“Committee” means the Compensation & Human Resources Committee of the Board of Directors of the Company (the "Board").
“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.
“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.
“Net Shares” means common stock of the Company beneficially owned by a Covered Person (after income tax withholding) as a result of: (1) vesting of performance stock units and restricted stock units; and (2) exercise of stock appreciation rights or stock options.
“Ownership Requirements” means Eligible Equity required to be owned by a Covered Person as detailed below.
- Within five years from the date appointed to office, the Chief Executive Officer must acquire and hold, at a minimum, Eligible Equity in an amount equal to six times their annual base salary.
- Within five years from the date appointed to office, each Executive Vice President must acquire and hold, at a minimum, Eligible Equity in an amount equal to three times their annual base salary.
- Within five years from the date appointed to office, each other Section 16 Officer must acquire and hold, at a minimum, Eligible Equity in an amount equal to one and one-half times their annual base salary.
Compliance with the Guidelines
- 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.
- A Covered Person must retain their Net Shares until they have met their Ownership Requirements.
- Once met, the Ownership Requirements must be maintained.
- The Committee has responsibility to administer these Guidelines. If a Covered Person fails to comply with these Guidelines, the Committee will examine the totality of the circumstances and determine any exceptions, appropriate action, or corrective measures, including, without limitation, whether to allow a Covered Person a temporary exception to the Net Shares retention requirement or additional time to meet the Ownership Requirements.