Exhibit 10.1
AMENDMENT TO
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
This
Amendment to Change of Control Employment Agreement is by and
between Lennox International Inc., a Delaware corporation (the
“Company”), and ________________________ (the
“Executive”), dated as of the 7 th day of
December, 2007.
WHEREAS, the Company and the Executive executed that certain Change
of Control Employment Agreement dated as of ___________________ (as
amended from time to time, the “Agreement”; capitalized
terms not otherwise defined herein shall have the meaning given to
them in the Agreement); and
WHEREAS, Section 409A of the Internal Revenue Code
(“Section 409A”) imposes new requirements for
certain nonqualified deferred compensation arrangements; and
WHEREAS, the Internal Revenue Service in April 2007 published
final regulations under Section 409A; and
WHEREAS, the Company has determined that amending certain of the
Company’s plans, agreements and programs containing
nonqualified deferred compensation arrangements is necessary to
comply with the new requirements under Section 409A; and
WHEREAS, Executive and the Company desire that certain changes be
made to the Agreement to comply with the new requirements under
Section 409A.
IN
CONSIDERATION of the mutual covenants and agreements hereinafter
set forth, and for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Company and the
Executive hereby agree has follows:
1. Annual
Bonus . Section 2(b)(ii) of the Agreement shall be revised
and replaced with the provision set forth below:
“(ii) Annual Bonus . In addition to Annual
Base Salary, the Executive shall be awarded, for each fiscal year
or portion thereof during the Employment Period, an annual bonus
(the “Annual Bonus”) in cash equal to the greater of
(A) the greatest dollar amount of annual bonus paid or awarded
to or for the benefit of the Executive in respect of any of the
preceding three fiscal years or (B) an amount comparable to
the annual bonus awarded to other Company executives taking into
account Executive’s position and responsibilities with the
Company, prorated in the case of either (A) or (B) 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.”
2. Obligations
of the Company Upon Termination . Section 4 of the
Agreement shall be revised and replaced with the provision set
forth below:
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“4. Obligations of the Company Upon Termination .
(a) Good Reason or During a Window Period; Other than
for Cause, Death or Disability . If, during the Employment
Period, the Company shall terminate the Executive’s
employment other than for Cause, death or Disability or the
Executive shall terminate employment for Good Reason or his
employment shall be terminated for any reason during a Window
Period:
(i) the Company shall pay or provide to or in
respect of the Executive the following amounts and benefits:
A. in a lump sum in cash, undiscounted, an amount
equal to the sum of (1) the Executive’s Annual Base
Salary through the Date of Termination, (2) the product of
(x) the highest Annual Bonus paid or awarded to or for the
benefit of Executive during the three fiscal years preceding the
Date of Termination and (y) a fraction, the numerator of which
is the number of days in the current fiscal year through the Date
of Termination and the denominator of which is 365, (3) any
deferred compensation previously awarded to or earned by the
Executive (together with any accrued interest or earnings thereon)
and (4) any compensation for unused vacation time for which
the Executive is eligible in accordance with the most favorable
plans, policies, programs and practices of the Company and its
affiliated companies, in each case to the extent not theretofore
paid (the sum of the amounts described in clauses (1), (2),
(3) and (4) shall be hereinafter referred to as the
“Accrued Obligation”);
B. in a lump sum in cash, undiscounted, an amount
equal to the sum of (1) one and one-half times the Annual Base
Salary, if the Date of Termination occurs before the third
anniversary of Executive’s employment with the Company or, if
thereafter, three times the Annual Base Salary and (2) one and
one-half times the highest Annual Bonus paid or awarded to or for
the benefit of the Executive, if the Date of Termination occurs
before the third anniversary of Executive’s employment with
the Company or, if thereafter, three times the highest Annual Bonus
paid or awarded to or for the benefit of the Executive during the
three fiscal years preceding the Date of Termination;
C. an additional one and one-half Years of Vesting
Service and Years of Credited Service, if the Date of Termination
occurs before the third anniversary of Executive’s employment
with the Company or, if thereafter, an additional three Years of
Vesting Service and Years of Credited Service, as well as an
incremental one and one-half years added to the Executive’s
age, if the Date of Termination occurs before the third anniversary
of Executive’s employment with the Company or, if thereafter,
three years added to Executive’s age, for purposes of the
Company’s Supplemental Retirement Plan and Profit Sharing
Restoration Plan;
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D. in a lump sum in cash, undiscounted, an amount
equal to the sum of (1) one and one-half times the Annual Base
Salary, if the Date of Termination occurs before the third
anniversary of Executive’s employment with the Company or, if
thereafter, three times the Annual Base Salary and (2) one and
one-half times the highest Annual Bonus paid or awarded to or for
the benefit of the Executive, if the Date of Termination occurs
before the third anniversary of Executive’s employment with
the Company or, if thereafter, three times the highest Annual Bonus
paid or awarded to or for the benefit of the Executive during the
three fiscal years preceding the Date of Termination (the amounts
in this clause D. to reflect the equity component of
Executive’s overall compensation);
E. in a lump sum in cash, undiscounted, an amount
equal to the sum of (1) 15% of the Annual Base Salary (this
amount being paid in lieu of the provision of out placement
services) and (2) three times 15% of the Annual Base Salary
that would have been paid or awarded to or for the benefit of the
Executive during the fiscal year that includes the Date of
Termination (this amount to reflect the perquisites component of
Executive’s overall compensation);
F. effective as of the Date of Termination,
(x) immediate vesting and exercisability of, termination of
any restrictions on sale or transfer (other than any such
restriction arising by operation of law) with respect to and
treatment of any performance goals as having been satisfied at the
highest possible level with respect to each and every stock option,
restricted stock award, restricted stock unit award and other
equity-based award and performance award (each, a
“Compensatory Award”) that is outstanding as of a time
immediately prior to the Date of Termination, (y) the
extension of the term during which each and every Compensatory
Award may be exercised by the Executive until the earlier of (1)
the third anniversary of the Date of Termination or (2) the
date upon which the right to exercise any Compensatory Award would
have expired if the Executive had continued to be employed by the
Company under the terms of this Agreement until the second
anniversary of the Employment Effective Date.
(ii) for the eighteen month period, if the Date of
Termination occurs before the third anniversary of
Executive’s employment with the Company or, if thereafter,
three-year period commencing with the Date of Termination, and in
the case of medical and health benefits for the COBRA continuation
period commencing thereafter, the Company shall continue medical
and health benefits and group life and supplemental group life
benefits to the Executive and/or the
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Executive’s family at least equal to those that would have
been provided to them in accordance with the plans, programs,
practices and policies described in Section 2(b)(iv) of this
Agreement if the Executive’s employment had not been
terminated (such continuation of such benefits
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