Stock Ownership Guidelines
Director | Executive
“Committee” means the Compensation & Human Resources Committee of the Board of Directors of the Company.
“Company” means Lennox International Inc.
“Covered Person” means the Company’s Chief Executive Officer, each Executive Vice President, and executive officers subject to the reporting requirements of Section 16 of the Securities Exchange Act of 1934 (“Section 16 Officer”) elected by the Board of Directors.
“Eligible Equity” means common stock and restricted stock units of the Company beneficially owned by a Director. Eligible equity does not include performance stock units, stock appreciation rights, or stock options.
The Chief Executive Officer must acquire and hold, at a minimum, Eligible Equity in an amount equal to five times his/her annual base salary. Each Executive Vice President must acquire and hold, at a minimum, Eligible Equity in an amount equal to three times his/her annual base salary. Each other Section 16 Officer elected by the Board of Directors must acquire and hold, at a minimum, Eligible Equity in an amount equal to 1.5 times his/her annual base salary.
The value of Eligible Equity will be calculated annually as of December 31 using an average of the daily closing prices of the Company’s stock for the full calendar year, as reported by the New York Stock Exchange. The annual calculation will use a Covered Person’s annual base salary in effect as of December 31. Covered Persons will have five years from the later of January 1, 2010, or the date they are appointed to office, to reach the required level of Eligible Equity.
Failure to Comply
The Committee has responsibility to administer these Guidelines. If a Covered Person fails to meet these Guidelines, the Committee will examine the totality of the circumstances and determine any appropriate action or corrective measures, including whether circumstances exist to allow a Covered Person additional time to achieve the required ownership level.