1998 INCENTIVE PLAN of LENNOX INTERNATIONAL INC. PERFORMANCE SHARE PROGRAM AWARD AGREEMENT

Exhibit 10.3

1998 INCENTIVE PLAN
of
LENNOX INTERNATIONAL INC.

PERFORMANCE SHARE PROGRAM AWARD AGREEMENT — 200_-200_-200_

     THIS AGREEMENT (“Agreement”) is made as of the                      (the “Award Date”), by and between Lennox International Inc., a Delaware corporation (the “Company”), and «First» «Last» (“Participant”).

     The Company has adopted the 1998 Incentive Plan of Lennox International Inc. (the “Plan”), a copy of which is appended to this Agreement as Exhibit A and by this reference made a part hereof, for the benefit of eligible employees, directors, consultants and other independent contractors of the Company and its Subsidiaries. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Plan.

     Pursuant to the Plan, the Committee, which has generally been assigned responsibility for administering the Plan, has determined that it is in the interest of the Company and its stockholders to make the Award provided herein in order to encourage Participant to remain in the employ of the Company or its Subsidiaries, to increase Participant’s personal interest in the continued success and progress of the Company and to foster and enhance the long-term profitability of the Company for the benefit of its shareholders by offering the incentive of long-term rewards to be realized only upon attainment of established goals.

     The Company and Participant therefore agree as follows:

     1.  Grant of Award . Subject to the terms and conditions herein, the Company grants to the Participant for the Performance Period, subject to earlier termination pursuant to paragraph 6 below, a contingent award of «Shares» shares of Common Stock (the “Contingent Award”). The Performance Period begins on                      , and ends on                      (“Performance Period”).

     2.  Earned Awards . At the end of the Performance Period, the Committee shall determine Participant’s Earned Award for such period by reference to the following performance matrix:

     If, at the end of the Performance Period, at least the minimum performance level has been attained, the Earned Award (as defined in Section 18 below) will be vested and will be distributed as soon as practicable to Participant. To the extent that the Earned Award payout level attained is less than 100%, the difference between 100% and the Earned Award distributed, if any (the “Unearned Award”), shall be forfeited. Notwithstanding the above, a Contingent Award shall become fully vested and be distributed to the Participant, irrespective of the limitations set forth above, upon the occurrence of a Change of Control (as defined in Section 13 below).

     3.  Method and Time of Payment . Earned Awards shall be paid as soon as practicable following the end of the Performance Period. Earned Awards shall be paid in either (i) the form of the nearest number of whole shares of Common Stock which is equal to or less than the award determined by the reference to the matrix specified in paragraph 2 above, (ii) cash, or (iii) a combination, as determined by the Committee. Subject to the withholding referred to in paragraph 4, the Company shall deliver to Participant certificates issued in Participant’s name for the number of shares to be issued to Participant. If delivery is by mail, delivery of shares of Common Stock shall be deemed effected for all purposes when a stock transfer agent of the Company shall have deposited the certificates in the United States mail, addressed to Participant.

     4.  Withholding for Taxes . Participant acknowledges and agrees that the Company may deduct from the shares of Common Stock otherwise deliverable in connection with an Earned Award, a number of whole shares of Common Stock (valued at their Fair Market Value on the date of exercise) that is at least equal to the minimum statutory amount of all Federal, state and local taxes required to be withheld by the Company in connection with such delivery, as determined by the Company.

     5.  Termination of Employment . Unless otherwise determined by the Committee in its sole discretion, any Contingent Award not yet earned shall terminate at the times specified below:

     (a) If Participant terminates employment with the Company and its Subsidiaries voluntarily, or if Participant’s employment with the Company and its Subsidiaries is terminated by the Company or a Subsidiary for any reason, none of the shares subject to the Award that have not been previously paid pursuant to paragraph 2 shall be earned and the Award shall be canceled upon such termination of Participant’s employment.

     (b) If Participant’s employment with the Company and its Subsidiaries is terminated by reason of Participant’s death or Disability (as defined below) prior to expiration of the Performance Period, Participant, or in the event of Participant’s death, Participant’s beneficiary, shall receive a prorata payment of Participant’s Earned Awards based upon the Company’s attainment of its performance goals (as determined in the sole discretion of the Committee),

determined as of the date of death or Disability. Such payment shall be made as soon as practicable. Any Unearned Award shall be forfeited.

     (c) If Participant’s employment with the Company and its Subsidiaries is terminated by reason of Participant’s retirement under an employee pension benefit plan maintained by the Company or a Subsidiary during the Performance Period, then, for purposes of this Agreement, Participant shall be deemed to have continued in employment until the end of the Performance Period, and Participant shall receive an Earned Award, to the extent that such an Earned Award is payable in accordance with paragraph 2 for the Performance Period. Such Earned Award shall be payable as soon as practicable after the end of the Performance Period. Any Unearned Award shall be forfeited.

     “Disability” for purposes of this Agreement, shall mean disability as defined in any written employment agreement between Participant and the Company or a Subsidiary in effect at the time of Participant’s termination of employment or, in the absence of any such employment agreement, as determined by the Committee in good faith and/or pursuant to any long-term disability plan sponsored by the Company or applicable Subsidiary.

     6.  Nontransferability of Award . During Participant’s lifetime, the Award is not transferable (voluntarily or involuntarily) other than pursuant to a domestic relations order and, except as otherwise required pursuant to a domestic relations order, is payable only to Participant or Participant’s court appointed legal representative. Participant may designate a beneficiary or beneficiaries to whom the benefits of the Award shall pass upon Participant’s death and may change such designation from time to time by filing a written designation of beneficiary or beneficiaries with the Committee on the form annexed hereto as Exhibit B or such other form as may be prescribed by the Committee, provided that no such designation shall be effective unless so filed prior to the death of Participant. If no such designation is made or if the designated beneficiary does not survive Participant’s death, the benefits of the Award shall pass by will or the laws of descent and distribution.

     7.  No Stockholder Rights . Participant shall not be deemed for any purpose, including voting rights and dividends, to be, or to have any of the rights of, a stockholder of the Company with respect to any shares of Common Stock as to which this Agreement relates until such shares shall have been issued to Participant by the Company. Furthermore, the existence of this Agreement shall not affect in any way the right or power of the Company or its stockholders to accomplish any corporate act, including, without limitation, the acts referred to in Section 15 of the Plan.

     8.  Adjustments . As provided in Section 15 of the Plan, certain adjustments may be made to shares of Common Stock upon the occurrence of events or circumstances described in Section 15 of the Plan.

     9.  Restrictions Imposed by Law . Without limiting the generality of Section 16 of the Plan, Participant agrees that the Company will not be obligated to deliver any shares of Common Stock, if counsel to the Company determines that such delivery would violate any applicable law or any rule or regulation of any governmental authority or any rule or regulation of, or agreement of the Company with, any securities exchange or association upon which the Common Stock may be listed or quoted. The Company shall in no event be obligated to take any affirmative action in order to cause the delivery of shares of Common Stock to comply with any such law, rule, regulation or agreement.

     10.  Notice . Unless the Company notifies Participant in writing of a different procedure, any notice or other communication to the Company with respect to this Agreement shall be in writing and shall be (a) delivered personally to the following address:

Lennox International Inc.
c/o Corporate Secretary
2140 Lake Park Boulevard
Richardson, Texas 75080

     or (b) sent by first class mail, postage prepaid and addressed as follows:

Lennox International Inc.
c/o Corporate Secretary
2140 Lake Park Boulevard
Richardson, Texas 75080

     Any notice or other communication to Participant with respect to this Agreement shall be in writing and shall be delivered personally, or shall be sent by first class mail, postage prepaid, to Participant’s address as listed in the records of the Company on the Award Date, unless the Company has received written notification from Participant of a change of address.

     11.  Amendment . Notwithstanding any other provisions hereof, this Agreement may be supplemented or amended from time to time as approved by the Committee as contemplated by Section 6 of the Plan. Without limiting the generality of the foregoing, without the consent of Participant:

     (a) this Agreement may be amended or supplemented (i) to cure any ambiguity or to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or (ii) to add to the covenants and agreements of the Company for the benefit of Participant or surrender any right or power reserved to or conferred upon the Company in this Agreement; subject, however, to any required approval of the Company’s stockholders and, provided, in each case, that such changes or corrections shall not adversely affect the rights of Participant with respect to the Award evidenced hereby without the Participant’s consent, (iii) to make changes to the number of shares of Common Stock subject to Participant’s Award or to change the

performance standards of paragraph 2, as equitably determined by the Committee to reflect adjustment required by the effect of a major corporate event such as the acquisition or disposition of a Subsidiary or major business activity or substantial operating assets, or a “going public” event; or (iv) to make such other changes as the Company, upon advice of counsel, determines are necessary or advisable because of the adoption or promulgation of, or change in or to the interpretation of, any law or governmental rule or regulation, including any applicable Federal or state securities laws; and

     (b) subject to Section 6 of the Plan and any required approval of the Company’s stockholders, the Award evidenced by this Agreement may be canceled by the Committee and a new Award made in substitution therefore, provided that the Award so substituted shall satisfy all requirements of the Plan as of the date such new Award is made and no such action shall a