THE
PLAN
The text of the Dividend Reinvestment and Common Stock Purchase
Plan of LSB Corporation (the Plan) is set forth
below in its entirety. The Plan is written in a simple question
and answer format. We expect to continue to pay quarterly
dividends on shares of our common stock in the future. We cannot
assure you, however, that we will definitely pay dividends in
the future. If you are a stockholder and do not participate in
this Plan, you will continue to receive cash dividends, if and
as declared, in the usual manner as we declare and pay them.
The Plan is designed for long-term investors who wish to invest
and build their share ownership over time. The Plan is not
intended to provide holders of shares of common stock with a
mechanism for generating assured short-term profits through
rapid turnover of shares acquired at a discount. The Plans
intended purpose precludes any person, organization or other
entity from establishing a series of related accounts for the
purpose of conducting arbitrage operations
and/or
exceeding the optional monthly cash investment limit. We
accordingly reserve the right to modify, suspend or terminate
participation by a stockholder who is using the Plan for
purposes inconsistent with its intended purpose.
Purpose
1.
What
is the purpose of the Plan?
The purpose of the Plan is to provide owners of our common stock
with a convenient and economical method to invest cash dividends
paid on shares of LSB common stock, as well as optional cash
payments, in additional shares of LSB common stock, without
payment of any brokerage commission or service charge.
8
Advantages
and Disadvantages
2. What
are the advantages of the Plan?
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You can reinvest cash dividends paid on your shares of common
stock in additional shares automatically.
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You may purchase additional shares of common stock by making
optional cash payments of at least $50 and not exceeding $10,000
per calendar month. As more fully explained in Questions 15 and
16 below, optional cash payments may be made by check or direct
debit from a U.S. bank account.
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You will not pay any commission or service charge in connection
with purchases under the Plan.
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Full investment of dividends is possible under the Plan because
the Plan permits fractions of shares, as well as full shares, to
be credited to your account. In addition, dividends on fractions
of shares, as well as full shares, in your Plan account will be
credited to such account.
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The Plan provides for simplified record keeping and regular
statements of account for shares credited under the Plan.
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You can deposit your stock certificate(s) representing shares of
our common stock for safekeeping with the Plan Administrator.
See
Question 20 What is safekeeping of
certificates and how do I submit my certificates?
below for more information.
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Shares held in your Plan account may be sold directly without
the issuance of physical certificates or the involvement of a
broker.
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You may deposit some or all of the shares of LSB common stock
currently held by you in stock certificate form into your Plan
account for safekeeping or for sale.
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You may withdraw some or all of your shares held in your Plan
account and request to receive a certificate at any time.
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Unless you are participating through your bank, broker or
nominee, you can execute many of your Plan transactions online
via the Plan Administrators website at
www.computershare.com/investor
. The information on the
Plan Administrators website is not part of this
prospectus. See instructions below describing how to purchase
and sell shares for more information. Refer to
Question
10 Are there fees associated with participation in
the Plan?
below for details on fees charged for these
transactions and services.
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We may offer discounts ranging from 0% to 5%. At our discretion,
the discount may be offered at variable rates on one, all or a
combination of the sources of investments, or not at all.
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3.
What
are the disadvantages of the Plan?
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All dividends paid on shares credited to your account under the
Plan must be reinvested under the Plan.
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We will not pay you any interest on optional cash payments held
by the Plan Administrator before the monthly investment date.
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If you send us money to buy stock through the Plan, we will
return that money to you, without interest, if it is below the
minimum amount allowed. We will also return to you, without
interest, money you send that is above the maximum amount
allowed.
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If the shares that you purchase under the Plan are purchased
directly from us, we will not determine the purchase price until
the applicable monthly investment date. As a result, you will
not know the actual price per share or number of shares you will
purchase until that date.
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If the shares that you purchase under the Plan are purchased in
the open market or negotiated transactions with third parties,
we will not determine the purchase price until the required
number of shares have been acquired and the resultant weighted
average purchase price has been calculated.
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9
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If you decide to make optional cash investments through the
Plan, your cash payment may be exposed to changes in market
conditions for a longer period of time than if you had arranged
to buy shares through a broker.
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You cannot pledge shares of LSB common stock deposited in your
Plan account until you withdraw the shares from the Plan.
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You generally will pay tax on the amount of any brokerage
commissions that we pay in connection with your reinvestment of
dividends or optional cash purchases where the shares so
purchased were acquired by the Plan Administrator in the open
market or from third parties.
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4.
Does
participation in the Plan involve any risk?
The risk to stockholders who participate in the Plan is the same
as with any other investment in shares of LSB common stock. If
you purchase common stock under the Plan, you lose any advantage
otherwise available from being able to select the timing of your
investment. You should also recognize that, like any investment,
LSB cannot assure you of a profit or dividend, or protect you
against a loss on the shares purchased under the Plan.
Administration
5.
Who
administers the Plan?
Computershare Trust Company, N.A.
(Computershare) currently is the Plan Administrator,
registered transfer agent, and designated agent for each
participating stockholder. Computershare, as Plan Administrator,
administers the Plan, purchases and holds shares acquired for
you under the Plan, keeps records, sends statements of account
activity and performs other duties related to the Plan. The Plan
Administrator holds for safekeeping the shares purchased for you
together with shares forwarded by you to the Plan Administrator
for safekeeping until termination of your participation in the
Plan or receipt of your request for a certificate for all or
part of your shares. Shares purchased under the Plan and held by
the Plan Administrator will be registered in the Plan
Administrators name or the name of its nominee, in either
case as your agent. In the event that the Plan Administrator
should resign or otherwise cease to act as agent, we will
appoint a new administrator to administer the Plan. The Plan
Administrator also acts as dividend disbursing agent, transfer
agent and registrar for shares of our common stock.
We and the Plan Administrator will not be liable in
administering the Plan for any act done in good faith or as
required by applicable securities laws or for any good faith
omission to act including, without limitation, any claim or
liability arising out of failure to terminate your account upon
your death, or with respect to the prices at which shares are
purchased or sold for your account and the times when such
purchases or sales are made or with respect to any fluctuation
in the market value after purchase or sale of shares. Neither we
nor the Plan Administrator shall have any duties,
responsibilities or liabilities except such as are expressly set
forth in the Plan.
6.
How
do I contact the Plan Administrator?
Unless you are participating in the Plan through your bank,
broker or nominee, if you have questions regarding the Plan,
please write to the Plan Administrator at the following address:
LSB Corporation
c/o Computershare
Trust Company, N.A.
P.O. Box 43078
Providence, RI
02940-3078
or call the Plan Administrator at
1-800-254-5196
within the United States and Canada or 1-312-360-5219 outside
the United States and Canada. Include your name, address,
daytime telephone number, account number and reference LSB
Corporation on all correspondence. All transaction requests
should be directed to the Plan Administrator at
P.O. Box 43078, Providence, RI
02940-3078.
10
In addition, you may visit the Plan Administrators website
at
www.computershare.com/investor
. At this website, you
can enroll in the Plan, obtain information and perform certain
transactions for your Plan account (unless you are participating
in the Plan through your bank, broker or nominee) via the
Investor Centre on the website.
If you participate in the Plan through your bank, broker or
nominee, you must contact your bank, broker or nominee for all
information regarding the Plan and all Plan transactions.
Participation
7.
Who
is eligible to participate?
All holders of record of LSB common stock are eligible to
participate in the Plan. Beneficial owners whose shares are
registered in names other than their own (
i.e.
, in the
name of a broker or bank nominee) must arrange with the
stockholder of record for participation. If for any reason a
beneficial owner is unable to arrange participation with his or
her broker or bank nominee, he or she must become a record
holder by having at least one share transferred to his or her
own name in order to participate in the Plan.
8.
How
does an eligible stockholder participate?
You may join the Plan by completing and signing an enrollment
form and returning it by mail to the Plan Administrator. An
enrollment form may be obtained at any time by telephone or
written request to the Plan Administrator at the above telephone
number or address. You may also enroll online at
www.computershare.com/investor
.
The enrollment form and any written notification of other
instructions must be signed by or on behalf of all owners of
record of the relevant shares. When such shares are held in more
than one name (
i.e.,
joint tenants, co-trustees, etc.),
all registered holders must sign. When an enrollment form or
written notification is signed by an executor, administrator,
trustee or guardian, or as attorney, the capacity in which the
enrollment form or notification is signed must be specified. An
enrollment form or written notification by a stockholder that is
a corporation or other organization, should be signed by an
authorized officer or other official, identified as such.
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9.
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How do
I enroll in the Plan or change my dividend reinvestment
election?
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If you are the registered holder of shares, you may chose to
reinvest all or a portion of the cash dividends paid on your
shares reinvested under the Plan in additional shares by
accessing your account online at
www.computershare.com
or
by completing an enrollment form and returning it to the Plan
Administrator. You can change your dividend reinvestment
election at any time by accessing the Plan Administrators
website at
www.computershare.com
or by completing and
signing a new enrollment form and returning it to the Plan
Administrator. For your new or changed participation to be
effective for a particular dividend, your notification must be
received on or before the record date for that dividend.
You must choose one of the following when completing the
enrollment form:
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FULL DIVIDEND REINVESTMENT
reinvest all
dividends on all of the shares of common stock registered in
your name, as well as on all the shares credited to your account
under the Plan; you may also invest by making optional cash
payments in the amount of $50 to $10,000 per month.
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PARTIAL DIVIDEND INVESTMENT
reinvest
dividends on a specific number of shares of common stock
registered in your name as set forth in the Enrollment
Application, all remaining dividends will be paid in cash ; you
may also invest by making optional cash payments in the amount
of $50 to $10,000 per month.
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If a signed enrollment form is returned without one of the boxes
checked, you will be enrolled under the Full Dividend
Reinvestment option. If a signed enrollment form is
returned with the Partial Dividend Reinvestment box
checked but without designating the number of shares of common
stock registered in your name for which cash dividends are to be
reinvested, the form will be returned to you for completion.
11
A stockholder may not participate in the Plan solely with
respect to optional cash payments. The dividends on at least one
share registered in your name must be reinvested under the Plan.
If you are a beneficial owner of shares of LSB common stock, you
must instruct your bank, broker or nominee regarding
reinvestment of dividends.
Costs
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10.
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Are
there fees associated with participation in the
Plan?
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Yes. The following fees apply to your participation in the Plan:
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Fees
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If Purchases are
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If Purchases are
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Made Directly
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Made in the
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from Us
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Open Market
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Service fee for optional cash investments made via check or
Internet payment
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None
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None
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Service fee for optional cash investments made via recurring
automatic monthly investment
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None
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None
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Service fee for dividend reinvestment
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None
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None
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Processing fee for purchase of shares (including any brokerage
commissions the Plan Administrator is required to pay)
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None
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$0.05 per share
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Fee for safekeeping
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None
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None
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Service fee for a batch order sale of shares (partial or full)
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$15.00
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$15.00
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Service fee for a market order sale of shares (partial or full)
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$25.00
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$25.00
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Service fee for sale of a fractional share at termination or
withdrawal
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Up to $15.00
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Up to $15.00
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Processing fee for sale of shares
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$0.12 per share
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$0.12 per share
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Returned check or failed electronic payment fee
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$25.00
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$25.00
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We can change the fee structure of the Plan at any time. We will
give you notice of any fee changes prior to the changes becoming
effective.
Purchases
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11.
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Where
will the common stock purchased under the Plan come
from?
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The Plan Administrator will purchase stock:
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directly from us;
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in the open market;
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in privately negotiated transactions with third parties; or
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a combination of any of the above.
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Each quarter we will decide how the Plan Administrator will
purchase stock. We will not provide you with any written notice
about the source of the common stock to be purchased.
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12.
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What
will be the price of the common shares purchased under the Plan
for cash investments up to $10,000?
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For shares purchased directly from us, the purchase price will
be the average closing market price of LSBs common stock
as quoted on The Nasdaq Global Market on the three
(3) trading days immediately preceding the applicable
monthly investment date, less the Plan discount, if any, then in
effect. A trading day is any day on which trades are
reported on the Nasdaq Global Select Market. We may offer
discounts ranging up to 5%. At our discretion, the discount may
be offered at variable
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12
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rates on one, all or a combination of the sources of investments
(i.e., dividend reinvestment or optional cash purchases), or not
at all.
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For shares purchased in the open market or in privately
negotiated transactions with third parties, the purchase price
will be the weighted average of the actual prices that the Plan
Administrator pays for all of the common stock purchased for the
applicable monthly investment date.
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For shares purchased through a combination of these methods, the
purchase price will be the weighted average of the respective
prices determined as set forth above for all of the common stock
purchased for the applicable monthly investment date.
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13.
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How
many common shares will I be purchasing through the
Plan?
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The number of shares of common stock that you purchase depends
on several factors, including:
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the amount of the dividends you reinvest;
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the amount of any optional cash payments you make; and
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the purchase price of the common stock on the applicable monthly
investment date.
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The Plan Administrator will credit your account with a number of
shares, including fractions computed to six decimal places,
equal to the total amount to be invested divided by the
applicable purchase price. The only limit on the number of
shares available for purchase directly from us is the number of
shares of common stock registered for issuance under the Plan;
there is no limit on the number of shares available for purchase
in the open market for issuance under the Plan.
The shares purchased for you under the Plan will be held
separately from the shares of common stock which you purchase
(or have previously purchased) outside the Plan and hold in your
own name.
Dividend Reinvestments.
If the Plan
Administrator acquires shares directly from us, it will combine
the dividend funds of all Plan participants whose dividends are
automatically reinvested and will generally invest such dividend
funds on the dividend payment date (and one or more succeeding
trading days as necessary to complete the order). If the
dividend payment date falls on a day that is not a Nasdaq Global
Select Market trading day, then the investment will occur on the
next trading day. In addition, if the dividend is payable on a
day when optional cash payments are to be invested, dividend
funds may be commingled with any such pending cash investments
and a combined order may be executed. If the Plan Administrator
acquires shares from parties other than us through open market
transactions, such purchases will occur during a period
beginning on the day that would be deemed the Purchase Date if
the shares were acquired directly from us and ending no later
than 30 days following the date on which we paid the
applicable cash dividend, except where completion at a later
date is necessary or advisable under any applicable federal or
state securities laws or regulations. The record date associated
with a particular dividend is referred to in this Plan as a
dividend record date.
Optional Cash Investments up to $10,000.
If
the Plan Administrator acquires shares directly from us, then
the Purchase Date for optional cash investments up to $10,000
will be on the tenth calendar day of each month, or the next
trading day if the tenth day is not a trading day. If the Plan
Administrator acquires shares from third parties other than us
through open market transactions, it will attempt to buy our
common stock in the open market through a registered
broker-dealer. Such purchases will begin on the day that would
be deemed the Purchase Date if the shares were acquired directly
from us and will be completed no later than 35 days
following such date, except where completion at a later date is
necessary or advisable under any applicable federal or state
securities laws or regulations.
If you are investing by mail, the Plan Administrator must
receive your physical check at least two business days prior to
a Purchase Date. Optional cash investments received after the
applicable investment date deadline will be applied to purchase
shares on the following Purchase Date. If you are investing
online, please refer to your confirmation page for the estimated
debit date for your one-time deduction. The Plan Administrator
will commingle all funds received from participants. Once you
have placed your order, you may
13
not request a cash refund or otherwise change your order. No
interest will be paid by LSB or the Plan Administrator on funds
pending investment held by the Plan Administrator.
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14.
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When
will purchases of common shares be made for cash investments up
to $10,000?
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The Purchase Date is the date or dates on which the
Plan Administrator purchases shares of our common stock for the
Plan, as described above.
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15.
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How do
I make optional cash investments up to $10,000?
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To make an investment online, go to
www.computershare.com/investor
select Investor Centre and
follow the online instructions. Please refer to your
confirmation page for the estimated debit date for your one-time
deduction. Optional cash investments may also be mailed to the
Plan Administrator with the tear-off portion of your account
statement or via detailed written instructions. Checks must be
in U.S. dollars and drawn on a U.S. bank. The Plan
Administrator will not accept cash, travelers checks,
money orders or third party checks.
You may also authorize the Plan Administrator, on a Direct Debit
Authorization Form or the Plan Administrators website, to
make monthly purchases of a specified dollar amount, paid for by
automatic withdrawal from your U.S. bank account. Funds
will be withdrawn from your bank account, via EFT, on the fifth
(5
th
) day
of each month (or the next business day if the fourth is not a
business day). You may terminate monthly purchases by automatic
withdrawal online or by, sending the Plan Administrator written,
signed instructions. It is your responsibility to notify the
Plan Administrator if your direct debit information changes.
In the event that any check, draft or electronic funds transfer
you may tender or order as payment to the Plan Administrator to
purchase LSB common stock is dishonored, refused or returned,
you agree that the purchased shares when credited to your
account may be sold, on the Plan Administrators order
without your consent or approval, to satisfy the amount owing on
the purchase. The amount owing will include the purchase price
paid, any purchase and sale transaction fees, any brokerage
commissions and the Plan Administrators returned check or
failed electronic payment fee of $25.00. If the sale proceeds of
purchased shares are insufficient to satisfy the amount owing,
you authorize the Plan Administrator to sell additional shares
then credited to your account as necessary to cover the amount
owing, without your further consent or authorization. The Plan
Administrator may sell shares to cover an amount owing as a
result of your order in any manner consistent with applicable
securities laws. You grant the Plan Administrator a security
interest in all shares credited to your account including
securities subsequently acquired and held or tendered for
deposit, for purposes of securing any amount owing as described
in this paragraph.
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16.
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What
is the price I will pay and what will be the investment date for
cash investments of more than $10,000?
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The Company in its sole discretion may announce from time to
time that is willing to consider requests for a waiver of the
$10,000 maximum amount for optional share repurchases.
Shares of LSB common stock purchased pursuant to a request for
waiver for optional cash investments of more than $10,000 will
be acquired at a price to you equal to the average closing
market price of LSBs common stock as quoted on The Nasdaq
Global Market for each trading day during the pricing period.
The pricing period for optional investments made pursuant to an
approved request for waiver will be the day or days set forth in
the request for waiver, which may be the investment date or up
to ten trading days prior to and including an investment date. A
request for waiver may specify one or more investment dates.
Shares purchased with optional cash investments of more than
$10,000 pursuant to a request for waiver may be purchased at a
discount from the purchase price and may be subject to a
threshold price and will only be purchased directly from us, and
not through open market transactions.
Unless we waive our right to do so, we may establish for any
investment date a minimum price (the threshold
price) for purchasing shares with optional cash
investments made pursuant to written requests for waiver. We
will, at least two business days prior to the commencement of
the pricing period for an investment date, determine whether to
establish a threshold price and, if a threshold price is
established, its amount and so
14
notify the Plan Administrator. The determination whether to
establish a threshold price and, if a threshold price is
established, its amount will be made by us in our discretion
after a review of current market conditions, the level of
participation in the Plan, and current and projected capital
needs.
The threshold price for optional cash investments made pursuant
to written requests for waiver, if established for any
investment date, will be a stated dollar amount that the average
of the high and low sales prices of LSBs common stock as
quoted on The Nasdaq Global Market for each trading day of the
relevant pricing period (not adjusted for discounts, if any)
must equal or exceed. If the threshold price is not satisfied
for a trading day in the pricing period, then that trading day
and the trading prices for that day will be excluded from that
pricing period and a pro rata portion of the participants
cash will be returned, without interest. Thus, for example, if
an approved request for waiver specifies that the pricing period
is one day (that is, the investment date) and the threshold
price is not satisfied on that day, then no investment will be
made and the participants cash will be returned in full.
Likewise, if the threshold price is not satisfied for two of the
five trading days in a particular pricing period, then the
average sales price for purchases and the amount of optional
cash investments which may be invested will be based upon the
remaining three trading days when the threshold price is
satisfied. In such case, for each trading day on which the
threshold price is not satisfied, one-fifth of the optional cash
investment made by a participant pursuant to a request for
waiver would be returned to such participant, without interest,
as soon as practicable after the applicable investment date.
Similarly, a pro rata portion of the participants cash
will be returned if there are fewer trading days prior to the
investment date than are specified as the pricing period in the
request for waiver or if no trades in LSBs common stock
are quoted on The Nasdaq Global Market for a trading day during
the pricing period, due to a market disruption or for any other
reason.
We may elect to activate for any particular pricing period the
pricing period extension feature, which will provide that the
initial pricing period will be extended by the number of days
during such period that the threshold price is not satisfied, or
on which there are no trades of LSBs common stock reported
by The Nasdaq Global Market, subject to a maximum of five
trading days. If we elect to activate the pricing period
extension feature and the threshold price is satisfied for any
additional day that has been added to the initial pricing
period, then that day will be included as one of the trading
days for the pricing period in lieu of the day on which the
threshold price was not met or trades of our common stock were
not reported. For example, if the determined pricing period is
ten days, and the threshold price is not satisfied for three out
of those ten days in the initial pricing period, and we had
previously announced at the time of the request for waiver
acceptance that the pricing period extension feature was
activated, then the pricing period will automatically be
extended, and if the threshold price is satisfied on the next
three trading days (or a subset thereof), then those three days
(or a subset thereof) will be included in the pricing period in
lieu of the three days on which the threshold price was not met.
As a result, the purchase price will be based upon the ten
trading days of the initial and extended pricing period on which
the threshold price was satisfied and all of the cash investment
will be invested (rather than 30% being returned).
The threshold price and pricing period extension concepts and
return procedure discussed above apply only to optional cash
investments made pursuant to written requests for waiver.
Setting a threshold price for an investment date shall not
affect the setting of a threshold price for any subsequent
investment date.
For any particular investment date, we may waive our right to
set a threshold price for optional cash investments that exceed
$10,000. Neither LSB nor the Plan Administrator shall be
required to provide any written notice to participants as to the
threshold price for any investment date. Participants, however,
may ascertain whether the threshold price applicable to an
investment date pursuant to a request for waiver has been set or
waived, as applicable, by telephoning LSB at
(978) 725-7500.
The purchase price will not be known until the purchase is
completed. Participants should be aware that the price may
fluctuate during the period between submission of a purchase
request, its receipt by the Plan Administrator, and the ultimate
purchase on the open market.
15
Reports
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17.
|
How
will I be advised of my purchases of shares?
|
If you are a registered holder, the Plan Administrator will mail
a
year-to-date
summary plan statement after each cash dividend. In addition, a
statement will be mailed to you after each purchase, which
statement will include the number of shares purchased and the
purchase price. You may also view your transaction history
online by logging into your account on the Plan
Administrators website at
www.computershare.com/investor
. Details available online
include share price, commission and fees paid, and transaction
type and date.
If you are a beneficial owner, you must contact your bank,
broker or nominee for information regarding transactions in your
account.
Dividends
on Shares held under the Plan
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18.
|
Will I
be credited with dividends on shares held in my account under
the Plan?
|
Yes. LSB pays dividends, if and as declared, to the record
holders of all its shares. As the record holder for
participants, the Plan Administrator will be entitled to receive
dividends for all shares credited to Plan accounts on the record
date. The Plan Administrator will credit such dividends to you
on the basis of full and fractional shares held in your account.
In the unlikely event that your dividends are not reinvested
within 30 days of the dividend reinvestment date, they will
be distributed to you.
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19.
|
When
will I be paid dividends on common stock purchased through the
Plan?
|
You will receive dividends on those shares purchased through the
Plan for which you are the stockholder of record as of the
record date for a dividend as set by the Board of Directors
(normally two weeks before the respective dividend payment
date). Any shares purchased between a dividend record date and
corresponding dividend reinvestment date will not earn dividends
until the following dividend reinvestment date.
Safekeeping
of Certificates for Shares
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20.
|
What
is safekeeping of certificates and how do I submit my
certificates?
|
If you own shares of LSB common stock in stock certificate form,
you may elect to deposit the shares represented by those stock
certificates into your Plan account for safekeeping with the
Plan Administrator. The Plan Administrator will credit these
shares to your Plan account. You may later request issuance of a
certificate from the Plan Administrator at any time.
To deposit shares with the Plan Administrator, send your stock
certificates to the Plan Administrator at the address listed in
Question 6 above. We recommend that you send your certificates
via registered mail and insured for 3% of the total value of the
shares to protect against loss in transit.
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21.
|
How do
I withdraw shares held in my Plan account?
|
You may request that the Plan Administrator issue a certificate
for some or all of the shares held in your Plan account by doing
any of the following:
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|
|
Access the Plan Administrators website at
www.computershare.com/investor
. Select Investor
Centre, login to your account and then follow the online
instructions;
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|
|
|
Call
1-800-254-5196
to access the Plan Administrators automated telephone
system; or
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|
|
Complete and sign the tear-off portion of your statement and
mail the instructions to the Plan Administrator.
|
The Plan Administrator will issue a certificate in the exact
registered name shown on your Plan statement. Certificates will
be sent by first class mail, generally within a few days of
receiving your request. There is no charge to you for this
service.
16
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22.
|
How do
I transfer shares to another person?
|
You may transfer ownership of some or all of your Plan shares to
another person, whether by gift, private sale, or otherwise. In
order to transfer some or all of your shares, you must properly
complete a Transfer of Ownership Form, or an executed stock
power, and return it to the Plan Administrator. Transfers may be
made in book-entry or certificated form.
Requests for transfer of book-entry shares held under the Plan
are subject to the same requirements as the transfer of our
common stock certificates, including the requirement of a
medallion signature guarantee. You may request a copy of the
Transfer of Ownership Form by contacting the Plan Administrator
at
1-800-254-5196
or by downloading the forms from the Plan Administrators
website at
www.computershare.com/investor
.
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23.
|
How do
I sell shares held in my account?
|
You can sell some or all of the shares held in your Plan account
by contacting the Plan Administrator. You have two choices when
making a sale, depending on how you submit your sale request, as
follows:
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Market Order:
A market order is a request to
sell shares promptly at the current market price. Market order
sales are only available at
www.computershare.com/investor
through Investor Centre or
by calling the Plan Administrator directly at
1-800-254-5196.
Market order sale requests received at
www.computershare.com/investor
through Investor Centre or
by telephone will be placed promptly upon receipt during market
hours (normally 9:30 a.m. to 4:00 p.m. Eastern time).
Any orders received after 4:00 p.m. Eastern time will be
placed promptly on the next day the market is open. The price
shall be the market price of the sale obtained by the Plan
Administrators broker, less a service fee of $25 and a
processing fee of $0.12 per share sold.
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Batch Order:
A batch order is an accumulation
of all sale requests for a security submitted together as a
collective request. Batch orders are submitted on each market
day, assuming there are sale requests to be processed. Sale
instructions for batch orders received by the Plan Administrator
will be processed no later than five business days after the
date on which the order is received (except where deferral is
required under applicable federal or state laws or regulations),
assuming the applicable market is open for trading and
sufficient market liquidity exists. Batch order sales are
available at
www.computershare.com/investor
through
Investor Centre or by calling the Plan Administrator directly at
1-800-254-5196.
All sales requests received in writing will be submitted as
batch order sales. The Plan Administrator will cause your shares
to be sold on the open market within five business days of
receipt of your request. To maximize cost savings for batch
order sales requests, the Plan Administrator may combine each
selling Plan participants shares with those of other
selling Plan participants. In every case of a batch order sale,
the price to each selling Plan, participant shall be the
weighted average sale price obtained by the Plan
Administrators broker for each aggregate order placed by
the Plan Administrator and executed by the broker, less a
service fee of $15 and a processing fee of $0.12 per share sold.
Proceeds are normally paid by check, which are distributed
within 24 hours after your sale transaction has settled.
|
The Plan Administrator reserves the right to decline to process
a sale if it determines, in its sole discretion, that supporting
legal documentation is required. In addition, no one will have
any authority or power to direct the time or price at which
shares for the Plan are sold, and no one, other than the Plan
Administrator, will select the broker(s) or dealer(s) through or
from whom sales are to be made.
You should be aware that the price of our common shares may rise
or fall during the period between a request for sale, its
receipt by the Plan Administrator and the ultimate sale on the
open market. Instructions sent to the Plan Administrator to sell
shares are binding and may not be rescinded. If you prefer to
have complete control as to the exact timing and sales prices,
you can transfer the shares to a broker of your own choosing and
sell them through a broker.
17
Withdrawal
from Participation; Termination of Participation
|
|
24.
|
May I
withdraw from the Plan?
|
Yes. The Plan is entirely voluntary, and you may withdraw at any
time.
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25.
|
How do
I withdraw from the Plan?
|
You may withdraw from the Plan at any time using the tear-off
stub at the bottom of your account statement and forwarding it
to the Plan Administrator at the address set forth in Question 6
above. When you withdraw from the Plan, or upon termination of
the Plan by LSB, you will receive certificates for every whole
share credited to your account under the Plan and a cash payment
for any fractional share held in your Plan account. The cash
payment will be based on the current price of our shares, less a
service charge of $15 and a processing fee. The value of such
share certificates and cash payment received in lieu of
fractional share interest may be greater than, equal to, or less
than the amount you paid for such shares and fractional share
interest.
If the Plan Administrator receives your request to withdraw from
the Plan near any dividend record date, the Plan Administrator,
in its sole discretion, may either distribute such dividends in
cash or reinvest them in shares on your behalf In the event
reinvestment is made, the Plan Administrator will process the
termination as soon as practicable, but in no event later than
five business days after the investment is complete.
A stockholder may elect to re-enroll in the Plan at any time
pursuant to the procedures outlined in Question 8 and 9.
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26.
|
May
LSB terminate my participation in the Plan?
|
If you do not own at least one whole share held through the
Plan, your participation in the Plan may be terminated. We may
also terminate your participation in the Plan after written
notice in advance mailed to you at the address appearing on the
Plan Administrators records.
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27.
|
What
happens when I sell or transfer some or all of the shares
registered in my name?
|
If you dispose of some or all shares of LSB common stock
registered in your name (as opposed to shares held through the
Plan), that transfer will not affect your participation in the
Plan; however, if less than one whole share is held in the Plan
account, you may receive a cash payment for the fractional
share, and the Plan account will be closed. As long as at least
one whole share is held in the Plan account, the Plan
Administrator will continue to fully reinvest the dividends on
the shares credited to your account under the Plan until
notified that you wish to withdraw from the Plan. If you desire
to dispose of all shares credited to your account under the
Plan, you first must withdraw from the Plan as described in
Question 25 above. An administrative fee and brokerage
commission will be charged in the event you ask the Plan
Administrator to sell the shares held in your Plan account, see
Question 23 above.
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28.
|
How do
I close my account?
|
If you are a registered holder, you may terminate Plan
participation by directing the Plan Administrator to sell all of
the shares in your account. You may submit a signed written
instruction to the Plan Administrator, complete the tear-off
form from your account statement, or you may utilize the Plan
Administrators website. Follow the sales procedure
outlined under
How do I sell shares held in my
account?
above, making certain to elect the sale of
all Plan shares.
Alternatively, you may elect to receive a certificate for the
full shares held in your Plan account and to sell any fractional
share remaining. In such case, a certificate will be issued for
the whole shares and a cash payment will be made for any
remaining fractional share. That cash payment will be based upon
the current market price of LSBs common stock on the
business day on which the withdrawal request is received, less
any service fee, any applicable brokerage commission and any
other costs of sale.
You must specifically inform the Plan Administrator that you
wish to terminate participation in the Plan (which option is
listed separately on the tear-off form attached to Plan
statements). If you fail to do so, future
18
dividends on non-Plan shares will continue to be reinvested in
accordance with your pre-termination instructions, until you
direct the Plan Administrator otherwise.
If you are a beneficial owner, you must contact your bank,
broker or nominee to close your account.
Other
Information
|
|
29.
|
If LSB
issues rights to purchase securities to the holders of common
shares, how will the rights on Plan shares be
handled?
|
If we issue rights to purchase additional shares of our common
stock or any other securities to holders of our common stock,
the Plan Administrator will sell those rights relating to shares
of common stock held by the Plan Administrator for participants
and invest the proceeds in additional shares of common stock on
the next monthly investment date. In the event that those rights
are not saleable or detachable, the Plan Administrator will hold
those rights for your benefit. If you wish to receive any rights
directly, you may do so by sending to the Plan Administrator, at
least five (5) business days before the record date for the
rights offering, a written request that certificates for shares
in your Plan account be sent to you.
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30.
|
What
happens if LSB declares a stock split or stock
dividend?
|
The Plan Administrator will add any shares resulting from a
stock split or stock dividend, on shares you hold in your Plan
account, to your Plan account. LSB will issue any shares
resulting from a stock split, on stock held by you outside the
Plan, in the same manner as we would if you were not
participating in this Plan. Transaction processing under the
Plan may be curtailed or suspended until the completion of any
stock dividend, stock split or other corporate action.
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31.
|
How
will my shares held under the Plan be voted at meetings of
stockholders?
|
You will receive a proxy card covering those whole shares of
common stock credited to your account under the Plan and those
shares registered in your name that are not within the Plan. If
the proxy card is returned properly signed and marked for
voting, all of the shares will be voted as marked.
Alternatively, you may vote in person at stockholders
meetings.
If a proxy card is returned properly signed but without
indicating instructions as to the manner in which shares are to
be voted with respect to any items, all of your shares will be
voted (to the extent legally permissible) in accordance with the
recommendations of LSBs Board of Directors. This procedure
is consistent with the actions taken with respect to
stockholders who are not participating in the Plan and who
return properly signed proxy cards and do not provide voting
instructions. If the proxy card is not returned, or if it is
returned unsigned or improperly signed, none of your shares
covered by such proxy card will be voted unless you or your duly
appointed representative votes in person at the meeting.
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32.
|
What
are the Material Federal Income Tax Consequences of
participation in the Plan?
|
Reinvestment of cash dividends does not relieve you of liability
for any income tax which may be payable on such dividends. If
you reinvest dividends under the Plan, you will be treated for
Federal income tax purposes as having received, on the dividend
reinvestment date, a dividend equal to the then fair market
value of the shares purchased with such reinvested dividends
plus any tax withheld prior to investment, even though you do
not actually receive such amount in cash. The fair market value
will be the closing bid price for our common stock on the
dividend reinvestment date as quoted on The Nasdaq Global
Market, and not the
three-day
average used to calculate the purchase price under the Plan.
The cost basis for Federal income tax purposes of any shares
acquired with reinvested dividends will be equal to the fair
market value of such shares as of the applicable dividend
reinvestment date. The basis of shares that are purchased with
an initial investment or optional cash payment will be equal to
the purchase price of such shares. The amount of tax payable on
dividends reinvested after 2003 will depend upon whether the
dividends are considered to be qualified and
therefore taxable at long-term capital gains rates (5% or 15%)
or non-qualified and taxable at ordinary income tax
rates. In order for the dividends to be qualified, you must be a
non-corporate taxpayer and certain holding period and other
requirements must be met. We
19
recommend that you check with your tax advisor to determine
whether the dividends reinvested are qualified or non-qualified,
and the tax ramifications of the reinvestment of those dividends.
You will generally not realize taxable income when you receive
certificates for whole shares credited to your account under the
Plan. However, if you withdraw from the Plan and receive the
proceeds from the sale of a fractional share credited to your
account, you may realize a gain or loss with respect to such
fraction. Gain or loss may also be realized when whole shares
are sold subsequent to withdrawal from the Plan. The amount of
such gain or loss will be the difference between the amount
realized from the sale and your tax basis for the shares sold.
The amount realized will be your gross proceeds less brokerage
fees and commissions and any transfer taxes you pay. Subject to
limitations contained in the Internal Revenue Code, the
administrative fees and charges you incur upon the sale of
shares may be deductible if you itemize deductions on your
income tax return.
If a sale is made not more than one year after acquisition, any
gain (or loss) may be taxed as short-term capital gain (or
loss). If the sale is made after one year, the gain (or loss)
may be taxed as a long-term capital gain (or loss). The holding
period for shares acquired pursuant to the Plan will begin on
the day following the purchase of such shares.
LSB will in the first instance pay for any costs incurred by the
Plan Administrator in purchasing shares in the open market for
investment under the Plan, including any brokerage commissions.
The respective amount of such costs will, however, be taxable to
the Plan participant as miscellaneous income. In such event, the
participants basis in the shares so purchased will be
increased by the amount of such income that you are treated as
having received for Federal income tax purposes.
In case you are a foreign stockholder subject to United States
income tax or are subject to backup withholding, the amount
required to be withheld will be deducted from the dividends
payable to you, and the remaining amount will be applied to the
purchase of shares under the Plan. The filing of any
documentation required to obtain an exemption from, or a
reduction in, United States withholding tax is your
responsibility.
LSB believes the foregoing is an accurate summary of the
material Federal income tax consequences of your participation
in the Plan as of the date of this Prospectus. This summary may
not reflect every possible situation that could result from
participation in the Plan.
THEREFORE, EACH PARTICIPANT IS
URGED TO CONSULT HIS OR HER OWN TAX ADVISOR TO DETERMINE THE
PARTICULAR FEDERAL, STATE AND LOCAL TAX CONSEQUENCES RESULTING
FROM PARTICIPATION IN THE PLAN AND THE SUBSEQUENT DISPOSAL OF
SHARES PURCHASED PURSUANT TO THE PLAN.
If you do not
reside in the United States, your income tax consequences will
vary from jurisdiction to jurisdiction. In addition, the
foregoing rules may not be applicable to certain participants in
the Plan, such as tax-exempt entities (such as pension funds and
IRAs).
Please keep copies of your Plan account statements to assist you
in complying with the Federal income tax laws. The foregoing
summary is subject to superseding changes in law and regulation;
neither LSB nor the Plan Administrator is obligated to inform
you of any such changes.
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33.
|
Who
interprets and regulates the Plan?
|
Any interpretative question arising under this Plan will be
determined by LSB in its sole discretion and any determination
that we make will be final. We may adopt rules and regulations
to facilitate the administration of this Plan. The terms and
conditions of this Plan and its operation will be governed by
the laws of the Commonwealth of Massachusetts.
If it appears to LSB that you are using or contemplating the use
of the Plan in a manner or with an effect that, in the sole
judgment and discretion of LSB, is not in the best interests of
LSB or its other stockholders, then LSB may decline to issue all
or any portion of the shares of common stock for which you have
tendered payment. Such payment (or the portion thereof not to be
invested in shares of common stock) will be returned by LSB as
promptly as practicable, without interest. Under such
circumstances, LSB may also act to terminate your participation
under the Plan.
20
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34.
|
What
are the responsibilities of LSB and the Plan Administrator under
the Plan?
|
In acting under the terms and conditions of the Plan as
described in this Prospectus, neither LSB nor the Plan
Administrator will be liable for any act done in good faith or
for any omission to act unless done (or omitted) in bad faith or
due to gross negligence including, without limitation, any claim
of liability arising with respect to (i) failure to
terminate any participants Plan account upon such
participants death or adjudication of incompetence, prior
to receipt of notice in writing of such death or adjudication of
incompetence, (ii) the prices at which shares are purchased
or sold for your account and the times when such purchases or
sales are made, (iii) any fluctuation in the market value
before or after purchase or sale of shares, or (iv) the tax
treatment of dividends reinvested under the Plan.
You should recognize that neither LSB nor the Plan Administrator
can assure you of a profit or protect you against a loss on the
shares purchased or sold by you under the Plan.
We reserve the right to modify the terms of the Plan, including
applicable fees, or to terminate the Plan at any time. In
addition, we reserve the right to interpret and regulate the
Plan as we deem necessary or desirable in connection with its
operation. The Plan is generally not for use by institutional
investors or financial intermediaries. The Plan shall be
governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts. Participation in the Plan, via
any of the means outlined herein, shall constitute an offer by
the participant to establish an agency relationship with the
Plan Administrator and shall be governed by the terms and
conditions of the Plan.
Neither LSB nor the Plan Administrator will provide any
advice, make any recommendations, or offer any opinion with
respect to whether or not you should purchase or sell shares or
otherwise participate under the Plan. You must make independent
investment decisions based on your own judgment and research.
The shares held in Plan accounts are not subject to protection
under the Securities Investor Protection Act of 1970.
The Plan provides that neither LSB nor the Plan Administrator,
nor any agent will be liable in administering the Plan for any
act done in good faith or any omission to act in good faith in
connection with the Plan. This limitation includes, but is not
limited to, any claims of liability relating to:
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the failure to terminate your Plan account upon your death prior
to receiving written notice of your death; or
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the purchase or sale prices reflected in your Plan account or
the dates of purchases or sales of shares under the Plan; or
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any loss or fluctuation in the market value of our shares after
the purchase or sale of shares under the Plan; or
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the tax treatment of dividends reinvested under the Plan.
|
The foregoing limitation of liability does not represent a
waiver of any rights you may have under applicable securities
laws.
|
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35.
|
Will
my investments be insured?
|
No. The securities held in the Plan accounts for Plan
participants and sales proceeds and funds held pending
investment are not subject to protection under the Securities
Investor Protection Act of 1970. Funds held by the Plan
Administrator are not deposits of River Bank or any of its
subsidiaries, deposits of the Plan Administrator or other
obligations of, or guaranteed by, the Plan Administrator or its
affiliates and are not insured by the Federal Deposit Insurance
Corporation, the Securities Investor Protection Corporation or
any other entity. Shares of LSB common stock are subject to
market risk and possible loss of investment.
WHERE YOU
CAN FIND MORE INFORMATION
This prospectus is part of a registration statement that we
filed with the SEC to register the stock offered under the Plan.
This prospectus does not contain all the information you can
find in the registration statement or the exhibits to the
registration statement. You may inspect the registration
statement and exhibits without charge at the SECs public
reference room at 100 F Street, N.E.,
Washington, D.C. 20549, and you may obtain
21
copies upon payment of a duplicating fee. You may obtain
information on the operation of the public reference room by
calling the SEC at
1-800-SEC-0330.
We also file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and
copy any materials we file with the SEC at the SECs public
reference room. The SEC maintains an Internet website that
contains reports, proxy and information statements and other
information regarding issuers that file electronically with the
SEC at
www.sec.gov
.
We make available free of charge through our Internet website at
www.riverbk.com
our annual reports on
Form 10-K,
quarterly reports on
Form 10-Q,
current reports on
Form 8-K,
and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of
1934 as soon as reasonably practicable after we electronically
file such material with, or furnish it to, the SEC. A link to
such filings is provided at
www.riverbk.com/stockholder-info.asp
. The information on
our website is not incorporated by reference into this
prospectus and does not constitute a part of this prospectus.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the
information we file with the SEC, which means that we can
disclose important information to you by referring you to those
documents. The information incorporated by reference is an
important part of this prospectus, and information that we file
later with the SEC will automatically update and supercede this
information. We incorporate by reference the following documents:
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our Annual Report on
Form 10-K
(File
No. 000-32955)
for the year ended December 31, 2008;
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our Current Report on
Form 8-K
(File
No. 000-32955)
filed on January 30, 2009;
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our Current Report on
Form 8-K
(File
No. 000-32955)
filed on April 24, 2009; and
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our Quarterly Report on
Form 10-Q
(File
No. 000-32955)
for the quarter ended March 31, 2009, filed on May 13,
2009.
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In addition, the description of our common stock contained in
our registration statement filed under Section 12 of the
Securities Exchange Act of 1934, including any amendment or
report updating such description, is incorporated by reference
herein.
The description of the Renewed Rights Agreement between the
Company and Computershare Trust Company, N.A., as rights
agent, dated effective December 19, 2006, contained in our
registration statement on
Form 8-A12G
(File
No. 000-
32955) filed on January 31, 2006, as amended, is also
incorporated by reference herein.
All future filings we make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act,
prior to the termination of the offering, shall be deemed to be
incorporated by reference into this prospectus.
We will provide to each person, including any beneficial owner,
to whom this prospectus is delivered, a copy of any or all of
the information that has been incorporated by reference in this
prospectus but not delivered with this prospectus at no cost to
the requestor upon written or oral request to:
LSB Corporation
Investor Relations
30 Massachusetts Avenue
North Andover, MA
01845-3460
Telephone No.
(978) 725-7553
You should rely only on the information incorporated by
reference or provided in this prospectus or any prospectus
supplement. We have not authorized anyone to provide you with
different information. We are not making an offer of these
securities in any state where the offer is not permitted. You
should not assume that the information in this prospectus or the
documents incorporated by reference is accurate as of any date
other than the date on the front of this prospectus or those
documents.
22
PLAN OF
DISTRIBUTION
As stated elsewhere in this Plan, you will not pay any brokerage
fees or commissions for securities purchased on the open market
or otherwise under the Plan. Instead, we will pay these fees to
the Plan Administrator. Certain fees apply to participants in
the Plan, which are set forth in the Prospectus under
The Plan Question 10 Are there
fees associated with participation in the Plan?
Persons who acquire shares of our common stock through the Plan
and resell them shortly after acquiring them, including coverage
of short positions, under certain circumstances may be
participating in a distribution of securities that would require
compliance with Regulation M under the Securities Exchange
Act of 1934, and may be considered to be underwriters within the
meaning of the Securities Act of 1933. We will not extend to any
such person any rights or privileges other than those to which
he, she or it would be entitled as a participant, nor will we
enter into any agreement with any such person regarding the
resale or distribution by any such person of the shares of our
common stock so purchased.
USE OF
PROCEEDS
We will use the net proceeds from the sale of common stock
purchased through this Plan directly from us for general
corporate purposes. We have no basis for estimating either the
number of shares of common stock that ultimately will be sold by
us under the Plan or the prices at which we will sell shares. We
will not receive any proceeds from the purchase of common stock
by the Plan Administrator in the open market or in privately
negotiated transactions with third parties.
EXPERTS
The consolidated financial statements of LSB Corporation as of
December 31, 2008 and 2007 and for years then ended,
incorporated by reference in this prospectus have been so
incorporated in reliance on the report of Wolf &
Company, P.C., an independent registered public accounting
firm, incorporated herein by reference, given on the authority
of said firm as experts in auditing and accounting.
LEGAL
MATTERS
The validity of the shares of common stock being offered by this
prospectus has been passed upon for us by Nutter
McClennen & Fish LLP, Boston, Massachusetts.
The date of this prospectus is June 2, 2009
23
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item 14.
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Other
Expenses of Issuance and Distribution
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The following is an itemized list of the estimated total
expenses incurred in connection with the issuance and
distribution of securities hereunder.
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Securities and Exchange Commission registration fee
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$
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215
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Transfer agent, registrar and custodian fees and expenses
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5,500
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Financial printer expenses
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6,000
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Legal fees and expenses
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12,000
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Accounting fees and expenses
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2,000
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Total Expenses
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$
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27,715.00
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Item 15.
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Indemnification
of Directors and Officers
|
The Registrant, LSB Corporation (the Company), is a
Massachusetts corporation. Sections 8.51 and 8.56 of the
Massachusetts Business Corporation Act (the MBCA)
provide that a corporation may, subject to certain limitations,
indemnify its directors and officers against any liability
incurred in any proceeding because of their service as director
or officer. Section 8.58 of the MBCA permits a corporation
by its articles of organization or bylaws or by a resolution
adopted or contract approved by its board of directors or
stockholders, to obligate itself in advance of the act or
omission giving rise to a proceeding to provide indemnification
in accordance with Section 8.51 or Section 8.56.
Section 8.57 of the MBCA provides that a corporation may
purchase and maintain insurance against liability incurred by an
individual in his or her capacity as officer or director, or
arising out of his or her status as such, whether or not the
corporation would have the power to indemnify such individual
against such liability.
The Companys By-laws provide that directors and officers
of the Company shall, and in the discretion of the Board of
Directors, non-officer employees may, be indemnified by the
Company against liabilities and expenses arising out of service
for or on behalf of the Company. The By-laws provide that such
indemnification shall not be provided if it is determined that
the action giving rise to the liability was not taken in good
faith in the reasonable belief that the action was in the best
interests of the Company. The By-laws provide that the
indemnification provision in the By-laws does not limit any
other right to indemnification existing independently of the
By-laws.
More specifically, Article VI, Section 1, of the
Registrants By-laws provides the following definitions
relating to the indemnification of directors and officers:
For purposes of this Article: (a) Officer means
any person who serves or has served as a Director of the Company
or in any other office filled by election or appointment by the
stockholders or the Board of Directors and any heirs or personal
representatives of such person; (b) Non-Officer
Employee means any person who serves or has served as an
employee of the Company, but who is not or was not an Officer,
and any heirs or personal representatives of such person;
(c) Proceeding means any action, suit,
investigation or proceeding, civil or criminal, brought or
threatened in or before any court, tribunal administrative or
legislative body or agency and any claim which could be the
subject of a Proceeding; and (d) Expenses means
any liability fixed by a judgment, order, decree or award in a
Proceeding, any amount reasonably paid in settlement of a
Proceeding and any professional fees or other disbursements
reasonably incurred in a Proceeding.
II-1
Article VI, Section 2, of the Companys By-laws
provides the Company shall indemnify Officers as follows:
Except as provided in Sections 4 and 5 of this
Article VI, each Officer of the Company shall be
indemnified by the Company against all Expenses incurred by such
Officer in connection with any Proceedings in which such Officer
is involved as a result of serving or having served (a) as
an Officer or employee of the Company; (b) as a director,
officer or employee of any wholly owned subsidiary of the
Company; or (c) in any capacity with any other corporation,
organization, partnership, joint venture, trust, benefit plan or
other entity at the request or direction of the Company.
Article VI, Section 3, of the Companys By-laws
provides the Company shall indemnify Non-Officer Employees as
follows:
Except as provided in Sections 4 and 5 of this
Article VI, each Non-Officer Employee of the Company may,
in the discretion of the Board of Directors, be indemnified
against any or all Expenses incurred by such Non-Officer
Employee in connection with any Proceeding in which such
Non-Officer Employee is involved as a result of serving or
having served (a) as a Non-Officer Employee of the Company;
(b) as a director, officer or employee of any wholly owned
subsidiary of the Company; or (c) in any capacity with any
other corporation, organization, partnership, joint venture,
trust, benefit plan or other entity at the request or direction
of the Company.
Article VI of the Companys By-laws also includes
certain provisions relating to the scope of the indemnification
for officers and directors of the Company and the procedures for
determining entitlement to indemnification:
Section 4.
Service
at the Request or Direction of the
Company
.
No indemnification shall be provided
to an Officer or Non-Officer Employee with respect to serving of
having served in any of the capacities described in
Section 2(c) or 3(c) above unless the following two
conditions are met: (a) such service was requested or
directed in each specific case by vote of the Board of Directors
prior to the occurrence of the event to which the
indemnification relates, and (b) the Company maintains
insurance coverage for the type of indemnification sought. In no
event shall the Company be liable for indemnification under
Section 2(c) or 3(c) above for any amount in excess of the
proceeds of insurance received with respect to such coverage as
the Company in its discretion may elect to carry. The Company
may but shall not be required to maintain insurance coverage
with respect to indemnification under Section 2(c) or 3(c)
above. Notwithstanding any other provision of this
Section 4, but subject to Section 5 of this
Article VI, the Board of Directors may provide an Officer
or Non-Officer Employee with indemnification under
Section 2(c) or 3(c) above as to a specified Proceeding
even if one or both of the two conditions specified in this
Section 4 have not been met and even if the amount of the
indemnification exceeds the amount of the proceeds of any
insurance which the Company may have elected to carry, provided
that the Board of Directors in its discretion determines it to
be in the best interests of the Company to do so.
Section 5.
Good
Faith
.
No indemnification shall be provided
to an Officer or to a Non-Officer Employee with respect to a
matter as to which such person shall have been adjudicated in
any Proceeding not to have acted in good faith in the reasonable
belief that the action of such person was in the best interests
of the Company. In the event that a Proceeding is compromised or
settled so as to impose any liability or obligation upon an
Officer or Non-Officer Employee, no indemnification shall be
provided to said Officer or Non-Officer Employee with respect to
a matter if there be a determination that with respect to such
matter such person did not act in good faith in the reasonable
belief that the action of such person was in the best interests
of the Company. The determination shall be made by a majority
vote of those Directors who are not involved in such Proceeding.
However, if more than half of the Directors are involved in such
Proceeding, the determination shall be made by a majority vote
of a committee of three disinterested Directors chosen by the
disinterested Directors at a regular or special meeting. If
there are fewer than three (3) disinterested Directors, the
determination shall be based upon the opinion of the
Companys regular outside counsel.
Section 6.
Prior
to Final Disposition
.
Unless otherwise
provided by the Board of Directors or by the committee pursuant
to the procedure specified in Section 5 of this
Article VI, any indemnification provided
II-2
for under this Article VI shall include payment by the
Company of Expenses incurred in defending a Proceeding in
advance of the final disposition of such Proceeding upon receipt
of an undertaking by the Officer or Non-Officer Employee seeking
indemnification to repay such payment if such Officer or
Non-Officer Employee shall be adjudicated or determined to be
not entitled to indemnification under this Article VI.
Section 7.
Insurance
.
The
Company may purchase and maintain insurance to protect itself
and any Officer or Non-Officer Employee against any liability of
any character asserted against or incurred by the Company or any
such Officer or Non-Officer Employee, or arising out of any such
status, whether or not the Company would have the power to
indemnify such person against such liability by law or under the
provisions of this Article VI.
Section 8.
Other
Indemnification Rights
.
Nothing in this
Article VI shall limit any lawful rights to indemnification
existing independently of this Article VI.
The following is a list of exhibits which are either filed or
incorporated by reference as part of this Registration Statement
on
Form S-3.
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Exhibit No.
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Description of Exhibit
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(4
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.1)
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Specimen certificate of shares of common stock of the Company
(Filed as Exhibit 4.1 to the Companys Current Report
on
Form 8-K
filed July 2, 2001, (File Number
000-32955)
and incorporated herein by reference)
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(4
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.2)
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Renewed Rights Agreement dated as of November 17, 2005,
between LSB Corporation and Computershare Trust Company,
N.A., as Rights Agent (Filed as Exhibit 4.1 to the
Companys Current Report on
Form 8-K
filed January 31, 2006, and incorporated herein by
reference)
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(5
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.1)
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Opinion of Nutter McClennen & Fish LLP*
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(23
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.1)
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Consent of Wolf & Company, P.C.*
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(23
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.2)
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Consent of Nutter McClennen & Fish LLP (included in
Exhibit 5.1)*
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(24
|
.1)
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Power of Attorney (contained on signature page)*
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(a) The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
i. To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
ii. To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
iii. To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided however
, that paragraphs (a)(1)(i), (a)(1)(ii)
and (a)(1)(iii) of this section do not apply if the information
required to be included in a post-effective amendment by those
paragraphs is contained in reports filed with or furnished to
the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement, or
is contained in a form of prospectus filed pursuant to
Rule 424(b) that is part of the registration statement.
II-3
2. That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
4. For the purpose of determining liability under the
Securities Act of 1933 to any purchaser, each prospectus filed
pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and
included in the registration statement as of the date it is
first used after effectiveness. Provided, however, that no
statement made in a registration statement or prospectus that is
part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or
prospectus that was part of the registration statement or made
in any such document immediately prior to such date of first use.
5. That, for the purpose of determining liability of the
registrant under the Securities Act of 1933 to any purchaser in
the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered
or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
i. Any preliminary prospectus or prospectus of the
undersigned registrant relating to the offering required to be
filed pursuant to Rule 424;
ii. Any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used
or referred to by the undersigned registrant;
iii. The portion of any other free writing prospectus
relating to the offering containing material information about
the undersigned registrant or its securities provided by or on
behalf of the undersigned registrant; and
iv. Any other communication that is an offer in the
offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrants annual report
pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plans annual report pursuant
to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on
Form S-3
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in
North Andover, Commonwealth of Massachusetts, on June 2,
2009.
LSB CORPORATION
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By:
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/s/ Gerald
T. Mulligan
|
Gerald T. Mulligan,
President and Chief Executive Officer
POWER OF
ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose
signature appears below hereby constitutes and appoints Gerald
T. Mulligan, Diane L. Walker and Michael K. Krebs, and each of
them, with full power to act without the others, as his or her
true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or
her name, place and stead, in any and all capacities, to sign
any and all amendments (including post-effective amendments) to
this registration statement, and to file the same, with all
exhibits thereto and all documents in connection therewith, with
the Securities and Exchange Commission, granting to said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing
necessary or appropriate to be done in connection therewith, as
fully to all intents and purposes as he or she might or could do
in person, thereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their substitute
or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
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Signature
|
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Title
|
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Date
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/s/ Gerald
T. Mulligan
Gerald
T. Mulligan
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President, Chief Executive Officer and Director (Principal
Executive Officer)
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May 28, 2009
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/s/ Diane
L. Walker
Diane
L. Walker
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Executive Vice President, Treasurer and Chief Financial Officer
(Principal Financial and Principal Accounting Officer)
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May 28, 2009
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/s/ Thomas
J. Burke
Thomas
J. Burke
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Chairman of the Board
Director
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May 28, 2009
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/s/ John
P. Bachini, Jr.
John
P. Bachini, Jr.
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Director
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May 28, 2009
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/s/ Kathleen
Boshar Reynolds
Kathleen
Boshar Reynolds
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Director
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|
May 28, 2009
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/s/ Malcolm
W. Brawn
Malcolm
W. Brawn
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Director
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May 28, 2009
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II-5
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Signature
|
|
Title
|
|
Date
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/s/ Richard
Hart Harrington
Richard
Hart Harrington
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Director
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May 28, 2009
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/s/ Robert
F. Hatem
Robert
F. Hatem
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Director
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May 28, 2009
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/s/ Marsha
A. McDonough
Marsha
A. McDonough
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Director
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May 28, 2009
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/s/ Fred
P. Shaheen
Fred
P. Shaheen
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Director
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May 28, 2009
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II-6
EXHIBIT INDEX
|
|
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Exhibit No.
|
|
Description of Exhibit
|
|
|
(4
|
.1)
|
|
Specimen certificate of shares of common stock of the Company
(Filed as Exhibit 4.1 to the Companys Current Report
on
Form 8-K
filed July 2, 2001, (File Number
000-32955)
and incorporated herein by reference)
|
|
(4
|
.2)
|
|
Renewed Rights Agreement dated as of November 17, 2005,
between LSB Corporation and Computershare Trust Company,
N.A., as Rights Agent (Filed as Exhibit 4.1 to the
Companys Current Report on
Form 8-K
filed January 31, 2006, and incorporated herein by
reference)
|
|
(5
|
.1)
|
|
Opinion of Nutter McClennen & Fish LLP*
|
|
(23
|
.1)
|
|
Consent of Wolf & Company, P.C.*
|
|
(23
|
.2)
|
|
Consent of Nutter McClennen & Fish LLP (included in
Exhibit 5.1)*
|
|
(24
|
.1)
|
|
Power of Attorney (contained on signature page)*
|
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