SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

OMB APPROVAL

OMB Number:			3235-0287
Estimated average burden
hours per response:			0.5

Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

SHEAR DAVID MICHAEL

(Last)

(First)

(Middle)

16 SOUTH PENNSYLVANIA AVENUE

(Street)

OKLAHOMA CITY

73107

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
LSB INDUSTRIES INC [ LXU ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

	Director	10% Owner
X	Officer (give title below)	Other (specify below)
	Senior VP/General Counsel/Sec

3. Date of Earliest Transaction (Month/Day/Year)
08/25/2006

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	08/25/2006		G		11,146	A	$0	11,146	D
Common Stock	08/25/2006		F		11,146	D	$10.04	0	D
Common Stock	08/25/2006		F		6,268	D	$10.04	0	I	By Trust⁽¹⁾⁽²⁾
Common Stock	08/25/2006		M		42,385	A	$4.125	48,385	I	By Trust and Spouse's Trust⁽¹⁾⁽²⁾

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Incentive Stock Option⁽³⁾	$4.125	08/25/2006		M			42,385	⁽³⁾	11/19/2006	Common Stock	42,385	$0⁽³⁾	17,615	D

Explanation of Responses:

1. The 6,268 shares transferred to the issuer as partial consideration for the incentive stock option exercise disclosed in the report were owned by Mr. Shear's revocable trust (the "Shear Trust"), of which Mr. Shear is the grantor and trustee. The shares issued upon such exercise were contributed by Mr. Shear to a joint account owned by the Shear Trust and the revocable trust of Mr. Shear's wife, Heidi Brown Shear (the "Brown Trust"). Heidi Brown Shear is the grantor and trustee of the Brown Trust. The outstanding shares jointly owned by the two trusts prior to this exercise was 6,000 shares. These shares are currently beneficially owned by the Shear Trust and the Brown Trust as joint owners.

2. This amount does not include, and Mr. Shear disclaims beneficial ownership of (a) shares held by two trust established for the benefit of each of the son and daughter of Mr. Shear and Heidi Brown Shear for which Heidi Brown Shear is trustee and exercises investment control over the trusts' portfolio securities, and (b) shares held by three trusts, each one established for the benefit of one of the three children of Jack E. Golsen and Sylvia H. Golsen for which Heidi Brown Shear is trustee and exercises investment control over the trusts' portfolio securities.

3. Incentive Stock Options ("ISO") granted by LSB Industries, Inc. (the "Issuer ") to Mr. Shear under the Issuer's Incentive Stock Option Plans. Each ISO allows the purchase of shares of the Issuer's common stock upon the exercise thereof. Each ISO is for a period of ten years from the date of grant and fully vested on or before December 31, 2005. As of the date of this report, the total number of shares underlying the ISOs held by Mr. Shear is 83,159.

	David M. Shear	08/29/2006
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.