SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
(Rule 13d-101)
(Amendment No. 2)
Under the Securities Exchange Act of 1934
LSB INDUSTRIES, INC.
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(Name of Issuer)
Shares of Common Stock, par value $0.10 per share
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(Title of Class of Securities)
502160104
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(CUSIP NUMBER)
Jayhawk Capital Management, L.L.C.
Attention: Kent C. McCarthy
8201 Mission Road, Suite 110
Prairie Village, Kansas 66208
Tel. No.: (913) 642-2611
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 1, 2002, June 1, 2002, October 31, 2002 and March 27, 2003*
---------------------------------------------------------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g) check the following box
[_]
(* See response to item 3.)
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934, as amended (the "Act"), or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act.
---------------
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CUSIP No. 502160104 13D/A
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1 NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Kent C. McCarthy
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF, AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) or 2(e) [_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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7 SOLE VOTING POWER
2,762,081 (includes 1,401,081 shares of common stock
receivable upon conversion of 323,650 shares of
$3.25 Convertible Exchangeable Class C Preferred
NUMBER OF Stock, Series 2, and 112,500 shares of common stock
SHARES that may be acquired upon exercise of warrants
BENEFICIALLY exercisable within 60 days of the date of this
OWNED BY Statement)
EACH ---------------------------------------------------------
REPORTING 8 SHARED VOTING POWER
PERSON WITH
0
---------------------------------------------------------
9 SOLE DISPOSITIVE POWER
2,762,081 (includes 1,401,081 shares of common stock
receivable upon conversion of 323,650 shares of
$3.25 Convertible Exchangeable Class C Preferred
Stock, Series 2, and 112,500 shares of common stock
that may be acquired upon exercise of warrants
exercisable within 60 days of the date of this
Statement)
---------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,762,081 (includes 1,401,081 shares of common stock receivable upon
conversion of 323,650 shares of $3.25 Convertible Exchangeable Class C
Preferred Stock, Series 2, and 112,500 shares of common stock that may be
acquired upon exercise of warrants exercisable within 60 days of the date
of this Statement)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.8%
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14 TYPE OF REPORTING PERSON*
IN
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*SEE INSTRUCTIONS BEFORE FILLING OUT.
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CUSIP No. 502160104 13D/A
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1 NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE
PERSONS (ENTITIES ONLY)
Jayhawk Capital Management, L.L.C. (48-1172612)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC, AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT [_]
TO ITEM 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
2,458,050 (includes 1,298,050 shares of common
stock receivable upon conversion of 299,850 shares
of $3.25 Convertible Exchangeable Class C
Preferred Stock, Series 2, and 112,500 shares of
common stock that may be acquired upon exercise of
warrants exercisable within 60 days of the date of
this Statement)
NUMBER OF ------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
EACH ------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
2,458,050 (includes 1,298,050 shares of common
stock receivable upon conversion of 299,850 shares
of $3.25 Convertible Exchangeable Class C
Preferred Stock, Series 2, and 112,500 shares of
common stock that may be acquired upon exercise of
warrants exercisable within 60 days of the date of
this Statement)
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,458,050 (includes 1,298,050 shares of common stock
receivable upon conversion of 299,850 shares of $3.25
Convertible Exchangeable Class C Preferred Stock, Series 2,
and 112,500 shares of common stock that may be acquired upon
exercise of warrants exercisable within 60 days of the date
of this Statement)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.8%
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14 TYPE OF REPORTING PERSON*
IA
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*SEE INSTRUCTIONS BEFORE FILLING OUT
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CUSIP No. 502160104 13D/A
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1 NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE
PERSONS (ENTITIES ONLY)
Jayhawk Institutional Partners, L.P. (48-1172611)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT [_]
TO ITEM 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
1,850,692 (includes 690,692 shares of common stock
receivable upon conversion of 159,550 shares of
$3.25 Convertible Exchangeable Class C Preferred
Stock, Series 2, and 112,500 shares of common
stock that may be acquired upon exercise of
warrants exercisable within 60 days of the date of
this Statement)
NUMBER OF ------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
EACH ------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
1,850,692 (includes 690,692 shares of common stock
receivable upon conversion of 159,550 shares of
$3.25 Convertible Exchangeable Class C Preferred
Stock, Series 2, and 112,500 shares of common
stock that may be acquired upon exercise of
warrants exercisable within 60 days of the date of
this Statement)
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,850,692 (includes 690,692 shares of common stock
receivable upon conversion of 159,550 shares of $3.25
Convertible Exchangeable Class C Preferred Stock, Series 2,
and 112,500 shares of common stock that may be acquired upon
exercise of warrants exercisable within 60 days of the date
of this Statement)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.0%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT
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CUSIP No. 502160104 13D/A
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1 NAME OF REPORTING PERSONS, I.R.S. IDENTIFICATION NOS. OF ABOVE
PERSONS (ENTITIES ONLY)
Jayhawk Investments, L.P. (48-1172620)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_]
(b) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT [_]
TO ITEM 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
370,562 (includes 370,562 shares of common stock
receivable upon conversion of 85,600 shares of
$3.25 Convertible Exchangeable Class C Preferred
Stock, Series 2)
NUMBER OF ------------------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
EACH ------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
370,562 (includes 370,562 shares of common stock
receivable upon conversion of 85,600 shares of
$3.25 Convertible Exchangeable Class C Preferred
Stock, Series 2)
------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
370,562 (includes 370,562 shares of common stock
receivable upon conversion of 85,600 shares of $3.25
Convertible Exchangeable Class C Preferred Stock, Series 2)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.9%
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14 TYPE OF REPORTING PERSON*
PN
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*SEE INSTRUCTIONS BEFORE FILLING OUT
SCHEDULE 13D/A
This Amendment No. 2 to Schedule 13D (the "Amendment") is being filed
on behalf of Jayhawk Institutional Partners, L.P., a Delaware limited
partnership ("Jayhawk Institutional"), Jayhawk Investments, L.P., a Delaware
limited partnership ("Jayhawk Investments"), their general partner, Jayhawk
Capital Management, L.L.C., a Delaware limited liability company ("Jayhawk"),
and its manager, Kent C. McCarthy. This Schedule 13D amends the initial
statement on Schedule 13D (the "Original 13D") relating to shares of common
stock of LSB Industries, Inc., a Delaware corporation (the "Issuer") as filed
with the Securities and Exchange Commission (the "Commission") on January 18,
2001, as amended by Amendment No. 1 filed with the Commission on March 22, 2002
(the "Original 13D"). The Original 13D is hereby amended as follows:
Item 3. Source and Amount of Funds
Item 3 of the Original 13D is hereby amended and restated in its
entirety to read as follows:
As of February 18, 2002, Jayhawk Investments had invested $768,760 in
shares of Common Stock and shares of $3.25 Convertible Exchangeable Class C
Preferred Stock ("Class C Preferred Stock"); Jayhawk Institutional had invested
$1,388,502 in shares of Common Stock and Class C Preferred Stock; and Mr.
McCarthy had invested $435,935 in shares of Common Stock and Class C Preferred
Stock. The above amounts include any brokerage commissions incurred in the
investments. The source of these funds was the working capital of each entity
and the personal funds of Mr. McCarthy, and reported as such in Amendment No. 1
to the Original 13D filed March 22, 2002 (Amendment No. 1).
On March 27, 2003, Jayhawk Institutional purchased 450,000 shares of
Common Stock and warrants to purchase 112,500 shares of Common Stock for an
aggregate purchase price of $1,570,500. The source of funds for this transaction
was the working capital of Jayhawk Institutional.
*Kent McCarthy is the manager and sole member of Jayhawk, the General
Partner and Manager for joint filers Jayhawk Institutional and Jayhawk
Investments, and non-filer Lucky Henry, L.P., a Delaware Limited Partnership
("Lucky Henry"), an entity formed in 2002. Since February 18, 2002, except for
the March 27, 2003 acquisition, Kent McCarthy's over-all beneficial ownership
interest in the Issuer did not change from the 16.5% noted in Amendment No. 1,
although a small number of shares were sold (2,500 Shares of Common Stock) and a
small number of shares were gifted to charity (1,200 Shares of Class C Preferred
Stock, Series 2 (the "Class C Preferred Stock")). However, shares of Common
Stock and Class C Preferred Stock were transferred between Kent McCarthy,
Jayhawk Institutional, Jayhawk Investments and Lucky Henry, with appropriate
adjustments noted to capital accounts related to Kent McCarthy and Jayhawk
without the direct transfer of any funds. These transfers occurred on May 1,
2002, June 1, 2002 and October 31, 2002, and were not believed to be of such a
nature to require the filing of an amendment to the 13D since, as of the date of
the transfers, Kent McCarthy and Jayhawk combined were the exclusive partners in
Jayhawk Institutional and Lucky Henry, and combined held approximately 99% of
the partnerships interests in Jayhawk Investments.
A statement showing all the sales, gifts and transfers by the reporting
parties of the Issuers Common Stock and Class C Preferred Stock since February
18, 2002, is attached hereto as Annex A.
Item 5. Interest in Securities of the Issuer
Item 5 of the Original 13D is hereby amended and restated in its entirety
to read as follows:
(a) As of the date hereof, Mr. McCarthy beneficially owns 2,762,081 shares
of Common Stock (which includes 1,401,081 shares of Common Stock receivable upon
conversion of 323,650 shares of Class C Preferred Stock and 112,500 shares of
Common Stock that may be acquired upon exercise of warrants exercisable within
60 days of the date of this statement), which represents 19.8% of the Issuer's
outstanding shares of Common Stock, which such percentage was calculated by
dividing (i) the 2,762,081 shares beneficially owned by Mr. McCarthy by (ii) the
sum of (A) 11,964,000 shares of Common Stock outstanding as of September 30,
2002 based upon the Issuer's Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on November 19, 2002, (B) the 450,000 shares
of Common Stock issued to Jayhawk Institutional on March 27, 2003, (C) the
1,401,081 shares of Common Stock receivable upon conversion of the Class C
Preferred Stock and (D) the 112,500 shares of Common Stock issuable upon the
exercise of warrants.
As of the date hereof, Jayhawk beneficially owns 2,458,050 shares of Common
Stock (which includes 1,298,050 shares of Common Stock receivable upon
conversion of 299,850 shares of $3.25 convertible exchangeable class C Preferred
Stock and 112,500 shares of Common Stock that may be acquired upon exercise of
warrants exercisable within 60 days of the date of this statement), which
represents 17.8% of the Issuer's outstanding shares of Common Stock, which such
percentage was calculated by dividing (i) the 2,458,050 shares beneficially
owned by Jayhawk by (ii) the sum of (A) 11,964,000 shares of common stock
outstanding as of September 30, 2002 based upon the Issuer's Quarterly Report on
Form 10-Q filed with the Securities and Exchange Commission on November 19,
2002, (B) the 450,000 shares of Common Stock issued to Jayhawk Institutional on
March 27, 2003, (C) the 1,298,050 shares of Common Stock receivable upon
conversion of the Class C Preferred Stock and (D) the 112,500 shares of Common
Stock issuable upon the exercise of warrants.
As of the date hereof, Jayhawk Institutional beneficially owns 1,850,692
shares of Common Stock (which includes 690,692 of Common Stock receivable upon
conversion of 159,550 shares of Class C Preferred Stock), which represents 14.0%
of the Issuer's outstanding shares of Common Stock, which such percentage was
calculated by dividing (i) the 1,850,692 shares beneficially owned by Jayhawk
Institutional by (ii) the sum of (A) 11,964,000 shares of Common Stock
outstanding as of September 30, 2002 based upon the Issuer's Quarterly Report on
Form 10-Q filed with the Securities and Exchange Commission on November 19,
2002, (B) the 450,000 shares of Common Stock issued to Jayhawk Institutional on
March 27, 2003, (C) the 690,692 shares of Common Stock receivable upon
conversion of the Class C Preferred Stock and (D) the 112,500 shares of Common
Stock issuable upon the exercise of warrants.
As of the date hereof, Jayhawk Investments beneficially owns 370,562
shares of Common Stock (which includes 370,562 shares of Common Stock receivable
upon conversion of 85,600 shares of Class C Preferred Stock), which represents
2.9% of the Issuer's outstanding shares of Common Stock, which such percentage
was calculated by
dividing (i) the 370,648 shares beneficially owned by Jayhawk Investments by
(ii) the sum of (A) 11,964,000 shares of Common Stock outstanding as of
September 30, 2002 based upon the Issuer's Quarterly Report on Form 10-Q filed
with the Securities and Exchange Commission on November 19, 2002, (B) the
450,000 shares of Common Stock issued to Jayhawk Institutional on March 27, 2003
and (C) the 370,562 shares of Common Stock receivable upon conversion of the
Class C Preferred Stock.
(b) Mr. McCarthy, as manager of Jayhawk, has the sole power to vote and
dispose of the Shares beneficially owned by Jayhawk, Jayhawk Investments,
Jayhawk Institutional and Lucky Henry.
(c) The transactions made, including sales, gifts and transfers, by Kent
McCarthy, Jayhawk, Jayhawk Institutional and Jayhawk Investments in the Issuer's
securities since the filing of Amendment No. 1, are listed on Annex A attached
hereto and made a part hereof. No other transactions in the Issuer's securities
were made by Jayhawk Institutional, Jayhawk Investments, Jayhawk or Mr. McCarthy
during the referred to period.
(d) Not Applicable.
(e) Jayhawk Investments' beneficial ownership in the Issuer dropped
below 5% on May 1, 2002, when it transferred Class C Preferred Stock to Jayhawk
Institutional and Lucky Henry.
Signature
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: March 27, 2003 JAYHAWK INSTITUTIONAL PARTNERS, L.P.
By: Jayhawk Capital Management, L.L.C.,
Its general partner
By: /s/ Kent C. McCarthy
--------------------
Kent C. McCarthy, Manager
JAYHAWK INVESTMENTS, L.P.
By: Jayhawk Capital Management, L.L.C.,
Its general partner
By: /s/ Kent C. McCarthy
--------------------
Kent C. McCarthy, Manager
JAYHAWK CAPITAL MANAGEMENT, L.L.C.
By: /s/ Kent C. McCarthy
--------------------
Kent C. McCarthy, Manager
/s/ Kent C. McCarthy
--------------------
Kent C. McCarthy
RIDER A
ANNEX A
Transaction Buy/Sell/Transfer Quantity Transaction/Fair Market
Date (shares) Value per Share
---------- ----------- ---------- ---------------
3/20/02 Kent McCarthy gifted to 1,000 Class C Preferred $16.00
charity
5/01/02 Transfer from Jayhawk Investments, 54,700 Class C Preferred $18.25
LP to Lucky Henry, LP
5/1/02 Transfer from Jayhawk Investments, 109,550 Class C Preferred $18.25
LP to Jayhawk Institutional
Partners, LP
6/01/02 Transfer from Kent McCarthy to 50,000 Class C Preferred $22.50
Jayhawk Institutional Partners, LP
7/29/02 Kent McCarthy gifted to 200 Class C Preferred $21.50
charity
8/13/02 Sale by Jayhawk Institutional 1,900 Common $ 3.10
Partners, LP
9/17/02 Sale by Jayhawk Institutional 600 Common $ 3.08
Partners, LP
10/31/02 Transfer from Jayhawk 200,000 Common $ 2.80
Institutional Partners, LP to Kent
McCarthy
3/27/03 Purchase by Jayhawk 450,000 Common plus Aggregate
Institutional Partners, LP warrants to $1,570,500
from the Company purchase 112,000 Common
(exercise price $3.49
per share)