Document:

Filed by Bowne Pure Compliance

Exhibit 10.1

AGREEMENT

THIS AGREEMENT (the “Agreement”), by and between S1 Corporation (the “Company”) and Paul
Parrish (“You” or “Your”) (collectively, the “Parties”), is entered into as of December 17, 2008
and is effective as of Your first day of employment with the Company (your first day of employment
shall be determined by the Company and is currently expected to be on or about January 12, 2009)
(the “Effective Date”).

WHEREAS, the Parties desire to enter into this Agreement to express the terms and conditions
in the event of Your termination of employment from the Company (or any of its affiliates) as
described herein;

NOW, THEREFORE, in consideration of the mutual agreements in this Agreement, the Parties agree
as follows:

1. At-Will Employment. This Agreement does not create a contract for employment or a
contract for benefits. Your employment with the Company shall be and remain at all times an
at-will relationship. This means that at either Your option or the Company’s option, Your
employment may be terminated at any time, with or without Cause, and with or without notice. This
Agreement does not alter the at-will employment relationship.

2. Compensation Upon Termination. Subject to the terms and conditions of this
Agreement:

(a) Death. If Your employment with the Company (or any of its affiliates) is
terminated as a result of Your death, the Company shall pay Your estate, or as may be directed by
the legal representatives of Your estate, (i) Your base salary due through the date of termination,
and (ii) within thirty (30) days following Your date of termination, a pro rata portion of the
annual bonus that would have been payable to You for the calendar year of termination if Your
employment had not terminated (calculated based upon actual results through Your date of
termination and based upon budget for the remainder of the period and pro rated for the portion of
the year during which You were employed).

(b) Disability. If Your employment with the Company (or any of its affiliates) is
terminated as a result of You being substantially unable to perform the material duties of Your
then current position with the Company (or any of its affiliates) by reason of illness, physical or
mental disability or other similar incapacity, which inability shall continue for three consecutive
months (provided, that until such termination, You shall continue to receive Your then current
compensation and benefits, reduced by any benefits payable to You or under any disability insurance
policy or plan applicable You), the Company shall pay You (i) Your base salary due through the date
of termination, and (ii) within thirty (30) days following Your date of termination, a pro rata
portion of the annual bonus that would have been payable to You for the calendar year of
termination if Your employment had not terminated (calculated based upon actual results through
Your date of termination and based upon budget for the remainder of the period and pro rated for
the portion of the year during which You were employed); provided, that payments so made to
You with respect to any period that You are substantially unable to perform the material duties of
Your then current position with the Company (or any of its affiliates) by reason of illness,
physical or mental illness or other similar incapacity shall be reduced by the sum of the amounts,
if any, payable to You by reason of such disability, at or prior to the time of any such payment,
under any disability insurance policy or benefit plan and which amounts have not previously been
applied to reduce any such payment.

(c) Termination by the Company for Cause or by You without Good Reason. If the
Company (or any of its affiliates) terminates Your employment for Cause or You terminate Your
employment without Good Reason, the Company shall pay You Your base salary due through the date of
termination and shall have no further obligations to You. In the event the Company intends to
terminate You for Cause, You shall have a reasonable opportunity, together with Your counsel, to be
heard before the Board of Directors of the Company before such termination.

(d) Termination by the Company without Cause or by You with Good Reason. If (i) the
Company (or any of its affiliates) terminates your employment without Cause, or (ii) You terminate
Your employment for Good Reason, then the Company shall:

 

 

 

(A) pay You (i) in equal installments as of the 1st and 15th day of each
month during the 12-month period commencing on Your date of termination (the “Severance Period”),
an aggregate amount equal to Your then current base salary, (ii) within thirty (30) days following
Your date of termination, a pro rata portion of the annual bonus that would have been payable to
You for the calendar year of termination if Your employment had not terminated (calculated based
upon actual results through Your date of termination and based upon budget for the remainder of the
period and pro rated for the portion of the year during which You were employed), and (iii) within
thirty (30) days following Your date of termination, an aggregate amount equal to the average
annual bonus actually paid to You for the immediately prior three calendar years; provided,
however, if You have been employed at the Company for a shorter period than would allow for the
foregoing calculation, the payment shall be calculated by taking the average annual bonus paid to
You in the actual calendar years prior to the calendar year in which You are terminated, divided by
the number of such years;

(B) reimburse You for any COBRA premiums You pay for You and any of Your dependents during the
Severance Period, if and to the extent You and/or Your dependents are entitled to COBRA
continuation coverage under the Company’s major medical group plan in which You and/or Your
dependents participated immediately prior to the date of termination, provided, however, that
notwithstanding anything in this subsection to the contrary, all other terms and provisions of the
Company major medical group plan governing Your rights and Your dependent’s rights under COBRA
shall apply; and

(C) if Your termination occurs within two (2) years following a Change in Control (or before a
Change in Control has occurred, but after the Company has commenced negotiations of a transaction
that results in a Change in Control), cause all outstanding options to purchase common stock of the
Company and shares of restricted stock, if any, then held by You to be fully vested and exercisable
as of the date of termination.

3. Release Obligations. The Company’s obligation to pay You the separation payments
set forth in Section 2(d) shall be conditioned upon Your execution, compliance with, and
non-revocation of, a valid, binding and irrevocable Separation & Release Agreement in a form
prepared by the Company in its sole and absolute discretion, which includes, but is not limited to,
Your release of the Company and its officers, directors, employees, stockholders and affiliates
from any and all liability and claims of any kind and Your confirmation of the Company’s right to
continued performance by You of Your obligations under the Covenants Agreement (defined below)
during the period following the termination of Your employment.

4. Withholding. All payments made pursuant to this Agreement will be subject to
applicable withholdings, including taxes and Social Security.

5. Definitions.

(a) “Cause” means (i) the indictment by a grand jury or conviction of a felony or a
crime involving moral turpitude (excluding a traffic violation not involving any period of
incarceration) or the willful commission of any other act or omission involving dishonesty or fraud
with respect to, and materially adversely affecting the business affairs of, the Company or any of
its subsidiaries or any of their customers or suppliers, (ii) conduct tending to bring the Company
or any of its subsidiaries into public disgrace or disrepute that is determined by the Company to
cause or be reasonably likely to cause substantial injury to the business and operations of the
Company or such subsidiary, (iii) substantial and repeated failure to perform duties, including but
not limited to, achieving quarterly goals, of the position held by You as reasonably directed by
the Company (other than any such failure resulting from Your incapacity due to injury or illness),
and such failure is not cured within 30 days after You receive written notice thereof from the
Company that specifically identifies the manner in which the Company believes You have not
substantially performed Your duties, (iv) gross negligence or willful misconduct with respect to
the Company or any of its subsidiaries that causes substantial and material injury to the business
and operations of the Company or such subsidiary or (v) any material breach of the Covenants
Agreement. For purposes of this provision, no act or failure to act on Your part shall be
considered “willful” unless it is done, or omitted to be done, by You in bad faith or without
reasonable belief that Your action or omission was in the best interests of the Company. Any act
or failure to act based upon authority given pursuant to a resolution duly adopted by the Board of
Directors of the Company or based upon advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by You in good faith and in the best interests of the
Company;

 

 

 

(b) “Change in Control” means the earliest to occur of the following: (i) any person
(other than a corporation (a “Holding Company”) all of the common stock of which is owned,
immediately after the transaction, by persons who owned more than 50 percent of the voting shares
of the Company immediately before the transaction) becomes the beneficial owner of 50 percent or
more of the total number of voting shares of the Company; (ii) any person (other than the persons
named as proxies solicited on behalf of the Board) holds revocable or irrevocable proxies, as to
the election or removal of two or more directors of the Company, for more than 50 percent of the
total number of voting shares of the Company; (iii) any person (other than a Holding Company) has
commenced a tender or exchange offer, or entered into an agreement or received an option, to
acquire beneficial ownership of more than 50 percent of the total number of voting shares of the
Company; (iv) there is a sale or other transfer of all or substantially all of the assets of the
Company other than to a Holding Company or a corporation controlled by the Company, or (v) as the
result of, or in connection with, any cash tender or exchange offer, merger, or other business
combination, sale of assets or contested election, or any combination of the foregoing
transactions, the persons who were directors of the Company before such transaction shall cease to
constitute at least a majority of the Board of any successor corporation. In the event that the
Company (or any successor entity) becomes a subsidiary of a Holding Company, references to the
Company in the preceding sentence shall be deemed to be references to the Holding Company.
Notwithstanding the foregoing, a “Change in Control” will not be deemed to have occurred under
clauses (ii) or (iii) above if within 30 days of such action, the Board of Directors of the Company
(by a two-thirds affirmative vote of the directors in office before such action occurred) makes a
determination that such action does not and is not likely to constitute a change in control of the
Company. For purposes of this definition, a “person” includes an individual, corporation,
partnership, trust, association, joint venture, pool, syndicate, unincorporated organization,
joint-stock company, or similar organization or group acting in concert. A person for these
purposes shall be deemed to be a beneficial owner as that term is used in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended;

(c) “Code” means the Internal Revenue Code of 1986, as amended;

(d) “Controlled Group” means the Company and any other entity the employees of which
would be required to be aggregated with the employees of the Company pursuant to Code §414(b), (c),
(m), or (o);

(e) “Good Reason” shall exist if (i) the Company, without Your consent (a) materially
reduces or changes Your reporting, duties and/or job title, provided, however, that where there is
no reduction in Your base salary or annual bonus potential, a material reduction or change in Your
reporting, duties, job title, or responsibilities shall not be determined to be Good Reason under
this Agreement, or (b) requires You to relocate to a place more than 50 miles from Norcross,
Georgia to perform Your duties; (ii) You provide written notice to the Company of such action and
provide the Company with 30 days to remedy such action (the “Cure Period”); (iii) the Company fails
to remedy such action within the Cure Period; and (iv) You elect to resign within 30 days of the
expiration of the Cure Period;

(f) “Separation from Service” means, with respect to You, a “separation from service”
(within the meaning of Code §409A(a)(2)(A)(i) and regulations issued thereunder) of You from all
members of the Controlled Group; and

(g) “Specified Employee” means a “key employee” (within the meaning of Code §416(i)
without regard to Code §416(i)(5) thereof) of any member of the Controlled Group which has stock
which has publicly traded on an established securities market or otherwise. You shall be treated
as being a Specified Employee as of any date occurring during the period beginning April 1 of a
given calendar year and ending on the next following March 31 if You meet the definition of a
Specified Employee in the preceding sentence at any time during the calendar year immediately
preceding such given calendar year.

6. Deferral of Compensation. Notwithstanding any provision of this Agreement to the
contrary, to the extent that (i) any amount(s) would be payable to You under Section 2(a), (b), (c)
or (d) above by reason of Your termination of employment, and (ii) such amount(s) constitute a
“deferral of compensation” within the meaning of Treasury regulations issued under Code §409A as
reasonably determined by the Company, then such amount(s) shall not be paid until You have incurred
a Separation from Service if such termination of employment does not constitute a Separation from
Service. Furthermore, to the extent that (i) any amount(s) would be payable to You within the
first six (6) months following Your Separation from Service on account of Your Separation from
Service,

 

 

 

(ii) You are a Specified Employee as of the date of Your Separation from Service, and (iii)
such amount(s) constitute a “deferral of compensation” within the meaning of Treasury regulations
issued under Code §409A as reasonably determined by the Company, then such amount(s) shall not be
paid and shall instead be held and accumulated and paid as of the date which is six (6) months and
one (1) day after the date of Your Separation from Service. Any amounts paid which are excepted
from being a “deferral of compensation” shall not be subject to the foregoing restrictions. For
all purposes of this Agreement, the right to a series of installment payments shall be treated as a
right to a series of separate payments for purposes of Code §409A.

7. Limitation on Parachute Payments. Notwithstanding any other provision of this
Agreement or of any other agreement, contract, or understanding heretofore or hereafter entered
into by You with the Company or any subsidiary or affiliate, except an agreement, contract, or
understanding hereafter entered into that expressly modifies or excludes application of this
Section (an “Other Agreement”), and notwithstanding any formal or informal plan or other
arrangement for the direct or indirect provision of compensation to You (including groups or
classes of participants or beneficiaries of which You are a member), whether or not such
compensation is deferred, is in cash, or is in the form of a benefit to or for You (a “Benefit
Arrangement”), if You are a “disqualified individual,” as defined in Section 280G(c) of the Code,
no payment or benefit shall be made or provided to You or become vested, exercisable or payable, as
applicable, (i) to the extent that such payment, right to exercise, vesting, or other benefit,
taking into account all other payments, rights, or benefits to or for You, or becoming vested,
exercisable or payable, as the case may be, under this Agreement, all Other Agreements and all
Benefit Arrangements, would cause any such payment, right to exercise, vesting or other benefit to
which You are or would be entitled under this Agreement to be considered a “parachute payment”
within the meaning of Section 280G(b)(2) of the Code as then in effect (a “Parachute Payment”)
and (ii) if, as a result of receiving a Parachute Payment, the aggregate after-tax amounts
received by You under this Agreement, all Other Agreements, and all Benefit Arrangements would be
less than the maximum after-tax amount that could be received by You without causing any such
payment, right to exercise, vesting or other benefit to be considered a Parachute Payment. In the
event that the receipt of any such payment, right to exercise, vesting, or other benefit under this
Agreement, in conjunction with all other rights, payments, or benefits to or for You under any
Other Agreement or any Benefit Arrangement would cause You to be considered to have received a
Parachute Payment under this Agreement that would have the effect of decreasing the after-tax
amount received by You as described in clause (ii) of the preceding sentence, then You shall have
the right, in Your sole discretion, to designate those rights, payments or benefits (or the vesting
or exercisability thereof) under this Agreement, any Other Agreements and any Benefit Arrangements
that should be reduced or eliminated so as to avoid having the right, payment or benefit to You (or
the vesting or exercisability thereof) under this Agreement be deemed to be a Parachute Payment.
All determinations required to be made under this Section, including whether and when a reduction
in rights, payments or benefits (or the vesting or exercisability thereof) is required and the
amount of such reduction and the assumptions to be utilized in arriving at such determination,
shall be made by PricewaterhouseCoopers LLP or such other certified public accounting firm
reasonably acceptable to the Company as may be designated by You in writing (the “Accounting Firm”)
which shall provide detailed supporting calculations both to the Company and You within 15 business
days of the receipt of notice from You or the Company. In the event that the Accounting Firm is
serving as accountant or auditor for the Company or any individual, entity or group effecting a
change in the ownership or effective control of the Company (within the meaning of Section 280G of
the Code), You shall appoint another nationally recognized accounting firm that is reasonably
acceptable to the Company to make the determinations required hereunder (which accounting firm
shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any determination by the Accounting Firm
shall be binding upon the Company and You.

8. Entire Agreement. This Agreement constitutes the entire agreement between the
Parties concerning the subject matter of this Agreement and supersedes any prior communications,
agreements or understandings, whether oral or written, between You and the Company relating to
severance payments of any type or nature. Other than the terms of this Agreement, no other
representation, promise or agreement has been made with You to cause You to sign this Agreement.

9. Confidentiality and Non-Disclosure Agreement. Concurrently with the execution of
this Agreement, the parties are entering into an Employee Covenants Agreement (the “Covenants
Agreement”).

 

 

 

10. Governing Law, Jurisdiction and Venue. The laws of the State of Georgia will
govern this Agreement. If Georgia’s conflict of law rules would apply another state’s laws, the
Parties agree that Georgia law
will still govern. You agree that any claim arising out of or relating to this Agreement will be
brought in a state or federal court of competent jurisdiction in Georgia. You consent to the
personal jurisdiction of the state and/or federal courts located in Georgia. You waive (i) any
objection to jurisdiction or venue, or (ii) any defense claiming lack of jurisdiction or improper
venue, in any action brought in such courts.

11. Waiver. The Company’s failure to enforce any provision of this Agreement will not
act as a waiver of that or any other provision. The Company’s waiver of any breach of this
Agreement will not act as a waiver of any other breach.

12. Severability. The provisions of this Agreement are severable. If any provision
is determined to be invalid, illegal, or unenforceable, in whole or in part, the remaining
provisions and any partially enforceable provisions will remain in full force and effect.

13. Amendments. This Agreement may not be amended or modified except in writing
signed by both Parties.

14. Successors and Assigns. This Agreement will be assignable to, and will inure to
the benefit of, the Company’s successors and assigns, including, without limitation, successors
through merger, name change, consolidation, or sale of a majority of the Company’s stock or assets,
and will be binding upon You and Your heirs and assigns.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement.

	 	 	 	 	 
	 	S1 CORPORATION

 	 
	 	By:  	/s/ Gregory D. Orenstein
 	 
	 	 	Name:  	Gregory D. Orenstein 	 
	 	 	Title:  	SVP, Chief Legal Officer and Secretary 	 
	 
	 	 	 
	 	                                                  /s/ Paul Parrish
 	 
	 	Paul ParrishFiled by Bowne Pure Compliance

Exhibit 10.1

LENNOX INTERNATIONAL INC.

CHANGE IN CONTROL AGREEMENT

THIS CHANGE IN CONTROL AGREEMENT (this “Agreement”), effective as of December 11, 2008 (the
“Effective Date”) is made by and between Lennox International Inc., a Delaware corporation (the
“Company”), and [Name] (“Executive”).

WHEREAS, the Company considers it essential to the best interests of its stockholders to
foster the continued employment of key management personnel;

WHEREAS, the Board (as defined in Appendix A hereto) recognizes that, as is the case
with many publicly held corporations, the possibility of a change in control exists and that such
possibility, and the uncertainty and questions which may raise among management, may result in the
departure or distraction of management personnel to the detriment of the Company and its
stockholders;

WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of key members of the Company’s management,
including Executive, to their assigned duties without the distraction of potentially disturbing
circumstances arising from the possibility of a change in control;

WHEREAS, the Company wishes to enter into this Agreement to protect Executive’s reasonable
expectations regarding compensation and duties if a change in control of the Company occurs,
thereby encouraging Executive to remain in the employ of the Company notwithstanding the
possibility of a change in control;

WHEREAS, it is understood that if Executive has an existing employment agreement (the
“Employment Agreement”) with the Company, then this Agreement is intended to provide certain
protections to Executive that are not afforded by the Employment Agreement; provided however, this
Agreement is not intended to provide benefits that are duplicative of Executive’s current benefits;
and

WHEREAS, upon the Effective Date, this Agreement will supersede all previous agreements, if
any, between the Company and Executive that provides benefits to Executive upon a change in control
of the Company;

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
the Company and Executive hereby agree as follows:

1. Term of Agreement. The term of this Agreement shall commence on the Effective Date and
shall continue in effect through December 31, 2009; provided, however, that commencing on January
1, 2010 and each January 1 thereafter, this Agreement shall automatically be extended for one
additional year (collectively, the “Term”); and further provided, however, that if a Change in
Control (as defined in Appendix A hereto) shall have occurred during the Term, the Term
shall expire two years following the event which constitutes a Change in Control.

 

 

 

2. Company’s Obligations.

2.1 General Obligations. The Company agrees, under the conditions described herein,
to pay Executive the Severance Payments (as defined in Section 5.1 herein) and the other payments
and benefits described herein. No Severance Payments shall be payable under this Agreement unless
there shall have been a termination of Executive’s employment as described in Section 5.1.

2.2 Equity and Other Performance Based Awards. Notwithstanding anything to the
contrary in this Agreement, upon a Change in Control, each and every stock option, stock
appreciation right, restricted stock award, restricted stock unit award, performance share unit
award and other equity-based award and any other performance award granted to Executive that is
outstanding immediately prior to the Change in Control shall (i) immediately vest and become
exercisable and any restrictions on the sale or transfer of such shares (other than any such
restriction arising by operation of law) with respect to such shares shall terminate, and (ii) be
considered to have vested at the highest possible award level with respect to each such award.

2.3 Notice of Change in Control. The Company shall promptly notify Executive in
writing of the occurrence of a Change in Control.

3. Terms of Employment Post-CIC.

3.1 Employment Period. Upon a Change in Control, the Company hereby agrees to
continue Executive in its employ, and Executive hereby agrees to remain in the employ of the
Company, in accordance with, and subject to, the terms and provisions of this Agreement, for the
period commencing on the date upon which there occurs a Change in Control and ending on the second
anniversary of the Change in Control (the “CIC Employment Period”).

3.2 Position and Duties.

(i) During the CIC Employment Period, (A) Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held, exercised and
assigned by or to Executive at any time during the 90-day period immediately preceding the Change
in Control, and (B) Executive’s services shall be performed at the location where Executive was
employed immediately preceding the Change in Control or at another location within 35 miles
thereof.

(ii) During the CIC Employment Period, and excluding any periods of vacation and sick leave to
which Executive is entitled, Executive agrees to devote reasonable attention and time to the
business and affairs of the Company and, to the extent necessary to discharge the responsibilities
assigned to Executive hereunder, to use Executive’s reasonable best efforts to perform faithfully
and efficiently such responsibilities. It is expressly understood and agreed that to the extent
that any activities (including, but not limited to, service on corporate, civic or charitable
boards or committees) have been conducted by Executive prior to the Change in Control, the
continued conduct of such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Change in Control shall not be deemed to interfere with the
performance of Executive’s responsibilities to the Company.

 

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3.3 Compensation and Benefits.

(i) Annual Base Salary. During the CIC Employment Period, Executive shall receive an
annual base salary not less than the base salary in effect immediately prior to the Change in
Control (“Annual Base Salary”), which shall be paid in accordance with the normal business practice
of the Company. During this period, the Annual Base Salary shall be reviewed at least annually and
shall be increased at any time and from time to time as shall be substantially consistent with
increases in base salary generally awarded in the ordinary course of business to executives of the
Company and its affiliated companies. Any increase in Annual Base Salary shall not serve to limit
or reduce any other obligation to Executive under this Agreement. Annual Base Salary shall not be
reduced after any such increase and the term “Annual Base Salary” as utilized in this Agreement
shall refer to Annual Base Salary as so increased. As used in this Agreement, the term “affiliated
companies” shall include, when used with reference to the Company, any company controlled by,
controlling or under common control with the Company.

(ii) Annual Bonus. In addition to Annual Base Salary, Executive shall be awarded, for
each fiscal year or portion thereof during the CIC Employment Period, an annual bonus (the “Annual
Bonus”) in cash equal to no less than the Executive’s target short-term incentive bonus percentage
immediately prior to the Change in Control multiplied by the Executive’s Annual Base Salary,
prorated for any period consisting of less than twelve full months. The Annual Bonus awarded for a
particular fiscal year shall be paid no later than the fifteenth day of the third month following
the end of such year.

(iii) Equity and Performance Based Awards. During the CIC Employment Period,
Executive shall be granted on an annual basis a long-term incentive package consisting of stock
options, stock appreciation rights, restricted stock awards, restricted stock unit awards,
performance share unit awards and other equity-based awards and performance awards, as selected by
the Company, with an aggregate value (as determined by an independent consulting firm selected by
Executive and reasonably acceptable to the Company) that shall be not less than the aggregate value
of the most valuable long-term incentive package awarded Executive in any of the three years
immediately preceding the Change in Control.

(iv) Benefits. During the CIC Employment Period, Executive shall be entitled to the
following benefits, in each such case, no less favorable, in the aggregate, than the most favorable
plan, practice, program or policy of the Company and its affiliates applicable to similarly
situated executives immediately in effect prior to the commencement of the Change in Control or in
effect at any time after the Change in Control:

	 	(a)	 	profit-sharing, savings and
retirement plans that are tax-qualified under Section 401(a) of
the Code (as defined in Appendix A hereto), and all
plans that are supplemental to any such tax-qualified plans; and

	 
	 	(b)	 	welfare benefit plans, practices, policies and programs; and

	 
	 	(c)	 	prompt reimbursement for all
reasonable expenses incurred by Executive; and

	 
	 	(d)	 	fringe benefits and perquisites; and

	 
	 	(e)	 	paid vacation.

 

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4. Termination of Employment for Disability, Death and Cause.

4.1 Disability. During the CIC Employment Period, during any period that Executive
fails to perform Executive’s duties with the Company as a result of incapacity due to physical or
mental illness, the Company shall pay Executive’s salary to Executive at the rate in effect at the
commencement of any such period, together with all compensation and benefits payable to Executive
under the terms of the Company’s written plans as in effect during such period, until Executive’s
employment is terminated by the Company for Disability (as defined in Appendix A hereto).

4.2 Death. During the CIC Employment Period, in the event of Executive’s death, the
Company shall pay to Executive’s estate, Executive’s salary, together with all compensation and
benefits payable to Executive under the terms of the Company’s written plans as in effect
immediately prior to the date of death, through the date Executive’s employment is terminated by
death.

4.3 Cause. During the CIC Employment Period, the Company may terminate Executive’s
employment for Cause (as defined in Appendix A hereto). In such event, the Company shall
pay Executive’s salary, together with all compensation and benefits payable to Executive under the
terms of the Company’s written plans as in effect immediately prior to the date the Executive’s
employment is terminated for Cause.

5. Termination of Employment by Company without Cause or by Executive for Good Reason.

5.1 Payments to Executive. If Executive’s employment is terminated following a Change
in Control and during the CIC Employment Period either (i) by the Company without Cause or (ii) by
Executive with Good Reason (as defined in Appendix A hereto), then the Company shall pay
Executive the amounts, and provide Executive the benefits, set forth in this Section 5.1
(collectively referred to as, “Severance Payments”).

(A) Cash Payment. In lieu of (x) any further salary and bonus payments to
Executive for periods subsequent to the Date of Termination (as defined in Section 7.2
herein), and (y) any severance benefit otherwise payable to Executive under the Employment
Agreement, if any, the Company shall pay to Executive a lump sum severance
payment, in cash, on the date that is six months and two days after Executive’s date of
termination (the “Designated Date”) from the Company equal to:

(i) three (3) times the Executive’s Annual Base Salary, plus

(ii) three (3) times the Executive’s target short-term incentive bonus
percentage immediately prior to the Change in Control or in effect at any time after
the Change in Control, whichever is greater, multiplied by the Executive’s Annual
Base Salary, plus

 

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(iii) an amount equal to Executive’s target short-term incentive bonus
percentage immediately prior to the Change in Control or in effect at any time after
the Change in Control, whichever is greater, multiplied by the Executive’s Annual
Base Salary, prorated for any period consisting of less than twelve full months,
plus

(iv) any deferred compensation previously awarded to or earned by Executive
(together with any accrued interest or earnings thereon); provided any amounts paid
to Executive will be paid in accordance with the applicable deferred compensation
plan, plus

(v) payment in lieu of any accrued but unused vacation as of Executive’s Date
of Termination, plus

(vi) an amount equal to 15% of Executive’s Annual Base Salary (this amount
being paid in lieu of outplacement services), plus

(vii) an amount equal to 45% of Executive’s Annual Base Salary (this amount
being paid in lieu of the perquisites).

(B) Health and Welfare Benefit Plans. For the 36-month period immediately
following the Date of Termination, the Company shall provide Executive and covered dependents
as of Executive’s Date of Termination, medical and health benefits and group life and
supplemental group life substantially similar to those provided to Executive and such covered
dependents immediately prior to the Date of Termination (such continuation of such benefits
shall be hereinafter referred to as “Welfare Benefit Contribution”). The Company shall timely
pay or provide to Executive and/or Executive’s family any other amounts or benefits required
to be paid or provided or which Executive and/or Executive’s family is eligible to receive
pursuant to this Agreement and under any plan, program, policy or practice or contract or
agreement of the Company and its affiliated companies as in effect and applicable generally to
other executives and their families on the Date of Termination.

(C) Non-Qualified Pension. For purposes of calculating benefits under the
Company’s Supplemental Retirement Plan and Profit Sharing Restoration Plan, the Company shall
add an additional three years of vesting service and credited service to Executive’s years of
vesting and credited service, as well as an incremental three years added to Executive’s age.

 

5

 

(D) Certain Pre-Change in Control Terminations. Any provision in this Agreement to
the contrary notwithstanding, if a Change in Control occurs and if Executive’s employment with
the Company has been terminated by the Company without Cause or by Executive with Good Reason
in either case within six (6) months prior to the date on which the Change in Control occurs,
then Executive shall be entitled to the severance and other benefits as if Executive’s
termination had been following a Change in Control, payable on the Designated Date.  Any
amounts to be paid to Executive shall be reduced by and offset dollar-for-dollar by any
severance benefits payable to Executive under the Employment Agreement or any other separation
agreement in connection with such termination.

5.2 Gross-Up Payment.

(A) Whether or not Executive becomes entitled to the Severance Payments, if any payments
or benefits received or to be received by Executive whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, or with any Person
whose actions result in a Change in Control or any Person affiliated with the Company or such
Person (such payments or benefits, excluding the Gross-Up Payment (as defined below), being
hereinafter referred to as the “Total Payments”) are subject to the Excise Tax (any excise tax
imposed under Section 4999 of the Code ), the Company shall pay to Executive an additional
amount (the “Gross-Up Payment”) such that the net amount retained by Executive, after
deduction of any Excise Tax on the Total Payments and any federal, state and local income and
employment taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the Total
Payments.

(B) For purposes of determining whether any of the Total Payments will be subject to the
Excise Tax and the amount of such Excise Tax, (i) all of the Total Payments shall be treated
as “parachute payments” (within the meaning of Code Section 280G(b)(2)) unless, in the opinion
of the Company, such payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Code Section 280G(b)(4)(A), (ii) all “excess parachute
payments” within the meaning of Code Section 280G(b)(1) shall be treated as subject to the
Excise Tax unless, in the opinion of the Company, such excess parachute payments (in whole or
in part) represent reasonable compensation for services actually rendered (within the meaning
of Code Section 280G(b)(4)(B)) in excess of the Base Amount allocable to such reasonable
compensation, or are otherwise not subject to the Excise Tax, and (iii) the value of any
noncash benefits or any deferred payment or benefit shall be determined by the Company in
accordance with the principles of Code Section 280G(d)(3) and (4). The Company and Executive
agree that the determinations described in this Section 4.2(B) shall take the form of a letter
from the Company accompanied by calculations prepared by the Company and certified by a
national accounting firm selected by the Company.

 

6

 

(C) The Gross-Up Payment (or portion thereof) will be paid to Executive on the day of the
payment of the Total Payments (or portion thereof) that give rise to the Excise Tax; provided,
however, that if the amount of such Gross-Up Payment (or portion thereof) cannot be fully
determined on or before the date on which payment is due,
the Company will pay to Executive by such date an amount estimated in good faith by the
Company to be the minimum amount of such Gross-Up Payment (or portion thereof) and will pay
the remainder of such Gross-Up Payment (or portion thereof) (together with interest at the
rate provided in Code Section 1274(b)(2)(B)) as soon as the amount thereof can be determined,
but in no event later than 45 days after complete payment of the Total Payments. Further, in
the event that on the day of payment of the Total Payments (or portion thereof) (or the 45-day
period following such payments), no Gross-Up Payment (or portion thereof) is determined by the
Company to be due and it is subsequently determined that a Gross-Up Payment (or portion
thereof) is owing to Executive, such Gross-Up Payment (or portion thereof) will be made by the
Company to Executive at the date that such Gross-Up Payment amount (or portion thereof) is
determined by the Company to be payable to Executive.

(D) In the event that the Excise Tax is finally determined to be less than the amount
taken into account hereunder in calculating the Gross-Up Payment, Executive shall repay to the
Company, within five business days following the later of the date that the amount of such
reduction in the Excise Tax is fully determined and the date that such amount is fully
refunded to Executive by the Internal Revenue Service, the portion of the Gross-Up Payment
attributable to such reduction (plus that portion of the Gross-Up Payment attributable to the
Excise Tax and federal, state and local income and employment taxes imposed on the Gross-Up
Payment) being repaid by Executive, to the extent that such repayment results in a reduction
in the Excise Tax and a dollar-for-dollar reduction in Executive’s taxable income and wages
for purposes of federal, state and local income and employment taxes. In the event that the
Excise Tax is determined to exceed the amount originally remitted by Executive which was taken
into account hereunder in calculating the Gross-Up Payment and Executive is obliged to remit
additional Excise Taxes, Executive shall provide the Company with written notice advising as
to the amount of additional Excise Taxes which were so remitted and the date on which they
were so remitted. As soon as practicable following receipt of such notice (but not later than
the end of the taxable year following the year in which the additional Excise Taxes were
remitted by Executive), the Company shall make an additional Gross-Up Payment in respect of
such excess (plus any interest, penalties or additions payable by Executive with respect to
such excess Excise Taxes). Executive and the Company shall each reasonably cooperate with the
other in connection with any administrative or judicial proceedings concerning the existence
or amount of liability for Excise Tax with respect to the Total Payments.

6. Non-exclusivity of Rights. Except as provided in Section 5 of this Agreement,
nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in
any plan, program, policy or practice provided by the Company or any of its affiliated companies
and for which Executive may qualify, nor shall anything herein limit or otherwise affect such
rights as Executive may have under any contract or agreement with the Company or any of its
affiliated companies. Amounts which are vested benefits or which Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or agreement except
as such plan, policy, practice or program is expressly superseded by this Agreement.

 

7

 

7. Termination Procedures.

7.1 Notice of Termination. Any termination by the Company for Cause, or by Executive
for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in
accordance with Section 11 of this Agreement. The failure by Executive or the Company to set forth
in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason
or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or
the Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s
rights hereunder. For purposes of this Agreement, a “Notice of Termination” shall mean a notice
which shall indicate the specific termination provision in this Agreement relied upon and shall set
forth the Date of Termination.

7.2 Date of Termination. For purposes of this Agreement, the term “Date of
Termination” means (i) if Executive’s employment is terminated by the Company for Cause, or by
Executive for Good Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be, (ii) if Executive’s employment is terminated by the Company
other than for Cause, the Date of Termination shall be the date specified by the Company when it
notifies Executive of such termination and (iii) if Executive’s employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of death of Executive or the date
of Disability, as the case may be.

8. Full Settlement. Subject to the offset provided for in Section 5.1, the Company’s
obligation to make payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment, defense, mitigation or
other claim, right or action which the Company may have against Executive or others. The Company
agrees to pay promptly as incurred, to the full extent permitted by law, all legal fees and
expenses which Executive may reasonably incur as a result of any contest (unless Executive’s claim
is found by a court of competent jurisdiction to have been frivolous) by the Company, Executive or
others of the validity or enforceability of, or liability under, any provision of this Agreement
(other than Section 10 hereof) or any guarantee of performance thereof (including as a result of
any contest by Executive about the amount of any such payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the “applicable federal rate” provided for in Section
7872(f)(2)(A) of the Code; provided that any such reimbursement payment by the Company pursuant to
this sentence shall be made on or before the last day of the calendar year immediately following
the calendar year in which any such fee or expense was incurred.

9. Successors; Binding Agreement.

9.1 This Agreement is personal to Executive and without the prior written consent of the
Company shall not be assignable by Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of and be enforceable by
Executive’s heirs, executors and other legal representatives.

9.2 This Agreement shall inure to the benefit of and be binding upon the Company and may only
be assigned to a successor described in Section 9.3.

 

8

 

9.3 The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place. As
used in this Agreement, “Company” shall mean the Company as earlier defined and any successor to
its business and/or assets which assumes and agrees to perform this Agreement by operation of law,
or otherwise.

10. Confidential Information; Certain Prohibited Activities.

10.1 Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by Executive during
Executive’s employment by the Company or any of its affiliated companies and which shall not be or
become public knowledge (other than by acts by Executive or representatives of Executive in
violation of this Agreement). After Executive’s Date of Termination, Executive shall not, without
the prior written consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other than the Company and
those designated by it. Except as provided in Subsection 10.3 below, in no event shall an asserted
violation of the provisions of this Section 10 constitute a basis for deferring or withholding any
amounts otherwise payable to Executive under this Agreement. Also, within 14 days of the
termination of Executive’s employment for any reason, Executive shall return to the Company all
documents and other tangible items of or containing Company information which are in Executive’s
possession, custody or control.

10.2 Executive agrees that for a period of 24 complete calendar months following Executive’s
Date of Termination, Executive will not, either directly or indirectly, call on, solicit, induce or
attempt to induce any of the employees or officers of the Company whom Executive had knowledge of
or association with during Executive’s employment with the Company to terminate their association
with the Company either personally or through the efforts of his or her subordinates.

10.3 In the event of a breach by Executive of any provision of this Section 10, the Company
shall be entitled to (i) cease any Welfare Benefit Contribution entitlement provided pursuant to
Section 5.1(B) hereof, (ii) relief by temporary restraining order, temporary injunction and/or
permanent injunction, (iii) recovery of all attorneys’ fees and costs incurred in obtaining such
relief and (iv) any other legal and equitable relief to which it may be entitled, including
monetary damages.

 

9

 

11. Notices. For the purpose of this Agreement, notices and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed
by United States registered mail, return receipt requested, postage prepaid, addressed, if to
Executive, to the address inserted below Executive’s signature on the final page hereof and, if to
the Company, to the address set forth below, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of change of address
shall be effective only upon actual receipt:

To the Company:

Lennox International Inc.

2140 Lake Park Blvd.

Richardson, TX 75080

Attention: Chief Human Resources Officer

12. Miscellaneous. This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and heirs, executors and
other legal representatives. Executive’s or the Company’s failure to insist upon strict compliance
with any provision hereof or any other provision of this Agreement or the failure to assert any
right Executive or the Company may have hereunder, including, without limitation, the right of
Executive to terminate employment for Good Reason pursuant to Section 5.1 of this Agreement, shall
not be deemed to be a waiver of such provision or right or any other provision or right of this
Agreement. This Agreement shall be governed by and construed in accordance with the laws of the
State of Texas, without reference to principles of conflict of laws that would require the
application of the laws of any other state or jurisdiction. The captions of this Agreement are not
part of the provisions hereof and shall have no force or effect. All references to sections of the
Exchange Act or the Code shall be deemed also to refer to any successor provisions to such
sections. The Company may withhold from any amounts payable under this Agreement such federal,
state or local taxes as shall be required to be withheld pursuant to any applicable law or
regulation.

13. Validity. The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement, which shall remain
in full force and effect.

14. Section 409A. This Agreement is intended to comply with Section 409A of the
Internal Revenue Code of 1986, as amended, and shall be construed in a manner to give effect to
such intention. The parties shall, if necessary, amend the terms of this Agreement to the limited
extent necessary and possible in order to comply with the requirements of Section 409A. Each
payment due hereunder will be considered to be separate payments due to Executive and not one of a
series of payments for purposes of Section 409A.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date above
first written.

	 	 	 	 	 
	 	LENNOX INTERNATIONAL INC.

 	 
	 	By:  	
 	 	 
	 	Date: 	 	 
	 	 	 	 
	 	EXECUTIVE: [NAME]

 	 
	 	By:  	 	 
	 	Date:	 	 

 

10

 

	 	 	 	 	 

Appendix A

(A) “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section
12 of the Exchange Act.

(B) “Base Amount” shall have the meaning set forth in Section 280G(b)(3) of the Code.

(C) “Beneficial Owner” shall mean, with reference to any securities, any Person if:

(i) such Person is the “beneficial owner” (as determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Exchange Act, as in effect on the date of
this Agreement) of such securities; provided, however, that a Person shall not be deemed
the “Beneficial Owner” of, or to “beneficially own,” any security under this subsection
(i) as a result of an agreement, arrangement or understanding to vote such security if
such agreement, arrangement or understanding: (x) arises solely from a revocable proxy
or consent given in response to a public (i.e., not including a solicitation exempted by
Rule 14a-2(b)(2) of the General Rules and Regulations under the Exchange Act) proxy or
consent solicitation made pursuant to, and in accordance with, the applicable provisions
of the General Rules and Regulations under the Exchange Act and (y) is not then
reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or

(ii) such Person is a member of a group (as that term is used in Rule 13d-5(b) of
the General Rules and Regulations under the Exchange Act) that includes any other Person
(other than an Exempt Person) that beneficially owns such securities;

provided, however, that nothing in this definition shall cause a Person engaged in business as an
underwriter of securities to be the Beneficial Owner of, or to “beneficially own,” any securities
acquired through such Person’s participation in good faith in a firm commitment underwriting until
the expiration of forty (40) days after the date of such acquisition. For purposes hereof,
“voting” a security shall include voting, granting a proxy, consenting or making a request or
demand relating to corporate action (including, without limitation, a demand for a stockholder
list, to call a stockholder meeting or to inspect corporate books and records) or otherwise giving
an authorization (within the meaning of Section 14(a) of the Exchange Act) in respect of such
security.

(D) “Board” shall mean the Board of Directors of the Company.

 

A-1

 

(E) “Cause” shall have the same meaning as set forth in the Employment Agreement, or, if
no employment agreement exists, shall mean (a) any violation by Executive of the Company’s
written policies as they may exist or be created or modified and made available to Executive
from time to time in the future, including, as examples and not as a limitation of the
policies to which Executive may be subject, those policies prohibiting discrimination in the
workplace, including the prohibition of
harassment, on the ground of race, sex, religion, age or any other prohibited basis; (b)
any state or federal criminal conviction, including, but not limited to, entry of a plea of
nolo contendere or deferred adjudication upon a felony or misdemeanor charge; (c) the
commission by Executive of any material act of misconduct or dishonesty related to Executive’s
employment; (d) any intentional or grossly negligent action or omission to act which breaches
any covenant, agreement, condition or obligation contained in this Agreement; or (e) acts that
in any way have a direct, substantial and adverse effect on the Company’s reputation.

(F) “Change in Control” shall be deemed to have occurred if the event set forth in any
one of the following paragraphs shall have occurred:

(i) Any Person (other than an Exempt Person) shall become the Beneficial Owner of
35% or more of the shares of Common Stock then outstanding or 35% or more of the
combined voting power of the Voting Stock of the Company then outstanding; provided,
however, that no Change in Control shall be deemed to occur for purposes of this
subsection (i) if such Person shall become a Beneficial Owner of 35% or more of the
 shares of Common Stock or 35% or more of the combined voting power of the Voting Stock
of the Company solely as a result of (x) an Exempt Transaction or (y) an acquisition by
a Person pursuant to a reorganization, merger or consolidation, if, following such
reorganization, merger or consolidation, the conditions described in clauses (x), (y)
and (z) of subsection (iii) of this definition are satisfied;

(ii) Individuals who, as of the Effective Date, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent to the Effective
Date whose election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the Incumbent
Board; provided, further, that there shall be excluded, for this purpose, any such
individual whose initial assumption of office occurs as a result of any election contest
with respect to the election or removal of directors or other solicitation of proxies or
consents by or on behalf of a person other than the Board;

 

A-2

 

(iii) Approval by the shareholders of the Company of a reorganization, merger or
consolidation, in each case, unless, following such reorganization, merger or
consolidation, (x) more than 65% of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or consolidation and the combined
voting power of the then outstanding Voting Stock of such corporation is beneficially
owned, directly or indirectly, by all or substantially all of the Persons who were the
Beneficial Owners of the outstanding Common Stock immediately prior to such
reorganization, merger or consolidation (ignoring, for purposes of this clause (x), the
first proviso in subsection (i) of the definition of “Beneficial Owner” set forth above)
in substantially the same proportions as their ownership immediately prior to such
reorganization, merger or consolidation of the outstanding Common Stock, (y) no Person
(excluding any Exempt Person or any
Person beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 35% or more of the Common Stock then outstanding
or 35% or more of the combined voting power of the Voting Stock of the Company then
outstanding) beneficially owns, directly or indirectly, 35% or more of the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting power of the then
outstanding Voting Stock of such corporation and (z) at least a majority of the members
of the board of directors of the corporation resulting from such reorganization, merger
or consolidation were members of the Incumbent Board at the time of the execution of the
initial agreement or initial action by the Board providing for such reorganization,
merger or consolidation; or

(iv) Approval by the shareholders of the Company of (x) a complete liquidation or
dissolution of the Company, unless such liquidation or dissolution is approved as part
of a plan of liquidation and dissolution involving a sale or disposition of all or
substantially all of the assets of the Company to a corporation with respect to which,
following such sale or other disposition, all of the requirements of clauses (y)(A), (B)
and (C) of this subsection (iv) are satisfied, or (y) the sale or other disposition of
all or substantially all of the assets of the Company, other than to a corporation, with
respect to which, following such sale or other disposition, (A) more than 65% of the
then outstanding shares of common stock of such corporation and the combined voting
power of the Voting Stock of such corporation is then beneficially owned, directly or
indirectly, by all or substantially all of the Persons who were the Beneficial Owners of
the outstanding Common Stock immediately prior to such sale or other disposition
(ignoring, for purposes of this clause (y)(A), the first proviso in subsection (i) of
the definition of “Beneficial Owner” set forth above) in substantially the same
proportions as their ownership, immediately prior to such sale or other disposition, of
the outstanding Common Stock, (B) no Person (excluding any Exempt Person and any Person
beneficially owning, immediately prior to such sale or other disposition, directly or
indirectly, 35% or more of the Common Stock then outstanding or 35% or more of the
combined voting power of the Voting Stock of the Company then outstanding) beneficially
owns, directly or indirectly, 35% or more of the then outstanding shares of common stock
of such corporation and the combined voting power of the then outstanding Voting Stock
of such corporation and (C) at least a majority of the members of the board of directors
of such corporation were members of the Incumbent Board at the time of the execution of
the initial agreement or initial action of the Board providing for such sale or other
disposition of assets of the Company.

(G) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(H) “Committee” shall mean the Compensation and Human Resources Committee of the Board.

 

A-3

 

(I) “Common Stock” shall mean the common stock, par value $.01 per share, of the Company,
and shall include stock of any successor, within the meaning of Section 9.1.

(J) “Company” shall mean Lennox International Inc. and, except in determining under
Section (G) hereof whether or not any Change in Control of the Company has occurred, shall
include any successor to its business and/or assets which assumes and agrees to perform this
Agreement by operation of law, or otherwise.

(K) “Disability” shall mean permanently disabled (completely unable to perform
Executive’s duties as defined in the benefit plans of the Company).

(L) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time
to time.

(M) “Exempt Person” shall mean the Company, any subsidiary of the Company, any employee
benefit plan of the Company or any subsidiary of the Company, and any Person organized,
appointed or established by the Company for or pursuant to the terms of any such plan.

(N) “Exempt Transaction” shall mean an increase in the percentage of the outstanding
 shares of Common Stock or the percentage of the combined voting power of the outstanding
Voting Stock of the Company beneficially owned by any Person solely as a result of a reduction
in the number of shares of Common Stock then outstanding due to the repurchase of Common Stock
by the Company, unless and until such time as such Person shall purchase or otherwise become
the Beneficial Owner of additional shares of Common Stock constituting 3% or more of the then
outstanding shares of Common Stock or additional Voting Stock representing 3% or more of the
combined voting power of the then outstanding Voting Stock.

(O) “Good Reason” shall mean:

(i) any change in Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities, excluding for this
purpose any de minimus changes and excluding an isolated, insubstantial and inadvertent
action not taken in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by Executive, or any other assignment to Executive of
any duties inconsistent in any respect with such position, authority, duties or
responsibilities, other than de minimus inconsistencies or other than, in each case, any
such change in duties or such assignment that would clearly constitute a promotion or
other improvement in Executive’s position;

(ii) any failure by the Company to comply with any of the provisions of this
Agreement, other than an isolated, insubstantial and inadvertent failure not occurring
in bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by Executive;

 

A-4

 

(iii) the Company’s requiring Executive to be based at any office or location other
than at the location where Executive was employed immediately preceding the Change in
Control or at another location within 35 miles thereof;

(iv) any failure by the Company to comply with and satisfy the requirements of
Section 9.3 of this Agreement, provided that (x) the successor described in Section 9.3
has received, at least ten days prior to the Date of Termination, written notice from
the Company or Executive of the requirements of such provision and (y) such failure to
be in compliance and satisfy the requirements of Section 9.3 shall continue as of the
Date of Termination;

(v) in the event that Executive is serving as a member of the Board immediately
prior to the Change in Control, any failure to reelect Executive as a member of the
Board, unless such reelection would be prohibited by the Company’s By-laws as in effect
immediately prior to the Change in Control.

(P) “Person” shall mean any individual, firm, corporation, partnership, association,
trust, unincorporated organization or other entity.

(Q) “Voting Stock” shall mean, with respect to a corporation, all securities of such
corporation of any class or series that are entitled to vote generally in the election of
directors of such corporation (excluding any class or series that would be entitled so to vote
by reason of the occurrence of any contingency, so long as such contingency has not occurred).

 

A-5

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