In making its determination as to the independence of our directors, the Board Governance Committee and the Board considered ~~the following relationship:~~

that Ms. Quintos serves as Chief ~~Marketing~~Customer Officer of Dell, Inc., which provides computer equipment and related items to the Company in the ordinary course of business.

Board Meetings and Leadership Structure

~~The Board currently is comprised of 11 members, including 10 independent directors.~~

Mr. Bluedorn serves as the Chairman of the Board and Chief Executive Officer (“CEO”). The Board has determined that Mr. Bluedorn’s position as Chairman allows him to be a ~~liason~~liaison between management and the Board of Directors, providing the Board with the benefit of management’s perspective on our business strategy and all other aspects of the business as the Board performs its oversight role.

Mr. C. L. (Jerry) Henry, a director of the Company since 2000, will retire immediately after the 2016 Annual Meeting of Stockholders, in accordance with the mandatory age-based retirement provisions of our Corporate Governance Guidelines, and the Company and the Board thank him for his many years of service.

Our Corporate Governance Guidelines provide for a Lead Director position, and the Board ~~earlier~~ elected Todd J. Teske as Lead Director in 2015. The Board believes the Lead Director position provides helpful guidance to the independent directors in their oversight of management. The Lead Director, among other things, presides at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors, serves as liaison between the Chairman and the independent directors, assists the Chairman in planning agendas for Board meetings and advises on the quality of the information provided to the Board. The Lead Director also has the authority to call meetings of the independent directors, and, if requested by major stockholders, is available for consultation and direct communication.

The Board met ~~seven~~six times in ~~2015.~~2017. All directors attended ~~in excess of~~more than 75% of the total number of meetings of the Board and committees of the Board on which they served. Our Corporate Governance Guidelines include a policy that Board members are expected to attend the annual meeting of stockholders. All of the individuals serving as directors at the time of our ~~2015~~2017 Annual Meeting of Stockholders ~~other than Ms. Cooper and Mr. Stinson,~~ attended our ~~2015~~2017 Annual Meeting of Stockholders.

Risk Oversight and Compensation Risk Analysis

The Board oversees the Company’s processes to manage risk at the Board and senior management levels. The Audit Committee oversees the guidelines and policies that govern the Company’s processes to assess and manage significant enterprise risk exposure. While the Board and Audit Committee oversee the Company’s risk management, our management is responsible for the development, implementation, and maintenance of our risk

management processes. Management provides periodic reports to the Board and Board committees, as appropriate, on its assessment of strategic, operational, legal and compliance, and financial reporting risks to the Company. The Board and Board committees, as appropriate, review and consider the management reports provided on the Company’s enterprise risk and risk management strategy.

The Board has reviewed the Company’s compensation policies and practices to determine if risks arising from those policies and practices are reasonably likely to have a material adverse effect on the Company. Based on ~~such~~this review, the Board has not identified any risks arising from the compensation policies and practices that are reasonably likely to have a material adverse effect on the Company. The Company incorporates short-term and long-term incentive programs for cash and equity awards that are designed to reward successful execution of its business strategy and achievement of desired business results. Additionally, the Company has stock ownership

requirements and clawback provisions to align the interests of its executive officers with the interests of its stockholders. For non-executive employees, the Company uses a variety of incentive compensation programs to motivate its employees to attain individual goals and support the financial performance of the Company. All of the Company’s material incentive compensation plans are reviewed at least annually by senior management.

Board Committees

The standing committees of the Board are as follows: Audit, Board Governance, Compensation and Human Resources, and Public Policy. The Board has adopted charters for each of these committees, copies of which are available on our website at ~~http://~~www.lennoxinternational.com by following the links “About Us — Corporate Governance — Committee Charters.” Each of these Board committees is led by a different independent director and all members of our Board committees are independent directors.

The following table provides current membership information for each of the Board committees and indicates which directors our Board determined are independent, as ~~independence for directors is~~ defined by the NYSE.

Name

Independent

Audit

Board
Governance

Compensation

and Human

Resources

Public
Policy

Todd M. Bluedorn

—

Janet K. Cooper

—

~~C.L. (Jerry) Henry~~

—

John E. Major

—

Max H. Mitchell

—

John W. Norris, III

—

~~Kim K.W. Rucker~~

—

Karen H. Quintos

—

~~Paul W. Schmidt~~

—

~~Terry D. Stinson~~

Kim K.W. Rucker

—

~~Gregory T. Swienton~~

XPaul W. Schmidt

—

~~Todd J. Teske~~

Gregory T. Swienton

—

Todd J. Teske

—



*	Committee Chairperson

Audit Committee

The Audit Committee assists the Board in fulfilling its oversight responsibilities relating to the integrity of our financial statements and related systems of internal controls, our compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications, independence and performance and the performance of our internal audit function. The Audit Committee also has the direct responsibility for the appointment, compensation, retention and oversight of our Independent Accountants.

The Board has determined that each Audit Committee member is independent, as independence is defined for audit committee members ~~is defined~~ by the SEC and the ~~NYSE,~~NYSE. The Board has also determined that each Audit Committee member is “financially literate” as defined by the NYSE, ~~and~~ has accounting or related financial management ~~expertise. The Board has determined that each of Mr. Schmidt,~~

~~Chairperson of the Audit Committee,~~expertise and ~~Mr. Swienton~~ is an audit committee financial expert as defined by the SEC. The Audit Committee met ~~eight~~nine times in ~~2015. All members of the Audit Committee attended in excess of 75% of the Audit Committee meetings held when they were Committee members in 2015.~~

2017.

Board Governance Committee

The Board Governance Committee assists the Board by identifying individuals qualified to become Board members, developing qualification criteria for Board membership, making recommendations to the Board regarding the appropriate size of the Board and appointment of members to the Board’s committees, developing and recommending to the Board any changes to the Corporate Governance Guidelines and Code of Business Conduct applicable to our Company, developing our Company’s director education programs, and overseeing the evaluation of our Board. The Board Governance Committee also conducts an individual peer review for any directors who are scheduled to be re-nominated. The Board has determined that each member of the Board Governance Committee is independent as independence ~~for directors~~ is defined by the NYSE. The Board Governance Committee met ~~three times~~twice in ~~2015. All members of the Board Governance Committee attended in excess of 75% of the Board Governance Committee meetings held when they were Committee members in 2015.~~

2017.

Compensation and Human Resources Committee

The Compensation and Human Resources Committee determines the compensation philosophy and oversees the compensation programs for the Company’s executive officers and the non-employee members of the Board. This Committee’s responsibilities include oversight of the short- and long-term incentive plans and the senior management succession plans. The Committee also reviews the funding requirements and investment policies for the defined benefit and defined contribution retirement plans, and the performance of investment funds, investment advisors and investment managers under those plans.

The Compensation Committee may delegate its responsibilities to a subcommittee comprised of Compensation Committee members.

Although the Committee seeks input from the CEO on various elements of executive compensation, the Committee determines and approves the final compensation elements and amounts to be provided to the Company’s ~~named executive officers (“NEOs”).~~NEOs. The independent members of the Board (rather than the Committee) have direct responsibility for approving CEO and Board ~~compensation. The~~compensation; however, the Committee reviews and recommends proposed changes to CEO and Board compensation to the independent members of the Board for approval. See “Executive Compensation — Compensation Discussion and Analysis” for information concerning the committee’s philosophy and objectives in overseeing executive compensation. The Board has affirmatively determined that each member of the Committee is independent as ~~independence~~defined for compensation committee members ~~is defined~~ by the NYSE. The Board has also determined that each member of the Committee is a “non-employee director” for purposes of Section 16b-3 of the Exchange Act and, along with each of the independent directors, is an “outside director” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). The Committee met five times in ~~2015. All members of the Compensation and Human Resources Committee attended in excess of 75% of the Compensation and Human Resources Committee meetings held when they were Committee members in 2015.~~

2017.

The Committee’s charter authorizes the Committee to retain third-party compensation consultants and to obtain advice and assistance from internal or external legal, accounting or other advisors. The Committee retains Frederic W. Cook & Co., Inc. (“~~Frederic W.~~FW Cook”) as its executive compensation consultant to provide objective analysis, advice and recommendations regarding the compensation of our executives and non-employee directors. ~~Frederic W.~~FW Cook does not provide any other services ~~for~~to the Company. See “Executive Compensation — Compensation Discussion and Analysis” for further information regarding our executive compensation programs and the scope of services provided by ~~Frederic W.~~FW Cook. The Committee has concluded that ~~Frederic W.~~FW Cook’s work ~~raises no~~does not raise any conflicts of interest that require disclosure under ~~Item 407(e)(3)(iv) of Regulation S-K.~~

applicable SEC regulations.

Public Policy Committee

The Public Policy Committee is responsible for overseeing our Company’s environmental, health and safety issues, and our position on corporate social responsibility and significant public issues that affect our stockholders. The Board has determined that each Public Policy Committee member is independent as ~~independence for directors is~~ defined by the NYSE. The Public Policy Committee met twice in ~~2015.~~

2017.

Director Nomination Process and Nominee Criteria

The Board is responsible for ~~approving~~nominating candidates for Board membership. The Board has delegated the director screening and recruitment process to the Board Governance Committee. In this capacity, the Board Governance Committee develops and periodically reviews the qualification criteria for Board membership, identifies new director candidates, and makes recommendations to the Board regarding the appropriate size of the Board and appointment of members to the Board’s committees. The Board Governance Committee typically retains a third-party search firm to assist in identifying and evaluating potential new director candidates. Qualifications required of individuals for consideration for Board membership will vary according to the particular areas of expertise, experience and skills being sought as a complement to the existing Board composition at the time of any vacancy.

Neither the Board nor the Board Governance Committee has a formal diversity policy. However, our Corporate Governance Guidelines provide that, when nominating new members to the Board, the Board will seek the best qualified candidates with consideration for diversity. This consideration may include diversity of experience, functional expertise and industry knowledge. Our Board of Director Qualification Guidelines further provide that the Board Governance Committee consider a candidate’s diversity of viewpoints in determining the particular qualifications desired for any new Board member.

According to our Board of Director Qualification Guidelines, the Board Governance Committee considers the following factors in evaluating candidates, in addition to ~~such~~ other factors that the Board Governance Committee deems relevant:

Personal Characteristics: leadership, integrity, interpersonal skills and effectiveness, accountability, and high performance standards;

Business Attributes: high levels of leadership experience in business, substantial knowledge of issues faced by publicly-traded companies, experience in positions demonstrating expertise, including on other boards of directors, financial acumen, industry and Company knowledge, diversity of viewpoints, and experience in international markets and strategic planning;

Independence: independence based on the standards established by the NYSE, the SEC, and any other applicable laws or regulations;

Professional Responsibilities: willingness to commit the time required to fully discharge his or her responsibilities, commitment to attend meetings, ability and willingness to represent the stockholders’ long- and short-term interests, awareness of our responsibilities to our customers, employees, suppliers, regulatory bodies and the communities in which we operate and willingness to advance his or her opinions while supporting the majority Board decision, assuming questions of ethics or propriety are not involved;

Governance Responsibility: ability to understand, and distinguish between, the roles of governance and management; and

Availability and Commitment: availability based on the number of commitments to other entities existing or contemplated by the candidate.

The full text of our Board of Directors Qualification Guidelines can be found on our website at http://www.lennoxinternational.com by following the links “About Us — Corporate Governance — Board of Director Qualification Guidelines.”

When a vacancy occurs on the Board, a majority of the directors then in office may fill the vacancy, or the vacancy may remain open or the size of the Board may be reduced. The Board Governance Committee evaluates ~~and recommends~~nominees to the Board ~~nominees for election~~ to fill any vacancy on the Board.

Stockholder Nominations for Director

The Board Governance Committee considers nominees for election to the Board recommended by stockholders in the same manner as other candidates. A stockholder wishing to nominate a candidate for election to the Board at a meeting of the stockholders (“Nominating Stockholder”) is required to give written notice to our Corporate Secretary of his or her intention to make a nomination in accordance with the terms of our Bylaws. The Nominating Stockholder must be a holder of record of stock of the Company entitled to vote at the annual meeting of stockholders and must appear at the annual meeting of stockholders to nominate such person. The Nominating Stockholder must include a written consent offrom its proposed director nominee. The proposed director nominee must also represent and agree that he or she ~~(i)~~(1) has not and will not give any assurance or commitment not disclosed to the Company on how he or she would vote on any issue or question, ~~(ii)~~(2) has not and will not become party to any agreement not disclosed to the Company regarding direct or indirect compensation (other than from the Company) for his or her service as a director, and ~~(iii)~~(3) if elected, will comply with all applicable policies and guidelines of the Company. We must receive the notice of nomination at least 60 days but no more than 90 days prior to the annual meeting of ~~stockholders, or~~stockholders. However, if we give less than 70 days’ notice of the date of the annual meeting of stockholders, the notice of nomination must be received within 10 days following the date on which notice of the date of the annual meeting of stockholders was mailed or such public disclosure was made to our stockholders.

Pursuant to our Bylaws, the notice for the proposed director nominee must contain certain information about the nominee, the Nominating Stockholder and any person “acting in concert” with the Nominating Stockholder, including descriptions of any arrangements or understanding related to the nomination, the information that would be required if such person was making a stockholder proposal (as described under “Stockholder Proposals for the ~~2017~~2019 Annual Meeting of Stockholders — Proposals Not for Inclusion in the Proxy Statement to be Offered at the ~~2017~~2019 Annual Meeting”) and other information sufficient to allow the Board Governance Committee to determine if the candidate meets our qualification criteria for Board membership. The Board Governance Committee may require ~~that~~ the proposed director nominee to furnish additional information in order to determine that person’s eligibility to serve as a director. A nomination that does not comply with the above procedure will be disregarded. Nominating Stockholders whose nominations comply with the foregoing procedure and who meet the criteria described above under the heading “Director Nomination Process and Nominee Criteria,” and in our Corporate Governance Guidelines, will be evaluated by the Board Governance Committee in the same manner as the Board Governance Committee’s nominees.

Stockholder Communications with Directors

Stockholders may send written communications to the Board by email todirectors@lennoxintl.com, or by regular mail to 2140 Lake Park Blvd., Richardson, Texas 75080, Attention: Board of Directors, c/o Corporate Secretary.

Stockholder communications received by the Corporate Secretary will be delivered to one or more members of the Board or management, as determined by the Corporate Secretary. Any allegations of accounting, internal controls or auditing-related complaints or concerns will be directed to the Chairman of the Audit Committee.

Interested parties may communicate with non-management directors of the Board by sending written communications to the ~~addresses~~address listed above to the attention of the ~~Chairman of the Board.~~

Lead Director.

Other Corporate Governance Policies and Practices

Code of Business Conduct

The Company has adopted a Code of Business Conduct that applies to all its directors and employees, including its senior financial and principal executive officers. The Code of Business Conduct covers a variety of matters, such as acting with integrity and compliance with laws, including anti-corruption laws. Amendments to and waivers, if any, of the Code of Business Conduct as it pertains to the executive officers will be disclosed on our website. The Code of Business Conduct is available on the Company’s website at ~~http://~~www.lennoxinternational.com by following the links “About Us — Our Core Values — Code of Conduct.”

Corporate Governance Guidelines

The Company has adopted Corporate Governance Guidelines that are available on the Company’s website at ~~http://~~www.lennoxinternational.com by following the links “About Us — Corporate Governance — Corporate Governance Guidelines.”

Executive Session Meetings

In accordance with our Corporate Governance Guidelines, the ~~independent members~~non-management directors of our Board, all of whom are ~~non-management directors,~~independent, meet regularly in executive session without the presence of management. The Lead Director chairs the executive session meetings of our independent directors.

Whistleblower Procedures

The Audit Committee has established procedures for the handling of complaints regarding accounting, internal accounting controls, or auditing matters, including procedures for confidential and anonymous submission by our employees of concerns regarding such matters. The Company’s Code of Business Conduct prohibits retaliation against employees who report violations or suspected violations of the Code of Business Conduct.

PROPOSAL 3:

ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

In accordance with Section 14A of the ~~Securities~~ Exchange Act, ~~of 1934,~~ we are asking our stockholders ~~for an advisory~~to vote ~~at the Annual Meeting~~ to approve the compensation of our Company’s ~~named executive officers, or~~ NEOs (the “Say-on-Pay vote”), as disclosed in this Proxy Statement. The Say-on-Pay vote is an advisory vote on the resolution below and is not binding on the Company or the Board. Although the vote is non-binding, the directors value the opinions of the stockholders and will consider the outcome of the vote when making future compensation decisions. Our ~~Board has determined to hold Say-on-Pay votes annually until the~~ next advisory vote on the frequency of ~~Say-on-Pay~~shareholder votes ~~that~~on executive compensation will take place at our ~~2017~~ annual meeting of ~~stockholders.~~

shareholders in 2023.

As described more fully in the “Compensation Discussion and Analysis” section of this Proxy Statement, the Company designed its market competitive NEO compensation program to reward successful execution of ~~our~~its business strategy and achievement of desired business results, with a focus on creating alignment with the interests of our stockholders. ~~Our~~The program seeks to achieve these goals on an annual and long-term basis through an appropriate combination of base pay, annual incentives and long-term incentives.

For our NEOs, the majority of compensation is both stock-based and contingent on performance. The annual incentive payout is based on Company financial performance metrics of core net income and free cash flow, and for NEOs that are business segment leaders, a combination of Company and business segment ~~metrics. In addition,~~performance. Our long-term incentives currently include: ~~(i)~~(1) performance shares units, ~~(“PSUs”),~~ which are designed to link compensation to the Company’s three-year financial performance as measured by return on invested capital and core net income growth; ~~(ii)~~(2) stock appreciation rights, ~~(“SARs”),~~ which are designed to incentivize NEOs to grow our business and deliver increased returns to our stockholders and ~~(iii)~~(3) restricted stock units, ~~(“RSUs”),~~ which are designed to support our retention efforts.

The Company also has several governance policies in place to align executive compensation with stockholder interests and mitigate risk. These policies include: stock ownership guidelines, a prohibition on hedging and pledging of Company stock, a clawback policy and post-employment non-competition and non-solicitation restrictions. These ~~programs~~policies are discussed in detail in the “Compensation Discussion and Analysis” section of this Proxy Statement.

In ~~2015,~~2017, the Company ~~drove~~continued to drive business performance, ~~expanded its premium market position~~ and ~~increased~~create stockholder ~~value. This was achieved~~value through its ~~execution of~~focus on innovation, productivity and ~~cost initiatives, leadership in innovative product systems and solutions, commitment to manufacturing, sourcing and distribution excellence, and generation and~~efficient use of cash. ~~Some highlights~~Highlights of our ~~2015~~2017 performance ~~are outlined below.~~

include the following:

Net sales up 3%5% from ~~2014~~2016 to approximately ~~$3.5~~$3.8 billion;

Record total segment profit margin of ~~10.9%~~13.4%, up 8050 basis points from ~~prior year;~~2016;

One-year total stockholder return of ~~33%~~37%, three-year total stockholder return of ~~146%~~127% and five-year total stockholder return of ~~184%~~320%;

~~Record cash generated from operations of $331 million, up from $185 million in 2014;~~ and

Increased dividend ~~20% —~~19%, which resulted in approximately $80 million cash paid ~~$59~~to stockholders and used an additional $250 million ~~in dividends.~~for stock repurchase programs.

~~Continuing Operations before Income Taxes,~~ see Note 1918 in the Notes to the Consolidated Financial Statements in our Form 10-K for the fiscal year ended December 31, ~~2015. Total~~2017. All total stockholder return calculations assume reinvestment of dividends.

We are asking stockholders to approve the following advisory resolution at the Annual Meeting:

RESOLVED, that the compensation of the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE

COMPENSATION OF THE NEOS AS DISCLOSED IN THIS PROXY STATEMENT.

EXECUTIVE COMPENSATION

Compensation Discussion ~~And~~and Analysis

Executive Summary

The Company’s executive compensation program is designed to attract, retain and motivate leadership talent, align executive compensation with short- and long-term business goals, maintain market competitiveness and drive increased stockholder value by maintaining a strong alignment between pay and performance. ~~Set forth below are highlights~~Highlights of our ~~2015~~2017 financial performance and a description of the ~~direct~~ linkage between ~~our~~ executive compensation ~~program~~ and ~~our~~ financial ~~performance.~~

performance are set forth below.

Financial Highlights

In ~~2015,~~2017, the Company continued to drive business performance and create stockholder value through its focus on innovation, productivity and ~~appropriate~~efficient use of cash. Highlights of our ~~2015~~2017 performance ~~are outlined below:~~

include the following:

One-year total stockholder return of ~~33%~~37%, three-year total stockholder return of ~~146%~~127% and five-year total stockholder return of ~~184%~~320%;

~~Record cash generated from operations of $331 million, up from $185 million in 2014;~~ and

Increased dividend ~~20% —~~19%, which resulted in approximately $80 million cash paid ~~$59~~to stockholders and paid out an additional $250 million ~~in dividends.~~for stock repurchase programs.

Financial results, including those from prior periods, are described in more detail in our Form 10-K for the fiscal year ending December 31, ~~2015.~~2017. For further detail and a comparison of Segment Profit to Operating Income, ~~from Continuing Operations before Income Taxes,~~ see Note 1918 in the Notes to the Consolidated Financial Statements in our Form 10-K for the fiscal year ended December 31, ~~2015.~~2017. All total stockholder return calculations assume reinvestment of dividends.

Pay-for-Performance Linkage

~~The Company follows a pay-for-performance philosophy~~

Pay-for-performance is the philosophical foundation for ~~both~~ our annual short-term and long-term incentive programs. Highlights of our incentive compensation programs and how they are linked to our pay-for-performance philosophy include:

85% of our CEO’s target compensation is variable — ~~either~~ tied to annual short-term orand long-term ~~incentive compensation;~~incentives;

70% of our NEOs’ long-term incentive compensation is performance-based, with the remainder provided as restricted stock units for retention purposes;

CEO compensation in ~~2015~~2017 (as shown in the Summary Compensation Table) ~~was roughly flat, excluding year-over-year decline in change in pension value,~~increased 14%, while our one-year total stockholder return increased ~~33%~~37%; and

~~Actual payouts~~Payouts under our performance share unit program averaged ~~184%~~186% of target ~~(and ranged from 153% to 200% of target)~~ over the last three completed performance cycles (each spanning three years and overlapping with each other), while total stockholder return over that same five-year period ~~increased 184%~~was 320%.

Overview

This Compensation Discussion and Analysis (“CD&A”) describes the philosophy and objectives of the compensation program for our NEOs. The Compensation and Human Resources Committee of the Board (the “Committee”) establishes and administers our executive compensation program, practices and policies. The Committee receives input from management and its executive compensation consultant, and considers competitive practices, our business objectives, stockholder interests, regulatory requirements and other relevant factors to develop our executive compensation program in an effort to most effectively drive the achievement of the Company’s business objectives.

Stockholder Input

The Committee considers input from stockholders, including the result of the annual Say-on-Pay vote, in determining compensation policies and decisions. At our ~~2015~~2017 Annual Meeting, ~~over 94% of votes cast~~the advisory vote on the ~~Say-on-Pay resolution approved~~compensation of the ~~compensation program described in our 2015 proxy statement.~~Company's NEOs received the approval of over 99% of the stockholders voting for and against this item. In an effort to maintain this strong support from stockholders, management has continued to review proxy advisor and investor concerns regarding executive compensation and ~~governance.~~governance and has selectively communicated with stockholders. The Say-on-Pay vote result was one of many factors the Committee considered in deciding to not implement any major changes to the executive compensation program in ~~2015.~~

2017.

Positive Governance Practices

The Committee assesses trends and developments in executive compensation practices and implements those that best fit with the Company’s business strategy and our stockholders’ long-term interests. Below are some of the practices we have incorporated into our compensation program, ~~which are~~as described ~~further~~ elsewhere in this Proxy Statement:



	•What We Do		What We Don't Do
þ	Median ~~Compensation Philosophy. Target 50~~^th ~~percentile of the competitive market for NEO~~ compensation philosophy	ý	No significant perquisites

•Long-term balance in compensation structure

~~Long-Term Balance.~~~~Provide balanced portfolio of long-term incentive awards to drive performance and retention~~No tax gross-ups on any CIC agreements after 2009

•

~~Independent Advisor.~~~~Annual review and engagement~~Use of independent compensation consultant ~~reporting directly to the Committee~~

No hedging of Company stock

þ • ~~Risk Assessment.~~~~Mitigate undue risk in compensation plans by performing annual~~Annual risk assessment ~~and applying caps on awards and payouts~~ ý No pledging of Company stock

•

~~Limited Perquisites.~~~~Offer limited perquisites consisting predominately of a modest monthly cash stipend~~

•

~~Robust Ownership.~~~~Require meaningful share ownership for executive officers and Board members through~~Rigorous stock ownership guidelines

No dividends on equity awards in annual grant

•Clawback provisions

~~Clawback.~~~~Permit Committee to clawback incentive compensation from executive officers~~

•

~~Repricing.~~~~Do not allow~~No repricing ~~or cash buyouts~~ of stock appreciation rights or ~~stock~~ options

•Non-Competition / Non-Solicitation restrictions

~~Excise Tax.~~~~Do not provide 280G tax gross-ups for any change-in-control agreements entered into after 2009~~

•

~~Anti-Hedging / Pledging.~~~~Do not allow hedging or pledging~~No cash buyouts of ~~Company stock~~

•

~~Dividends Withheld.~~ ~~Do not pay or accrue dividends on unvested restricted stock units, performance share units,~~underwater stock appreciation rights or ~~stock~~ options

þ	•Annual reviews of share utilization		~~Non-Competition / Non-Solicitation Restrictions~~~~. Require executives to commit to post-employment non-competition and non-solicitation restrictions as part~~
þ	Regular market assessment of ~~their equity grants~~our peer group

Executive Compensation Philosophy and Key Objectives

Pay-for-Performance

We maintain a pay-for-performance philosophy designed to reward successful execution of our business strategy and achievement of desired business results, with a focus on aligning compensation ~~opportunities~~ with the interests of our stockholders. When our financial results exceed performance goals, monetary rewards to our NEOs generally pay out at higher levels. When our financial results fall below performance goals, monetary awards to our NEOs generally pay out at lower levels and may not pay out at all.

Recent payouts under our short-term incentive program and our long-term incentive program demonstrate the strong link between Company performance and actual payments made to our NEOs. In ~~2015,~~2017, overall Company performance ~~was slightly below~~exceeded goals and, as a result, ~~most of~~ our NEOs received ~~less than~~slightly above target levels of payouts under our annual short-term incentive compensation program. Our residential heating and cooling business segment exceeded performance goals, and as a result Mr. Young (who oversees that segment) earned an above target-level payout under our annual short-term incentive compensation program. Over the last three years, our financial performance resulted in record weighted average return on invested capital of ~~22.9%~~30.8% and a compound annual growth rate of Company core net income of ~~22.5%~~16.6%. As a result, our NEOs received ~~a maximum~~an above target performance share unit payout ~~of 200% of target. These results are~~under our long-term incentive plan, consistent with our pay-for-performance approach and results-oriented compensation.

The graph below illustrates the directional alignment of pay and performance by showing changes in CEO annual ~~CEO~~ compensation (using totals from the Summary Compensation Table) versus changes in total stockholder return (“TSR”) over the last several years. The shaded bars represent the Change in Pension Value, which is impacted by interest rate changes, while the solid bars represent all other Summary Compensation Table pay.




*$ amounts are in thousands. TSR represents the change in a $100 investment from the end of ~~fiscal~~ year ~~2010~~2012 assuming reinvestment of dividends.*

Key Strategic Objectives

The strategic objectives of our executive compensation program are to:

attract, retain and motivate top executive talent;

align compensation with the achievement of short-term and long-term business goals;

maintain a market-competitive executive compensation program; and

drive increased stockholder value by maintaining a strong alignment between pay and performance.

The following table lists each element of executive compensation and how the Committee believes it correlates to our compensation philosophy and key objectives.

Executive Compensation Elements

Attract

Top

Talent

Retain &
Motivate
Top

Talent

Achieve

Short-

Term

Goals

Achieve

Long-

Term

Goals

Maintain

Market

Competiveness

Pay for

Performance

Base Salary

Short-Term Incentive Program

Long-Term Incentive Program

Performance Share Units

Restricted Stock Units

Stock Appreciation Rights

Perquisites

Benefit Programs

Process for Determining Named Executive Officer Compensation

Market Competitive Compensation

~~Market Analysis~~

To maintain a market-competitive program, the Committee uses benchmarking data when establishing executive compensation. Benchmarking against a representative peer group assists the Committee in assessing the competitiveness of our executive compensation program.

Our Company’s compensation peer group, as reviewed and approved by the Committee, included the following 15 companies (the “Compensation Peer Group”)~~, and remained unchanged from the prior year:~~



• A. O. Smith Corporation	• Fortune Brands Home & Security, Inc.	• Regal Beloit Corporation

• ~~Flowserve Corporation~~ Acuity Brands, Inc.	• Hubbell Inc.	• Rockwell Automation, Inc.

~~• Acuity Brands, Inc.~~
• Crane Company	• Kennametal Inc.		• Snap-On Incorporated

~~• Armstrong World Industries, Inc.~~
• Dover Corporation	• Owens Corning		~~• SPX Corporation~~

~~• Briggs & Stratton Corporation~~		~~• Pentair, Inc.~~		• The Timken Company

~~• Crane Company~~
• ~~Regal Beloit~~Flowserve Corporation	• Pentair, Inc.	• USG Corporation

The Committee selected ~~the members of~~ the Compensation Peer Group using the following criteria:

industry — building products, electrical components/equipment ~~household appliances~~ and industrial machinery;

revenues of approximately 0.5 to 2.0 times our revenues;

business and product mix similar to ours; and

international presence and operations.

In 2017, the Committee analyzed the Compensation Peer Group on the criteria above and adjusted the group by replacing Briggs & Stratton and Armstrong World Industries with Dover Corporation and Hubbell. These changes were made as a result of lower revenues at Briggs & Stratton and Armstrong World Industries and to move Lennox closer to the peer group median, while maintaining a close relationship to other peer criteria.

In addition to comparing our NEO compensation to the compensation provided by our Compensation Peer Group, the Committee also referenced published compensation data and other studies of compensation trends and practices (all such data and practices, including our Compensation Peer Group, is collectively referred to as the “Market”).

Pay Positioning and Compensation Mix

For ~~2015,~~2017, the Committee targeted all elements of compensation for the Company’s NEOs at the 50th percentile of the Market and granted a majority of total compensation to our NEOs in the form of incentive compensation. The ~~graphs below illustrate the 2015~~2017 target compensation mix for the CEO and the average target compensation mix for the other ~~NEOs.~~

NEOs are shown in the graphs below.



CEO —- Target Compensation Mix		Other NEOs —- Target Compensation Mix

The CEO’s target compensation mix, consistent with Market practice, has ~~a slightly greater percentage of~~more “at-risk” performance-based incentive compensation than the other NEOs due to his broad influence on Company performance.

~~Process~~

Compensation Analysis

Beyond traditional market analysis, the Committee utilizes various other compensation analyses to assist with its decision making process. Below are examples of information the Committee reviews and considers, as appropriate, when making compensation decisions:

“all in” compensation summaries and pay histories for ~~Determining Named Executive Officer Compensation~~

the CEO and executive officers

CEO realized pay analysis

CEO pay vs. performance analysis

dilution and share utilization analysis, projections and benchmarking

equity compensation expense analysis

short-term and long-term incentive design, metric and vehicle prevalence

short-term and long-term incentive plan performance results

Role of Management

The Committee ~~obtained~~obtains input from ~~various members of~~ management and the Committee’s consultant when making ~~executive~~NEO compensation decisions. The CEO ~~made~~makes recommendations to the Committee with respect to all of the elements of compensation for each ~~of the other NEOs.~~NEO, excluding himself. The CEO’s recommendations on NEO pay ~~were~~are developed in consultation with the Chief Human Resources Officer and the Committee’s compensation consultant, and ~~were~~are considered with Market data. The Committee ~~determined~~determines and ~~approved~~approves the final compensation elements and amounts to be provided to the Company’s NEOs. ~~The CEO did not make any recommendations regarding his own compensation.~~

All independent members of the Board (rather than the Committee) have responsibility for approving CEO compensation. The Committee reviewed and recommended proposed changes to CEO compensation to the independent members of the Board for approval.

Role of the Executive Compensation Consultant

In ~~2015,~~2017, the Committee engaged ~~Frederic W.~~FW Cook to provide analysis, advice and recommendations on executive compensation to the Committee. The Committee considered disclosures provided by ~~Frederic W.~~FW Cook related to its independence from the Company, the Company’s NEOs and the members of the Committee, and reviewed ~~Frederic W.~~FW Cook’s independence policy. ~~Frederic W.~~FW Cook does not provide any other services for our Company.

At the Committee’s request, ~~Frederic W.~~FW Cook performed the following services in ~~2015:~~

2017:

reviewed and opined on our executive compensation philosophy;

reviewed and opined on our Compensation Peer Group;

provided and analyzed data for various elements of executive compensation;

reviewed and opined on our executive and Board compensation programs, including NEO and Board target compensation;

presented executive compensation trends and regulatory updates to the Committee; and

provided input and perspective on various technical matters pertaining to executive compensation.

The Committee analyzed and considered the information provided by management and ~~Frederic W.~~FW Cook to determine the ~~appropriate~~ program design and the level and mix of each compensation element for the NEOs.

Components and Analysis of ~~2015~~2017 Executive Compensation

Base Salary

In establishing each NEO’s annual base salary, the Committee considered Market data, each individual’s experience and responsibilities, our annual merit budget for all employees, achievement of performance objectives, internal equity and recommendations provided by the CEO for his direct reports.

The following table provides detail regarding ~~2015 and 2016~~ base salaries for each NEO:

Name

Title
   2015
Annualized
Base Salary    Increase
Effective
April 1, 2016 2016
Annualized
Base Salary
Todd M. Bluedorn
   Chairman and Chief Executive Officer    $     1,060,000       3.0 % $     1,092,000
Joseph W. Reitmeier
   EVP, Chief Financial Officer    450,000       5.6    475,000
Douglas L. Young
   EVP, President and Chief Operating Officer, Residential Heating and Cooling    520,000       3.8    540,000
David W. Moon
   EVP, President and Chief Operating Officer, Worldwide Refrigeration    485,000       3.1    500,000
Daniel M. Sessa
   EVP, Chief Human Resources Officer    465,000       3.2    480,000



Name	Title	Base Salary January 1, 2017		Increase Effective April 1, 2017		Base Salary April 1, 2017
Todd M. Bluedorn	Chairman and Chief Executive Officer	$	1,092,000	3.0	%	$	1,125,000
Joseph W. Reitmeier	EVP, Chief Financial Officer	475,000		5.3		500,000
Douglas L. Young	EVP, President and Chief Operating Officer, Residential Heating and Cooling	540,000		3.7		560,000
Daniel M. Sessa	EVP, Chief Human Resources Officer	480,000		3.1		495,000
John D. Torres	EVP, Chief Legal Officer and Corporate Secretary	465,000		3.2		480,000
David W. Moon	Former EVP, President and Chief Operating Officer, Worldwide Refrigeration	500,000		3.0		515,000

In setting NEO base salaries, the Committee used the 50th percentile of the Market as a guideline. The base salary was set within a reasonable range of this guideline for each NEO.

Short-Term Incentive Program

Our short-term incentive program (“STI Program”) as established under the Lennox International Inc. 2010 Incentive Plan, as amended and restated (the “LII 2010 Incentive Plan”), is an annual cash-based program for our NEOs designed to reward the successful performance of our Company, our business units and each individual NEO. In early ~~2015,~~2017, the Committee approved the financial metrics and performance goals that must be achieved for any payouts to be made under our ~~short-term incentive program.~~STI Program. The ~~2015 short-term incentive program~~2017 STI Program was funded based on performance against the financial goals set forth below. The ~~2015~~2017 short-term incentive awards were based 75% on financial performance and 25% on each NEO’s individual performance.

Financial Performance. The following table summarizes the performance goals and payout opportunities under our ~~2015 short-term incentive program,~~2017 STI Program, along with Company and business unit performance for each metric.

~~2015~~

2017 Short-Term Incentive Program Summary — Financial Performance

($ in thousands)

Name(1)

Metric
   Weight Threshold Target Maximum Performance
All
   Company Core Net Income(2)    60% $     195,642    $     244,552    $     281,235    $     229,502
   Company Free Cash Flow(3)    40% 182,202    260,288    338,374    261,400
Payout Opportunity as a % of Target
   50 % 100 % 225 %
Mr. Young
   Segment Profit(4)    70% $ 230,936    $ 274,293    $ 308,810    $ 283,899
   Segment Controllable Cash Flow(5)    30% 222,261    289,094    355,927    254,518
Payout Opportunity as a % of Target
   50 % 100 % 225 %
Mr. Moon

Segment Profit(4)
   70% $ 58,312    $ 69,260    $ 77,471    $ 52,074

Segment Controllable Cash Flow(5)
   30% 38,599    50,206    61,813    66,019
Payout Opportunity as a % of Target
   50 % 100 % 225 %



Name(1)	Metric	Weight	Threshold		Target		Maximum		Performance
All	Company Core Net Income(2)	60%	$	266,307	$	332,884	$	382,817	$	339,833
	Company Free Cash Flow(3)	40%	199,500		285,000		370,500		257,485
Payout Opportunity as a % of Target			50%		100%		225%
Mr. Young	Segment Profit(4)	70%	$	315,022	$	375,569	$	420,978	$	376,907
	Segment Controllable Cash Flow(5)	30%	270,835		349,239		427,643		277,759
Payout Opportunity as a % of Target			50%		100%		225%
Mr. Moon	Segment Profit(4)	70%	$	67,866	$	80,909	$	90,692	$	80,831
	Segment Controllable Cash Flow(5)	30%	52,610		67,840		83,070		65,413
Payout Opportunity as a % of Target			50%		100%		225%

(1)

All NEOs except Mr. Young and Mr. Moon were measured 100% on overall Company financial performance, which resulted in a calculated award of ~~91%~~104% of target. As the President of our Residential Heating and Cooling segment, Mr. Young’s award was measured 50% on Residential Heating and Cooling’s financial performance and 50% on overall Company financial performance. Residential Heating and Cooling’s financial performance resulted in a calculated award of 118% of target, which when blended with the Company’s calculated award of 91% of target, resulted in a calculated award for Mr. Young of 105% of target. As the President of our Worldwide Refrigeration segment, Mr. Moon’s award was measured 50% on Worldwide Refrigeration’s financial performance and 50% on overall Company financial performance.

Cooling’s financial performance and 50% on overall Company financial performance. Residential Heating and Cooling’s financial performance resulted in a calculated award of 89% of target, which when blended with the Company’s calculated award of 104% of target, resulted in a calculated award for Mr. Young of 96% of target. As the President of our Worldwide Refrigeration segment, Mr. Moon’s award was measured 50% on Worldwide Refrigeration’s financial performance and 50% on overall Company financial performance. Worldwide Refrigeration’s financial performance resulted in a calculated award of 97% of target, which when blended with the Company’s calculated award of 104% of target, resulted in a calculated award for Mr. Moon of 101% of target.

Worldwide Refrigeration’s financial performance resulted in a calculated award of 68% of target, which when blended with the Company’s calculated award of 91% of target, resulted in a calculated award for Mr. Moon of 79% of target.

(2)

Company core net income, a non-GAAP financial measure used for incentive compensation purposes, is income from continuing operations, adjusted for ~~2015 asset impairment charges,~~2017 restructuring charges, certain product quality adjustments, certain legal charges and contingency adjustments, unrealized gains and losses on unsettled futures contracts, pension settlement charges and certain other items.

(3)

Company free cash flow, a non-GAAP financial measure used for incentive compensation purposes, is net cash provided by operating activities less purchases and sales of property, plant and equipment. Cash usage attributable to discontinued operations; working capital timing, which included unusual inventory pre-build due to regulatory changes; unplanned capital expenditures; and restructuring charges were excluded from Company free cash flow.

(4)

Segment profit, a non-GAAP financial measure used for incentive compensation purposes, is earnings from continuing operations for the applicable segment before interest expense, other expenses, and income taxes, adjusted for ~~2015 asset impairment charges,~~2017 restructuring charges, certain product quality adjustments, certain legal charges and contingency adjustments, unrealized gains and losses on unsettled futures contracts, and certain other items.


(5)	Segment controllable cash flow, a non-GAAP financial measure used for incentive compensation purposes, is segment profit, defined above, less purchases and sales of property, plant and equipment, plus or minus changes in accounts receivable, inventory and accounts payable.

Individual Performance. The Committee considered individual performance in addition to financial performance in order to further align pay with performance. The individual performance component comprised 25% of the calculated award and had the same payout range as the STI ~~plan~~Program (0% to 225%). The individual performance component was measured against specific financial, operational, strategic, and leadership objectives established for each NEO in advance of the performance measurement period as part of our performance management process. After the end of the ~~fiscal~~ year, the CEO reviewed with the Committee the extent of achievement of these established objectives by each NEO (other than the CEO). The Committee then determined and approved the individual performance component for each NEO (other than the CEO). ~~All~~The independent members of the Board determined and approved the individual performance component for the CEO.

Targets and Payouts. Under the ~~short-term incentive program,~~STI Program, target payout opportunities are determined as a percentage of base salary. The target payout opportunities are based on Market data using the 50th percentile as a guideline. Each NEO’s target percentage fits within this guideline and was unchanged for ~~2015.~~

2017.

Based on analysis of the Market data and internal equity considerations, the Committee (or with respect to the CEO, the independent Board members) set the following short-term incentive targets for ~~2015.~~2017. Based on actual financial and individual performance, the Committee (or with respect to the CEO, the independent Board members) approved the following ~~2015~~2017 payouts for each NEO:

~~2015~~

2017 Short-Term Incentive Targets and Payouts

Name
   2015 STI Target as a
% of Base Salary 2015 STI Target    2015 STI Payout    2015 STI Payout as a
% of Target
Mr. Bluedorn
   125 % $     1,315,625       $     1,203,534       91 %
Mr. Reitmeier
   70    310,625       266,400       86
Mr. Young
   70    360,500       377,768       105
Mr. Moon
   70    336,875       267,782       79
Mr. Sessa
   70    322,875       295,366       91



Name	2017 STI Target as a % of Base Salary		2017 STI Target		2017 STI Payout as a % of Target		2017 STI Payout
Mr. Bluedorn	125	%	$	1,395,938	104	%	$	1,451,775
Mr. Reitmeier	70		345,625		104		359,450
Mr. Young	70		388,500		96		374,708
Mr. Sessa	70		343,875		104		357,630
Mr. Torres	70		333,375		104		346,710
Mr. Moon	70		357,875		101		360,380

We include the short-term incentive payments made to the NEOs for ~~2015,~~2017, which were approved by the Committee on February ~~29, 2016~~26, 2018 and paid on March 15, ~~2016,~~2018, in the Summary Compensation Table under “Non-Equity Incentive Plan Compensation.”

Long-Term Incentive Program

We have a long-term incentive program designed to incentivize those employees who have principal responsibility for our long-term profitability. We believe participation in our long-term incentive program ~~helps align~~aligns the interests of our NEOs with the interests of our stockholders.

We use a mix of performance share units (“PSUs”), restricted stock units (“RSUs”) and stock appreciation rights (“SARs”) in our long-term incentive program. PSUs and SARs reward performance, as measured by achievement of specified financial objectives for PSUs and stock price growth for SARs. RSUs help us retain key members of management through time-based vesting. The Committee allocated the mix of elements in our long-term incentive program in a manner designed to drive Company performance, retain key talent, and provide competitive compensation.

For ~~2015,~~2017, the long-term incentive award allocations for our NEOs were as follows:

The Committee determines the grant date for all long-term incentive awards, and has a long-standing practice of granting all awards at its regularly scheduled December meeting. Although awards may also be granted in special circumstances or upon hire for certain executives, no out-of-cycle grants were made to any NEO in ~~2015.~~2017. The Committee sets the exercise price of our SARs at 100% of fair market value, which is defined as the average of the high and low New York Stock Exchange (“NYSE”) trading prices of our common stock on the date of grant.

The target award values under our long-term incentive program are based on Market data for similar positions using the 50th percentile as a guideline. The number of shares available for grant under the LII 2010 Incentive Plan is also considered. In December ~~2015,~~2017, the Committee established the target award values at or near the 50th percentile of the Market for all NEOs. When determining the actual award sizes for each NEO, the Committee and independent Board members considered the NEO’s time in position, individual performance and potential, the NEO’s impact on the financial performance of the Company, and internal equity.

Once the Committee determined the actual long-term incentive award values for each NEO for the ~~2015~~2017 grants, 50% of the value was provided as PSUs, 30% as RSUs and 20% as SARs.

The following table summarizes the award values and number of awards granted for each NEO:

December 2015 Award Value Number of Awards Granted
Name
PSUs RSUs SARs Total PSUs(1) RSUs(1) SARs(2) Total
Mr. Bluedorn
$     2,300,000 $     1,380,000 $     920,000 $     4,600,000 16,958    10,175    36,610    63,743
Mr. Reitmeier
500,000    300,000    200,000    1,000,000    3,687    2,212    7,959    13,858
Mr. Young
600,000    360,000    240,000    1,200,000    4,424    2,654    9,550    16,628
Mr. Moon
550,000    330,000    220,000    1,100,000    4,055    2,433    8,754    15,242
Mr. Sessa
500,000    300,000    200,000    1,000,000    3,687    2,212    7,959    13,858



	December 2017 Award Value								Number of Awards Granted
Name	PSUs		RSUs		SARs		Total		PSUs(1)	RSUs(1)	SARs(2)	Total
Mr. Bluedorn	$	2,500,000	$	1,500,000	$	1,000,000	$	5,000,000	12,929	7,758	31,299	51,986
Mr. Reitmeier	525,000		315,000		210,000		1,050,000		2,715	1,629	6,573	10,917
Mr. Young	625,000		375,000		250,000		1,250,000		3,232	1,939	7,825	12,996
Mr. Sessa	525,000		315,000		210,000		1,050,000		2,715	1,629	6,573	10,917
Mr. Torres	525,000		315,000		210,000		1,050,000		2,715	1,629	6,573	10,917
Mr. Moon	—		—		—		—		—	—	—	—


(1)	The number of PSUs and RSUs was determined by dividing the corresponding target award value by the fair market value of our common stock on the NYSE averaged over the 30 calendar days ending on ~~December 2, 2015~~November 29, 2017 ($~~135.626)~~193.36).


(2)	The number of SARs granted was determined by dividing the corresponding target award value by the Black-Scholes value of our common stock based on the 30 calendar day average of our common stock as of ~~December 2, 2015~~November 29, 2017 ($~~25.13)~~31.95).

PSUs. To maintain our strong focus on long-term Company performance, we granted 50% of the December ~~2015~~2017 long-term incentive award in the form of PSUs. PSUs generally vest at the end of a three-year performance period. If at least the threshold performance level has been achieved at the end of the performance period, the PSUs are distributed in the form of Company common stock based on the actual performance achieved. Dividends are not earned or paid on PSU awards during the three-year performance period. The Committee determines the measurement criteria annually, selecting financial metrics and setting performance goals that will enhance stockholder value. The Committee certifies the financial performance levels following the end of the performance period and the Company distributes any earned shares.

The key attributes of the PSUs granted in December ~~2012,~~2014, which vested on December 31, ~~2015,~~2017, are summarized in the following table along with the financial performance goals and payout opportunities versus actual performance. In ~~2015,~~2017, NEOs earned a payout of ~~200%~~173.1% of target for the PSUs granted in December ~~2012.~~2014. The payout value is reflected in the ~~Fiscal 2015~~2017 Option/SAR Exercises and Stock Vested Table in the “Stock Awards — Value Realized on Vesting” column.

December ~~2012~~2014 PSU Grant

(for the January 1, ~~2013~~2015 — December 31, ~~2015~~2017 Performance Period)

Metric(1)
   Weight
Measurement Period
   Threshold Target Maximum Actual
Return on Invested Capital (“ROIC”)
   50%    3-year weighted average (20% lowest year, 40% other two years)    10% 13% 16% 22.9%
Company Core Net Income
   50%    3-year compound annual growth rate    -10% 6% 12% 25.5%
Payout as a % of Target Award
         50% 100% 200% 200%



Metric	Weight	Measurement Period	Threshold	Target	Maximum	Actual
Return on Invested Capital (“ROIC”)(1)	50%	3-year weighted average (20% lowest year, 40% other two years)	14%	20%	26%	30.8%
Company Core Net Income	50%	3-year compound annual growth rate	6%	12%	22%	16.6%
Payout as a % of Target Award			50%	100%	200%	173.1%

(1)

Net operating profit after tax (NOPAT), a component of ROIC and a non-GAAP financial measure used for incentive compensation purposes, is income from continuing operations, adjusted for ~~2015 asset impairment charges,~~2017 restructuring charges, ~~special inventory write down,~~ certain product quality adjustments, certain legal charges and contingency adjustments, unrealized gains and losses on unsettled futures contracts, pension settlement charges and certain other items.

The key attributes of the PSUs granted in December ~~2015~~2017 are summarized in the following table. The Committee established the ROIC performance goals based on its assessment of desired return relative to the cost of capital as well as historical and projected ROIC outcomes. Similarly, the Committee set Company core net

income growth performance goals based on historical results, projected outcomes of that measure, and expected market conditions. ~~Over the last six completed performance cycles, including the cycle noted above, the average payout was 115%.~~ While specific forward-looking performance goals are not included in the table below in light of competitive sensitivities, the degrees of difficulty required to achieve a payout are included.

December ~~2015~~2017 PSU Grant

(for the January 1, ~~2016~~2018 — December 31, ~~2018~~2020 Performance Period)

Metric
Weight
Rationale for
Selection

Measurement Period

Threshold
Target Maximum
ROIC
50% Measures efficient use of capital; higher ROIC correlates to greater cash flow 3-year weighted average (20% lowest year, 40% other two years) No payout occurs unless ROIC exceeds the Company’s estimated cost of capital; Target payout occurs at roughly two times the Company’s estimated cost of capital
Company Core Net Income Growth 50% Measures profitability; higher Company core net income correlates with higher earnings per share 3-year compound annual growth rate Target payout requires low double digit core net income compound annual growth rate
Payout as a % of Target Award
50% 100% 200%

Metric

Weight

Rationale for

Selection

Measurement Period

Threshold

Target

Maximum

ROIC

50%

Measures efficient use of capital; higher ROIC correlates to greater cash flow

3-year weighted average (20% lowest year, 40% other two years)

No payout occurs unless ROIC exceeds the Company’s estimated cost of capital; Target payout occurs at roughly three times the Company’s estimated cost of capital

Company Core Net Income Growth

50%

Measures profitability; higher Company core net income correlates with higher earnings per share

3-year compound annual growth rate

Target payout requires low double digit core net income compound annual growth rate

Payout as a % of Target Award

50%

100%

200%

The PSUs granted to our NEOs in ~~2015~~2017 are included in the ~~Fiscal 2015~~2017 Grants of Plan-Based Awards Table in the “Estimated Future Payouts Under Equity Incentive Plan Awards” column.

RSUs. To support our retention efforts, the Committee granted the NEOs 30% of the December ~~2015~~2017 long-term incentive award in the form of RSUs. RSUs generally vest and are distributed in shares of our common stock three years following the date of grant if the recipient remains an employee of the Company and all other conditions of the award are met. Dividends are not earned or paid on RSUs during the three-year vesting period. The number of shares underlying RSUs granted to our NEOs in ~~2015~~2017 is included in the ~~Fiscal 2015~~2017 Grants of Plan-Based Awards Table in the “All Other Stock Awards: Number of Shares of Stock or Units” column.

SARs. To incentivize NEOs to grow our business and deliver increased returns to our stockholders, the Committee granted the NEOs 20% of the December ~~2015~~2017 award in the form of SARs. SARs vest in one-third increments on each anniversary of the date of grant. Upon the exercise of vested SARs, the increase between the fair market value of our common stock on the date of grant and the fair market value on the date of the SAR exercise is paid in Company common stock. The grant date fair value and the SAR exercise price are determined on the date of grant. SARs granted in ~~2015~~2017 expire seven years from the date of grant. The number of SARs granted to our NEOs in ~~2015~~2017 is included in the ~~Fiscal 2015~~2017 Grants of Plan-Based Awards Table in the “All Other Option Awards: Number of Securities Underlying Options” column.

Perquisites

We believe providing reasonable perquisites is a market-competitive practice to attract and retain top executive talent. Rather than offering individual perquisites, however, we provide a monthly cash stipend to each of our NEOs to allow more flexibility and choice. Our NEOs have full discretion on how the cash stipend is spent and it is not tracked by the Company after the money is paid. In addition, we offer the installation of Company products and equipment at each NEO’s home to promote our brand to business and personal guests. The value of the Company products and equipment is included as taxable income to the NEO.

Benefit Programs

To attract top executive talent and as a market-competitive practice, we provide certain benefit programs to our NEOs that are in addition to those provided to our employees generally. The following table summarizes the additional benefit programs in place during ~~2015~~2017 and the purpose of each program.

Additional Benefit Programs Offered to NEOs in ~~2015~~

2017



Plan	Type	Purpose
Supplemental Retirement Plan	Non-Qualified Defined Benefit	Provide market-competitive retirement benefit by providing higher accruals and by permitting accruals that otherwise could not occur because of limitations on compensation under the Code.
Life Insurance Plan	Company-Sponsored Life Insurance	Provide market-competitive life insurance benefits; $3 million in coverage for our CEO and minimum of $1 million for other NEOs.

Additional Information Regarding Executive Compensation

Other agreements and policies ~~that are~~ important to a stockholder’s understanding of the Company’s overall executive compensation program structure are described below.

Employment Agreements and Change in Control Agreements

We have employment agreements and change in control (“CIC”) agreements with each NEO ~~that have been~~as reviewed and approved by the Committee. We believe employment agreements are helpful in attracting and retaining top executive talent and for financial and business planning purposes. We believe CIC agreements are necessary to (1) retain key executives during periods of uncertainty; (2) enable executives to objectively evaluate, negotiate and execute a CIC transaction; (3) encourage executives to remain focused on running the business rather than seeking other employment in the event of a possible CIC; (4) preserve stockholder value by providing continuity of management during a transition period; and (5) provide benefit to the Company in the form of restrictive covenants, such as non-compete and non-solicitation provisions. We do not provide ~~280G~~ tax gross-ups for any ~~change-in-control~~CIC agreements entered into after 2009.

Our employment agreements and CIC agreements, and the potential costs associated with each, are discussed in detail under “Potential Payments Upon Termination or Change in Control.”

Stock Ownership Guidelines

The Company has stock ownership guidelines for the CEO and other NEOs. We believe stock ownership by executives aligns the interests of executives with the interests of our stockholders and motivates executives to build long-term stockholder value.

The following chart sets forth, as of December 31, ~~2015,~~2017, for each NEO, the stock ownership requirements as a ~~percentage~~multiple of base salary, the total number of shares and unvested RSUs counted toward the stock ownership requirements, and the value of the shares and unvested RSUs ~~counted toward the stock ownership requirements~~ as a ~~percentage~~multiple of base salary. All of our NEOs met our stock ownership guidelines as of December 31, ~~2015.~~2017. NEOs are given five years from the date of appointment as an NEO to meet the guidelines.

Name

Ownership
Requirement as a % of
Base Salary

Total Number of
Shares and
Unvested RSUs

Stock Ownership as %
of Base Salary(1)
Mr. Bluedorn
   500%    211,343    2,297%
Mr. Reitmeier
   300        16,720       428
Mr. Young
   300        60,452    1,340
Mr. Moon
   300      100,011    2,376
Mr. Sessa
   300        34,792       862



Name	Ownership Requirement as a Multiple of Base Salary	Total Number of Shares and Unvested RSUs	Stock Ownership as Multiple of Base Salary(1)
Mr. Bluedorn	5X	173,660	27.1X
Mr. Reitmeier	3X	15,418	5.4X
Mr. Young	3X	55,935	17.6X
Mr. Sessa	3X	45,655	16.2X
Mr. Torres	3X	10,660	3.9X
Mr. Moon	3X	113,908	38.9X


(1)	Based on the average daily closing price for ~~2015~~2017 of ~~$115.23.~~$175.84.

The Committee oversees and administers the stock ownership guidelines. If an NEO fails to comply with the guidelines, the Committee will determine any appropriate corrective measures to be taken.

Clawback Policy

Our Company has an incentive compensation clawback policy for the CEO and the other NEOs. Under this policy, in the event of any fraud or misconduct that results in a restatement of our Company’s financial results within three years of the filing of the original financial results, the Committee can recoup and cancel cash and equity-based incentive compensation of each person involved in such fraud or misconduct.

Prohibition on Hedging / Pledging Policy

The Company’s Insider Trading Policy prohibits directors, NEOs and all other employees from trading in any interest, security or position relating to the future price of Company securities, such as a put, call, swap, short sale, hedge or any other type of derivative security. It also prohibits directors, NEOs and all other employees from pledging Company securities as collateral for a loan, which would include purchases of Company securities on margin.

Tax and Accounting Implications

Section 162(m) Compliance

Effective for taxable years beginning after December 31, 2017, The Tax Cuts and Jobs Act changed certain aspects of federal income taxation of executive compensation, including elimination of the "performance-based" compensation exemption to Section 162(m) which, if certain requirements were satisfied, allowed a company to deduct “performance-based” compensation in excess of $1 million to NEOs. The Committee ~~considers~~will continue to consider the income tax consequences to our Company when analyzing our executive compensation program. Section 162(m) of the Code limits a Company’s ability to deduct compensation paid in excess of $1 million to certain NEOs, unless the compensation meets certain stockholder-approved performance requirements. The Committee has designed several elements of our executive compensation program to qualify for the “performance-based” exemption. For example, compensation under our short-term incentive program and awards of PSUs and SARs are meant to be performance-based, and are exempt from the limitations imposed by Section 162(m) of the Code. If granting awards or providing other executive compensation is consistent with Market data, our compensation philosophy or our strategic business goals, the Committee may provide executive compensation that is not fully deductible. ~~For example, RSUs meet our objective of key talent retention, but do not meet the performance-based exemption.~~

Non-qualified Deferred Compensation

In addition to the non-qualified Supplemental Retirement Plan discussed previously, our Company also maintains a frozen non-qualified Profit Sharing Restoration Plan. Both of these deferred compensation plans are administered in compliance with Section 409A of the Code.

Accounting for Stock-Based Awards

When developing NEO compensation, the Committee considered the accounting consequences (in accordance with the requirements of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation (“FASB ASC Topic 718”)) of the program design and award ~~levels. The Committee reviewed accounting cost models~~levels, and structured the Company’s executive compensation program ~~in a manner that considered the cost and benefits of the various program elements.~~

accordingly.

Compensation Committee Report

The Compensation and Human Resources Committee has reviewed and discussed the foregoing CD&A with management. Based on this review and discussion, the Committee recommended to the Board that the CD&A be included in this Proxy Statement and incorporated by reference in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2015,~~2017, which was filed with the SEC on February 16, ~~2016.~~

2018.

Submitted by the Compensation and Human Resources Committee of the Board:



John E. Major (Chairperson)	John W. Norris, III
Kim K.W. Rucker	Karen H. Quintos	~~Terry D. Stinson~~
Todd J. Teske

Summary Compensation Table

The following table provides information regarding the total compensation of each of the Company’s NEOs for the ~~fiscal~~ years ended December 31, ~~2015, 2014~~2017, 2016 and ~~2013.~~

Name and Principal Position
Year Salary
($) Bonus
($) Stock
Awards
($)(1) Option
Awards
($)(2) Non-Equity
Incentive Plan
Compensation
($) Change
in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings ($)(3) All
Other
Compensation
($)(4) Total
($)
Todd M. Bluedorn
2015    1,052,500    0    3,427,115    832,878    1,203,534    900,737    45,900    7,462,664
Chairman and Chief Executive Officer

2014
2013

1,022,500
995,000


0
0



3,370,408
3,287,121

841,815
846,621

1,300,000
2,226,935

2,649,028
579,736

104,108
47,833

9,287,859
7,983,246

Joseph W. Reitmeier(5)
2015    443,750    0    745,091    181,067    266,400    180,834    46,028    1,863,170
Executive Vice President and
Chief Financial Officer

2014
2013

415,000
381,250

0
100,000

766,062
695,767

191,326
179,139

295,817
477,840

320,561
31,568

100,648
46,025

2,089,414
1,911,589

Douglas L. Young
2015    515,000    0    894,008    217,263    377,768    94,417    46,400    2,144,856
Executive Vice President and
Chief Operating Officer, Residential H&C

2014
2013

495,000
467,500


0
0



880,883
850,425

220,010
218,948

492,584
656,469

1,388,781
11,947

45,600
66,444

3,522,858
2,271,733

David W. Moon
2015    481,250    0    819,486    199,154    267,782    249,295    46,165    2,063,132
Executive Vice President, President and Chief Operating Officer, Worldwide Refrigeration

Daniel M. Sessa
2015    461,250    0    745,091    181,067    295,366    224,827    97,379    2,004,980
Executive Vice President and Chief Human Resources Officer

2014
2013

446,250
431,250


0
0



766,062
773,057

191,326
199,044

317,162
562,507

716,093
134,127

45,691
46,863

2,482,584
2,146,848

2015.



Name and Principal Position	Year	Salary ($)	Stock Awards ($)(1)	Option Awards ($)(2)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3)	All Other Compensation ($)(4)	Total ($)
Todd M. Bluedorn	2017	1,116,750	4,086,407	1,011,678	1,451,775	3,740,864	47,086	11,454,560
Chairman and Chief Executive	2016	1,084,000	3,876,723	954,887	2,620,028	1,423,602	46,743	10,005,983
Officer	2015	1,052,500	3,427,115	832,878	1,203,534	900,737	45,900	7,462,664
Joseph W. Reitmeier	2017	493,750	858,092	212,459	359,450	508,667	107,975	2,540,393
Executive Vice President and	2016	468,750	807,550	198,938	634,463	262,074	46,235	2,418,010
Chief Financial Officer	2015	443,750	745,091	181,067	266,400	180,834	46,028	1,863,170
Douglas L. Young	2017	555,000	1,021,453	252,927	374,708	1,303,828	47,702	3,555,618
Executive Vice President and	2016	535,000	969,031	238,716	645,900	314,360	45,900	2,748,907
Chief Operating Officer, Residential H&C	2015	515,000	894,008	217,263	377,768	94,417	46,400	2,144,856
Daniel M. Sessa	2017	491,250	858,092	212,459	357,630	985,670	46,476	2,951,577
Executive Vice President and Chief	2016	476,250	807,550	198,938	644,614	400,106	46,186	2,573,644
Human Resources Officer	2015	461,250	745,091	181,067	295,366	224,827	97,379	2,004,980
John D. Torres	2017	476,250	858,092	212,459	346,710	911,590	46,509	2,851,610
Executive Vice President, Chief
Legal Officer and Corporate Secretary
David W. Moon (5)	2017	511,250	—	—	360,380	353,328	2,107,385	3,332,343
Former Executive Vice President	2016	496,250	888,366	218,815	582,444	364,364	46,361	2,596,600
and Chief Operating Officer, Worldwide Refrigeration	2015	481,250	819,486	199,154	267,782	249,295	46,165	2,063,132

(1)

The amounts shown represent the grant date fair value of the aggregate amount of all stock awards (prior to any assumed forfeitures related to service-based vesting conditions, where applicable) for each year, in accordance with FASB ASC Topic 718, in connection with RSUs and PSUs granted under the LII 2010 Incentive Plan. Assumptions used in calculating these amounts are described in Note 14 of the Consolidated Financial Statements for the fiscal year ended December 31, ~~2015,~~2017, included in our Form 10-K filed with the SEC on February 16, ~~2016.~~2018. Amounts for ~~2015~~2017 PSUs reflect the most probable outcome for the awards on December 31, ~~2015~~2017 valued at the date of grant in accordance with FASB ASC Topic 718. If the PSUs were valued at maximum performance levels, the total PSU value at grant date would equal:

Name
   Year    PSU Value at Maximum
Performance Levels ($)
Todd M. Bluedorn
   2015       4,283,862
   2014       4,212,988
   2013       4,108,902
Joseph W. Reitmeier
   2015       931,395
   2014       957,578
   2013       869,767
Douglas L. Young
   2015       1,117,573
   2014       1,101,082
   2013       1,063,031
David W. Moon
   2015       1,024,358
Daniel M. Sessa
   2015       931,395
   2014       957,578
   2013       966,321



Name	Year	PSU Value at Maximum Performance Levels ($)
Todd M. Bluedorn	2017	5,107,860
	2016	4,845,904
	2015	4,283,862
Joseph W. Reitmeier	2017	1,072,615
	2016	1,009,438
	2015	931,395
Douglas L. Young	2017	1,276,866
	2016	1,211,326
	2015	1,117,573
Daniel M. Sessa	2017	1,072,615
	2016	1,009,438
	2015	931,395
John D. Torres	2017	1,072,615


David W. Moon	2017	—
	2016	1,110,382
	2015	1,024,358


(2)	The amounts shown represent the grant date fair value of the aggregate amount of all SAR awards (prior to any assumed forfeitures related to service-based vesting conditions, where applicable) for each year, in

accordance with FASB ASC Topic 718, in connection with SARs granted under the LII 2010 Incentive Plan. Assumptions used in calculating these amounts are included in Note 14 of the Consolidated Financial Statements for the fiscal year ended December 31, ~~2015,~~2017, included in our Form 10-K filed with the SEC on February 16, ~~2016.~~2018.

(3)

The amounts shown represent the aggregate change in the actuarial present value of accumulated pension benefits that accrued during the applicable year under our Supplemental Retirement Plan and frozen Consolidated Pension Plan, each as discussed under “Retirement Plans,” as a result of changes in the valuation discount rate, changes in compensation, and an additional one year of service. No above-market interest on nonqualified deferred compensation was earned.


(4)	The amounts shown include perquisites and other compensation. The following table identifies the amounts attributable to each category of perquisites and other compensation in ~~2015~~2017 for each NEO.

   Perquisites    Other Compensation
Name
   Cash
Stipend    Company
Equipment
and Installation    Matching
Charitable
Contributions    Term Life
Insurance
Premiums    Retirement
Contributions    Total
Todd M. Bluedorn
   $ 30,000       —       —       —       $ 15,900       $ 45,900
Joseph W. Reitmeier
   30,000       —       —       $ 128       15,900       46,028
Douglas L. Young
   30,000       —       $ 500       —       15,900       46,400
David W. Moon
   30,000       —       —       265       15,900       46,165
Daniel M. Sessa
   30,000       $ 51,479       —       —       15,900       97,379



	Perquisites				Other Compensation
Name	Cash Stipend		Company Equipment and Installation		Term Life Insurance Premiums		Retirement Contributions		Other	Total
Todd M. Bluedorn	$	30,000	$	—	$	886	$	16,200		$	47,086
Joseph W. Reitmeier	30,000		61,467		308		16,200			107,975
Douglas L. Young	30,000		1,403		99		16,200			47,702
Daniel M. Sessa	30,000		—		276		16,200			46,476
John D. Torres	30,000		—		309		16,200			46,509
David W. Moon	30,000		38,165		286		16,200		2,022,734	2,107,385

The values attributable to each item listed above are calculated as follows:

•

~~Cash Stipend~~ ~~— actual cash paid to each NEO in lieu of individual perquisites.~~

•

~~Company Equipment and Installation~~ — Company equipment is based on the purchase price of the equipment, adjusted in accordance with our employee rebate program, and installation of such equipment is based on the cost for installation paid by the Company in 2015. The value of the Company equipment was included as taxable income to the NEO.

•

~~Matching Charitable Contributions~~— We offer an employee matching charitable contribution program to all employees to promote our community values by matching gifts up to $1,000 per year. The value for this table is based on contributions made on the NEO’s behalf and accrued in 2015.

•

~~Term Life Insurance Premiums~~ — The amounts shown are based on the incremental cost paid in 2015 on behalf of each NEO for Basic Life and Basic Accidental Death and Dismemberment over and above the premiums we would otherwise pay under our life insurance program for other employees.

•

~~Retirement Contributions~~ ~~— based on Company contributions made under our qualified 401(k) Plan in 2015.~~

~~(5)~~

~~Mr. Reitmeier received a $100,000 cash payment in 2013 pursuant to a program he participated in prior to being appointed Executive Vice President and Chief Financial Officer.~~

~~Fiscal 2015~~

Cash Stipend — actual cash paid to each NEO in lieu of individual perquisites.

Company Equipment and Installation — Company equipment is based on the purchase price of the equipment, adjusted in accordance with our employee rebate program. Installation of this equipment is based on the cost for installation paid by the Company in 2017.

Term Life Insurance Premiums — The amounts shown are based on the incremental cost paid in 2017 on behalf of each NEO for Basic Life and Basic Accidental Death and Dismemberment over and above the premiums we would otherwise pay under our life insurance program for other employees.

Retirement Contributions — based on Company contributions made under our qualified 401(k) Plan in 2017.

(5) During 2017, named executive officer, Mr. Moon, was removed from his position as Executive Vice President, President and Chief Operating Officer, Worldwide Refrigeration. In connection with his removal, and pursuant to the terms of his employment agreement with the Company, he entered into a Separation and General Release Agreement containing a release of claims and certain restrictive covenants regarding confidentiality, non-competition, non-solicitation, and non-disparagement obligations, and which provided for him to be paid $2,022,734 in cash and certain medical benefits. The Separation and General Release Agreement was filed on the Company’s Annual Report on Form 10-K. The amount reported in the "All Other Compensation" column includes severance related payments, perquisites, and other compensation further explained in Note 4 above.

2017 Grants of Plan-Based Awards

The following table provides information regarding short-term incentive awards and long-term incentive awards (PSUs, RSUs and SARs) granted under the LII 2010 Incentive Plan to our NEOs in ~~2015.~~

Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards(1) Estimated Future
Payouts Under Equity
Incentive Plan
Awards(2) All Other Stock
Awards: Number
of Shares of
Stock or Units
(#)(3) All Other Option
Awards: Number
of Securities
Underlying
Options
(#)(4) Exercise or
Base Price of
Option
Awards
($/Sh)(5) Closing
Market
Price on
Date of
Grant
($/Sh) Grant Date Fair
Value of Stock
and Option
Awards
($)(6)
Name
Grant
Date Threshold
($) Target
($) Max.
($) Threshold
(#) Target
(#) Max.
(#)

Todd M.
Bluedorn
—    657,813    1,315,625    2,960,156
12/11/15    8,479    16,958    33,916    2,141,931
12/11/15    10,175    1,285,184
12/11/15    36,610    131.94    130.16    832,878
Joseph W. Reitmeier —    155,313    310,625    698,906
12/11/15    1,844    3,687    7,374    465,698
12/11/15    2,212    279,393
12/11/15    7,959    131.94    130.16    181,067
Douglas L. Young —    180,250    360,500    811,125
12/11/15    2,212    4,424    8,848    558,787
12/11/15    2,654    335,221
12/11/15    9,550    131.94    130.16    217,263
David W. Moon —    168,438    336,875    757,969
12/11/15    2,028    4,055    8,110    512,179
12/11/15    2,433    307,307
12/11/15    8,754    131.94    130.16    199,154
Daniel M. Sessa —    161,438    322,875    726,469
12/11/15    1,844    3,687    7,374    465,698
12/11/15    2,212    279,393
12/11/15    7,959    131.94    130.16    181,067

2017.



		Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)			Estimated Future Payouts Under Equity Incentive Plan Awards(2)			All Other Stock Awards: Number of Shares of Stock or Units (#)(3)	All Other Option Awards: Number of Securities Underlying Options (#)(4)	Exercise or Base Price of Option Awards ($/Sh)(5)	Closing Market Price on Date of Grant ($/Sh)	Grant Date Fair Value of Stock and Option Awards ($)(6)
Name	Grant Date	Threshold ($)	Target ($)	Max. ($)	Threshold (#)	Target (#)	Max. (#)
Todd M. Bluedorn	—	697,969	1,395,938	3,140,859
	12/8/2017				6,465	12,929	25,858					2,553,930
	12/8/2017							7,758				1,532,477
	12/8/2017								31,299	205.53	206.66	1,011,678
Joseph W. Reitmeier	—	172,813	345,625	777,656
	12/8/2017				1,358	2,715	5,430					536,308
	12/8/2017							1,629				321,785
	12/8/2017								6,573	205.53	206.66	212,459
Douglas L. Young	—	194,250	388,500	874,125
	12/8/2017				1,616	3,232	6,464					638,433
	12/8/2017							1,939				383,020
	12/8/2017								7,825	205.53	206.66	252,927
Daniel M. Sessa	—	171,938	343,875	773,719
	12/8/2017				1,358	2,715	5,430					536,308
	12/8/2017							1,629				321,785
	12/8/2017								6,573	205.53	206.66	212,459
John D. Torres	—	166,688	333,375	750,094
	12/8/2017				1,358	2,715	5,430					536,308
	12/8/2017							1,629				321,785
	12/8/2017								6,573	205.53	206.66	212,459
David W. Moon	—	178,938	357,875	805,219
	12/8/2017				—	—	—					—
	12/8/2017							—				—
	12/8/2017								—	—	—	—


(1)	The amounts shown represent award opportunities under our short-term incentive program for ~~2015.~~2017. The actual awards were paid March 15, ~~2016~~2018 in the amounts included in the Summary Compensation Table.


(2)	The amounts shown represent the number of PSUs granted, which to the extent earned, will vest and be distributed in shares of our common stock at the end of the three-year performance period ending December 31, ~~2018.~~2020.


(3)	The amounts shown represent the number of RSUs granted, which vest and will be distributed in shares of our common stock on the third anniversary of the date of grant.


(4)	The amounts shown represent the number of SARs granted, which vest in one-third increments on each anniversary of the date of grant and expire seven years from the date of grant.


(5)	The amounts shown reflect the exercise price of SARs granted, based on the average of the high and low NYSE trading prices of our common stock on the date of grant.


(6)	The amounts shown represent the grant date fair values of PSUs, RSUs and SARs, calculated in accordance with FASB ASC Topic 718. The grant date fair value for SARs was determined using the Black-Scholes

valuation model. The grant date fair value for the PSU and RSU awards equals the dividend-discounted value of our common stock on the date of grant. The assumptions used to calculate the grant date fair values of such awards are set forth below.

      Assumptions
Grant Date
   Award    Volatility
(%)    Expected Life
(Years)    Dividend Yield
(%)    Risk Free
Interest Rate
(%)    FMV Based on
Average High/
Low NYSE Trading
Prices on Date of
Grant ($)    Grant Date
Fair Value
Per Share
($)
12/11/2015
   PSU          1.46          131.94       126.308
12/11/2015
   RSU          1.46          131.94       126.308
12/11/2015
   SAR    23.78       4.00       1.61       1.36       131.94       22.750



		Assumptions
Grant Date	Award	Volatility (%)	Expected Life (Years)	Dividend Yield (%)	Risk Free Interest Rate (%)	FMV Based on Average High/ Low NYSE Trading Prices on Date of Grant ($)	Grant Date Fair Value Per Share ($)
12/8/2017	PSU	—	—	1.32	—	205.53	197.535
12/8/2017	RSU	—	—	1.32	—	205.53	197.535
12/8/2017	SAR	19.97	3.95	1.47	2.02	205.53	32.323

Outstanding Equity Awards at ~~Fiscal 2015~~2017 Year-End

The following table provides information regarding all outstanding equity awards held by our NEOs as of December 31, ~~2015.~~

   Options/SAR Awards(1)    Stock Awards
Name
   Number of
Securities
Underlying
Unexercised
Options/
SARs (#)
Exercisable(1)    Number of
Securities
Underlying
Unexercised
Options/
SARs (#)
Unexercisable(1)    Option/
SAR
Exercise
Price
($/Sh)(2)    Option/
SAR
Expiration
Date    Number of
Shares or
Units of
Stock
That Have
Not
Vested
(#)(3)    Market
Value of
Shares or
Units of
Stock
That Have
Not
Vested
($)(4)    Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
(#)(5)    Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not
Vested
($)(4)
Todd M. Bluedorn
   30,548       0       36.935       12/10/2016       40,294       5,032,721       117,354       14,657,515
   54,212       0       46.780       12/9/2017
   83,146       0       34.060       12/8/2018
   56,014       0       51.395       12/7/2019
   30,062       15,031       81.140       12/13/2020
   14,351       28,702       92.640       12/12/2021
   0       36,610       131.940       12/11/2022
Joseph W. Reitmeier
   869       0       36.935       12/10/2016       8,812       1,100,619       25,689       3,208,556
   2,096       0       46.780       12/9/2017
   3,371       0       34.060       12/8/2018
   9,621       0       51.110       12/6/2019
   6,366       3,183       81.105       12/12/2020
   3,261       6,524       92.640       12/12/2021
   0       7,959       131.940       12/11/2022
Douglas L. Young
   2,042       0       46.780       12/9/2017       10,486       1,309,701       30,530       3,813,197
   7,509       0       34.060       12/8/2018
   15,120       0       51.110       12/6/2019
   7,780       3,891       81.105       12/12/2020
   3,750       7,502       92.640       12/12/2021
   0       9,550       131.940       12/11/2022
David W. Moon
   15,027       0       36.935       12/10/2016       10,102       1,261,740       29,619       3,699,413
   12,252       0       46.780       12/9/2017
   19,101       0       34.060       12/8/2018
   15,120       0       51.110       12/6/2019
   7,780       3,891       81.105       12/12/2020
   3,587       7,176       92.640       12/12/2021
   0       8,754       131.940       12/11/2022
Daniel M. Sessa
   2,042       0       46.780       12/9/2017       9,184       1,147,082       26,927       3,363,182
   7,428       0       34.060       12/8/2018
   10,308       0       51.110       12/6/2019
   7,073       3,537       81.105       12/12/2020
   3,261       6,524       92.640       12/12/2021
   0       7,959       131.940       12/11/2022

2017.



	Options/SAR Awards(1)				Stock Awards
Name	Number of Securities Underlying Unexercised Options/ SARs (#) Exercisable(1)	Number of Securities Underlying Unexercised Options/ SARs (#) Unexercisable(1)	Option/ SAR Exercise Price ($/Sh)(2)	Option/ SAR Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)(3)	Market Value of Shares or Units of Stock That Have Not Vested ($)(4)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(5)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4)
Todd M. Bluedorn	28,007	0	51.395	12/7/2019	27,611	5,750,267	79,105	16,474,407
	45,093	0	81.140	12/13/2020
	43,053	0	92.640	12/12/2021
	24,406	12,204	131.940	12/11/2022
	13,883	27,766	156.940	12/9/2023
	0	31,299	205.530	12/8/2024
Joseph W. Reitmeier	3,371	0	34.060	12/8/2018	5,857	1,219,779	16,809	3,500,642
	9,621	0	51.110	12/6/2019
	9,549	0	81.105	12/12/2020
	9,785	0	92.640	12/12/2021
	5,306	2,653	131.940	12/11/2022
	2,892	5,785	156.940	12/9/2023
	0	6,573	205.530	12/8/2024
Douglas L. Young	15,120	0	51.110	12/6/2019	7,012	1,460,319	20,144	4,195,189
	11,671	0	81.105	12/12/2020
	11,252	0	92.640	12/12/2021
	6,366	3,184	131.940	12/11/2022
	3,470	6,942	156.940	12/9/2023
	0	7,825	205.530	12/8/2024
Daniel M. Sessa	9,545	0	51.110	12/6/2019	5,857	1,219,779	16,809	3,500,642
	10,610	0	81.105	12/12/2020
	9,785	0	92.640	12/12/2021
	5,306	2,653	131.940	12/11/2022
	2,892	5,785	156.940	12/9/2023
	0	6,573	205.530	12/8/2024
John D. Torres	3,262	0	92.640	12/12/2021	5,857	1,219,779	16,809	3,500,642
	2,653	2,653	131.940	12/11/2022
	2,892	5,785	156.940	12/9/2023
	0	6,573	205.530	12/8/2024
David W. Moon	19,101	0	34.060	12/8/2018	4,651	968,617	15,502	3,228,447
	15,120	0	51.110	12/6/2019
	11,671	0	81.105	12/12/2020
	10,763	0	92.640	12/12/2021
	5,836	2,918	131.940	12/11/2022
	3,181	6,363	156.940	12/9/2023


(1)	Outstanding SARs vest in one-third increments on each anniversary of the date of grant, with the first anniversary date occurring one year after the date of grant.


(2)	Pursuant to the LII 2010 Incentive Plan, the exercise price for all outstanding SARs is based on the grant date fair market value, which is the average of the high and low NYSE trading prices of our common stock on the date of grant.

(3) The amounts shown represent all outstanding RSUs held by the NEOs. Refer to column (a) of Table 1 below for the vesting dates of such awards.


(4)	The amounts shown are based on the NYSE closing price of our common stock on December ~~31, 2015, which price was $124.90.~~29, 2017 ($208.26).


(5)	The amounts shown represent outstanding PSUs held by the NEOs. Refer to column (b) of Table 1 below for the vesting dates of such awards and the performance assumptions used to calculate the number of unvested PSUs.

Table 1

   (a)
Shares or Units of Stock
That Have Not Vested    (b)
Equity Incentive Plan Awards: Unearned
Shares, Units or Other Rights That Have Not Vested
Name
   Number of
Awards    Vesting Date    Number of
Awards    Vesting
Date
Performance
Assumption
Todd M. Bluedorn
   15,798       12/13/16    52,660       12/31/16    Maximum
   14,321       12/12/17    47,736       12/31/17    Maximum
   10,175       12/11/18    16,958       12/31/18    Target





    Total
   40,294          117,354
Joseph W. Reitmeier
   3,345       12/12/16    11,152       12/31/16    Maximum
   3,255       12/12/17    10,850       12/31/17    Maximum
   2,212       12/11/18    3,687       12/31/18    Target





    Total
   8,812          25,689
Douglas L. Young
   4,089       12/12/16    13,630       12/31/16    Maximum
   3,743       12/12/17    12,476       12/31/17    Maximum
   2,654       12/11/18    4,424       12/31/18    Target





    Total
   10,486          30,530
David W. Moon
   4,089       12/12/16    13,630       12/31/16    Maximum
   3,580       12/12/17    11,934       12/31/17    Maximum
   2,433       12/11/18    4,055       12/31/18    Target





    Total
   10,102          29,619
Daniel M. Sessa
   3,717       12/12/16    12,390       12/31/16    Maximum
   3,255       12/12/17    10,850       12/31/17    Maximum
   2,212       12/11/18    3,687       12/31/18    Target





    Total
   9,184          26,927

~~Fiscal 2015~~

(a)

Shares or Units of Stock

That Have Not Vested

(b)

Equity Incentive Plan Awards: Unearned

Shares, Units or Other Rights That Have Not Vested

Name

Number of

Awards

Vesting Date

Number of

Awards

Vesting

Date

Performance

Assumption

Todd M. Bluedorn

10,175

12/11/2018

33,916

12/31/2018

Maximum

9,678

12/9/2019

32,260

12/31/2019

Maximum

7,758

12/8/2020

12,929

12/31/2020

Target

Total

27,611

79,105

Joseph W. Reitmeier

2,212

12/11/2018

7,374

12/31/2018

Maximum

2,016

12/9/2019

6,720

12/31/2019

Maximum

1,629

12/8/2020

2,715

12/31/2020

Target

Total

5,857

16,809

Douglas L. Young

2,654

12/11/2018

8,848

12/31/2018

Maximum

2,419

12/9/2019

8,064

12/31/2019

Maximum

1,939

12/8/2020

3,232

12/31/2020

Target

Total

7,012

20,144

Daniel M. Sessa

2,212

12/11/2018

7,374

12/31/2018

Maximum

2,016

12/9/2019

6,720

12/31/2019

Maximum

1,629

12/8/2020

2,715

12/31/2020

Target

Total

5,857

16,809

John D. Torres

2,212

12/11/2018

7,374

12/31/2018

Maximum

2,016

12/9/2019

6,720

12/31/2019

Maximum

1,629

12/8/2020

2,715

12/31/2020

Target

Total

5,857

16,809

David W. Moon

2,433

12/11/2018

8,110

12/31/2018

Maximum

2,218

12/9/2019

7,392

12/31/2019

Maximum

Total

4,651

15,502

2017 Option/SAR Exercises and Stock Vested

The following table provides information regarding the exercise of SARs by our NEOs and each distribution of RSUs and PSUs held by our NEOs in ~~2015.~~

Options/SAR Awards Stock Awards
Name
Number of SARs
Exercised
(#) Value Realized on
Exercise
($) Number of
Shares
Acquired on
Vesting (#) Value Realized on
Vesting
($)(1)
Todd M. Bluedorn
30,548    2,430,552    RSU 23,997    3,264,552
PSU 79,990    10,574,678
Joseph W. Reitmeier
2,651    200,946    RSU 4,122    555,934
PSU 13,740    1,816,428
Douglas L. Young
18,180    1,371,839    RSU 6,477    873,553
PSU 21,592    2,854,462
David W. Moon
25,994    2,649,308    RSU 6,477    873,553
PSU 21,592    2,854,462
Daniel M. Sessa
10,785    706,012    RSU 5,888    794,115
PSU 19,628    2,594,822

2017.



	Options/SAR Awards		Stock Awards
Name	Number of SARs Exercised (#)	Value Realized on Exercise ($)	Number of Shares Acquired on Vesting (#)		Value Realized on Vesting ($)(1)
Todd M. Bluedorn	28,007	3,365,741	RSU	14,321	2,958,575
			PSU	41,316	8,742,879
Joseph W. Reitmeier	2,096	307,986	RSU	3,255	672,450
			PSU	9,391	1,987,230
Douglas L. Young	—	—	RSU	3,743	773,266
			PSU	10,798	2,284,965
Daniel M. Sessa	—	—	RSU	3,255	672,450
			PSU	9,391	1,987,230
John D. Torres	12,713	849,330	RSU	3,255	672,450
			PSU	9,391	1,987,230
David W. Moon	12,252	1,958,850	RSU	3,580	739,592
			PSU	10,329	2,185,720


(1)	The dollar amounts shown for RSUs and PSUs are based on the average of the high and low NYSE trading prices of our common stock on the day of distribution.

Retirement Plans

Qualified Retirement Plans

Frozen Consolidated Pension and Profit Sharing Retirement Plans

Effective January 1, 2009, the Company’s Consolidated Pension Plan and Profit Sharing Retirement Plan were frozen. As of that date, benefits under the frozen Pension Plan stopped increasing with additional service and compensation, and additional contributions to the Profit Sharing Plan were discontinued.

The monthly target benefit under the frozen Pension Plan is based on 1.0% of final average annual pay, plus 0.6% of final average annual pay above Social Security covered compensation, multiplied by the number of years of credited service (not to exceed 30 years). The target benefit is reduced by the value of the participant’s defined contribution profit sharing account under the frozen Profit Sharing Plan, with the difference, if any, provided by the frozen Pension Plan. Participants become vested in their frozen Pension Plan accrued benefits after five years of service and may commence unreduced benefits at age 65 (normal retirement age) or actuarially reduced benefits at younger ages if age and service requirements are met (generally the attainment of age 62 and 10 years of service or if age plus years of service total 80). Benefits are generally paid in the form of an annuity. We do not grant extra years of service under the Consolidated Pension Plan. Participants in the frozen Profit Sharing Plan are fully vested in the plan after six years of service and the Company directs the investment funds. Distributions may occur at separation from service and are eligible for roll-over into another qualified retirement plan.

401(k) Salaried Retirement Plan

Salaried employees are eligible to participate in this plan, and contributions can be made on a pre-tax or Roth post-tax basis, subject to limitations for qualified plans under the Code. Participants can contribute up to

75% of their eligible earnings and receive a Company match of 50% on up to 6% of their eligible pay. In addition, all participants (after completing one year of service) receive a base contribution equal to 3% of eligible pay. The match vests after the participant completes two years of service and the base contribution is fully vested.

Non-Qualified Retirement Plans

Supplemental Retirement Plan

The purpose of our Supplemental Retirement Plan is to provide Market-competitive executive level retirement benefit opportunities. It permits income above Code limitations to be considered in determining final average annual pay, doubles the rate of benefit accrual available under the frozen Pension Plan (2.0% of final average annual pay, plus 1.2% of final average annual pay above Social Security covered compensation), limits credited service to 15 years, generally permits early retirement on more favorable terms than the frozen Pension Plan (for example, unreduced benefits at age 62 with 10 years of service or unreduced benefits at age 60 if age plus years of service total 80), and pays benefits in the form of a lump-sum. Any benefits provided under the Supplemental Retirement Plan are reduced by the benefits payable under our Company’s frozen Pension Plan (as if such plan had not been frozen), frozen Profit Sharing Plan, and frozen Profit Sharing Restoration Plan. Participants become vested in their Supplemental Retirement Plan benefit after five years of service. Extra years of credited service are not provided to participants except for up to an additional three years of service and age (subject to the 15 year service limit) in the case of a change in control. The incremental effects of additional years of service are reflected in the tables included in “Potential Payments Upon Termination or Change in Control.”

Frozen Profit Sharing Restoration Plan

We froze the Profit Sharing Restoration Plan and discontinued contributions effective January 1, 2009. Distributions may occur at separation from service and may be paid as a lump-sum or in equal annual installments over either a five- or ten-year period. We direct the investment funds for the frozen Profit Sharing Restoration Plan, which mirror the investments and returns under the frozen Profit Sharing Retirement Plan. The weighted average annual rate of return for the calendar year ended December 31, ~~2015,~~2017, was ~~0.0%~~14.8%.

~~Fiscal 2015~~

2017 Pension Benefits

The following table provides information regarding the number of years of service credited to each NEO and the present value of accumulated benefits payable to each NEO under our frozen Consolidated Pension Plan and our Supplemental Retirement Plan as of December 31, ~~2015,~~2017, as well as payments made to each NEO in ~~2015~~2017 under such plans.

Name

Plan Name
Number of
Years
Credited
Service
(#) Present
Value of
Accumulated
Benefit
($)(1) Payments
During
Last
Fiscal Year
($)
Todd M. Bluedorn
Consolidated Pension Plan (Frozen) 1.9    40,118    0
Supplemental Retirement Plan 8.9    7,024,986    0
Joseph W. Reitmeier
Consolidated Pension Plan (Frozen) 3.3    53,180    0
Supplemental Retirement Plan 3.6    531,756    0
Douglas L. Young
Consolidated Pension Plan (Frozen) 9.6    83,069    0
Supplemental Retirement Plan 15.0    4,111,489    0
David W. Moon
Consolidated Pension Plan (Frozen) 11.0    81,405    0
Supplemental Retirement Plan 9.5    1,779,359    0
Daniel M. Sessa
Consolidated Pension Plan (Frozen) 1.7    32,954    0
Supplemental Retirement Plan 8.7    1,922,780    0



Name	Plan Name	Number of Years Credited Service (#)	Present Value of Accumulated Benefit ($)(1)	Payments During Last Year ($)
Todd M. Bluedorn	Consolidated Pension Plan (Frozen)	1.9	50,103	0
	Supplemental Retirement Plan	10.9	12,179,467	0
Joseph W. Reitmeier	Consolidated Pension Plan (Frozen)	3.3	65,671	0
	Supplemental Retirement Plan	5.6	1,290,006	0
Douglas L. Young	Consolidated Pension Plan (Frozen)	9.6	83,182	0
	Supplemental Retirement Plan	15.0	5,729,564	0
Daniel M. Sessa	Consolidated Pension Plan (Frozen)	1.7	41,609	0
	Supplemental Retirement Plan	10.7	3,299,900	0
John Torres(2)	Consolidated Pension Plan (Frozen)	N/A	N/A	0
	Supplemental Retirement Plan	9.0	3,098,858	0
David W. Moon	Consolidated Pension Plan (Frozen)	11.0	74,817	0
	Supplemental Retirement Plan	11.5	2,503,639	0

(1)

The actuarial present value of the lump-sum accumulated benefit payable at December 31, ~~2015~~2017 is equal to the annualized present value factor, multiplied by the monthly benefit. The amounts shown are calculated in accordance with FASB ASC Topic 715, using a ~~3.91%~~3.23% interest (discount) rate for the Supplemental Retirement Plan and ~~4.57%~~3.70% for the Consolidated Pension Plan as of December 31, ~~2015~~2017 and the RP-2014 ~~healthy retiree mortality rates, generationally projected with Scale MP-2015.~~Healthy Retiree

Mortality Table, adjusted to 2006, and projected generationally with Scale MP-2017. The calculations assume payments are deferred until age 65 for all participants under our frozen Consolidated Pension Plan and until the earliest unreduced retirement age for each participant under our Supplemental Retirement Plan. Additional assumptions are included in Note 12 of the Consolidated Financial Statements for the fiscal year ended December 31, 2017, included in our Form 10-K filed with the SEC on February 16, 2018.

(2)

Mr. Torres was not eligible to participate in the Consolidated Pension Plan ~~and until~~prior to the earliest unreduced retirement age for each participant under our Supplemental Retirement Plan. Additional assumptions are included in Note 12 of the Consolidated Financial Statements for the year ended December 31, 2015, included in our Form 10-K filed with the SEC on February 16, 2016.plan being frozen.

~~Fiscal 2015~~

2017 Nonqualified Deferred Compensation

The following table provides information regarding contributions, earnings, withdrawals and distributions under our frozen Profit Sharing Restoration Plan in ~~2015~~2017 for each NEO, as well as each NEO’s aggregate balance in such plan at December 31, ~~2015.~~

Name
Executive
Contributions in
Last Fiscal Year
($) Company
Contributions in
Last Fiscal Year
($) Aggregate Earnings in
Last Fiscal Year
($) Aggregate
Withdrawals/
Distributions
($) Aggregate
Balance
at Last
Fiscal
Year-End
($)
Todd M. Bluedorn
0 0 0    0 67,255
Joseph W. Reitmeier(1)
N/A N/A N/A    N/A N/A
Douglas L. Young
0 0 0    0 343,039
David W. Moon
0 0 0    0 87,946
Daniel M. Sessa
0 0 0    0 16,040

2017.



Name	Executive Contributions in Last Year ($)	Company Contributions in Last Year ($)	Aggregate Earnings in Last Year ($)	Aggregate Withdrawals/ Distributions ($)	Aggregate Balance at Last Year-End ($)
Todd M. Bluedorn	0	0	10,600	0	82,401
Joseph W. Reitmeier(1)	N/A	N/A	N/A	N/A	N/A
Douglas L. Young	0	0	54,065	0	420,296
Daniel M. Sessa	0	0	2,528	0	19,652
John Torres(1)	N/A	N/A	N/A	N/A	N/A
David W. Moon	0	0	13,861	0	107,753


(1)	Mr. Reitmeier ~~was~~and Mr. Torres were not eligible to participate in this plan prior to the plan being frozen.

Potential Payments Upon Termination or Change in Control

Employment Agreements and Change in Control Agreements

We are party to employment agreements and CIC agreements with each NEO. These agreements serve as the basis for the payments and benefits to which each NEO would be entitled in the event of termination of such individual’s employment with our Company under the various circumstances described below.

Employment Agreements

The employment agreements with our NEOs establish the basis of compensation and responsibilities for each NEO and contain post-employment covenants, including confidentiality, prohibition against the diversion of employees, vendors and contractors and prohibition against the solicitation of customers, for a period of 24 months following termination of employment. On January 1 of each year, the agreements automatically renew for an additional year, unless either party notifies the other in writing at least 30 days prior to such date of its decision not to renew the agreement. Except as otherwise provided below, the terms and conditions of our employment agreement with each NEO are substantially similar.

Change in Control Agreements

Our CIC agreements with our NEOs, the terms and conditions of which are substantially similar except as noted below, provide for benefits under specified circumstances if a NEO’s employment is terminated in connection with a CIC transaction. The agreements require the NEO to maintain the confidentiality of our information and not to induce our employees to terminate their employment with our Company, for a period of 24 months following termination of employment.

All CIC agreements entered into after 2009 do not include a ~~280G Tax Gross-Up~~tax gross-up provision.

Payments Made Upon Voluntary Termination or Upon For Cause Termination

If a NEO voluntarily terminates his employment with our Company or we terminate a NEO for cause, he will be entitled to receive base salary through the last day of employment and a lump-sum payment equal to unused, accrued vacation days. Unvested SARs, RSUs and PSUs will terminate on the NEO’s last day of employment. Vested SARs will be exercisable for 90 days after the last day of employment if the NEO voluntarily terminates his employment.

Payments Made Upon Retirement

If a NEO retires, he will be entitled to receive his base salary through the last day of employment, a payment under our short-term incentive program based on actual company performance (prorated through the NEO’s last day of employment) and a lump-sum payment equal to unused, accrued vacation days. In addition, with respect to long-term incentive awards:

unvested SARs will terminate on the NEO’s last day of employment and vested SARs will remain exercisable for the remainder of the term of the award;

for RSUs, the NEO will receive a prorated portion of shares based on the date of retirement at the end of the applicable vesting period; and

for PSUs, the NEO will receive, to the extent earned based on achievement of specific performance measures, a prorated portion of shares based on the date of retirement at the end of the applicable performance period.

Payments Made Upon Involuntary — Not for Cause Termination

If we terminate a NEO prior to the expiration of his employment agreement (including non-renewal of the NEO’s agreement) for any reason other than for cause, the NEO will generally be entitled to receive “normal severance compensation” or, in the NEO’s sole discretion, “enhanced severance benefits.” Under both severance packages:

all vested SARs will continue to be exercisable for 90 days following the NEO’s last day of employment; and

unvested equity awards (SARs, RSUs and PSUs) will terminate on the NEO’s last day of employment.

Normal Severance Compensation. If the NEO elects to receive “normal severance compensation,” he will receive monthly payments equal to the greater of (1) his monthly base salary for the remainder of the employment agreement’s term, or (2) three months of his monthly base salary in addition to any other compensation or benefits applicable to an employee at the NEO’s level, including a lump-sum payment equal to unused, accrued vacation days.

Enhanced Severance Benefits. If the NEO agrees to execute a written general release of any and all possible claims against us existing at the time of termination, we will provide the employee with “enhanced severance benefits.” Payments provided under this severance arrangement, which are dependent on years of service with our Company, generally include the following:



~~Component~~
Component	Less than Three Years of Service	Three or More Years of Service
Base Salary	One year of base salary	Two years of base salary
Short-Term Incentive	Lump-sum payment equal to all payments under our short-term incentive programs received by the NEO in the previous 12 months	Lump-sum payment equal to all payments under our short-term incentive programs received by the NEO in the previous 24 months
Payment in Lieu of Outplacement Services	Lump-sum payment equal to 10% of base salary	Same
Payment in Lieu of Perquisites	Lump-sum payment equal to 10% of base salary	Same
Post-Employment Health Care Coverage	Payment of COBRA premiums for up to 18 months while the NEO is unemployed and not eligible for other group health coverage and payment of the equivalent of such premium for up to an additional six months, should the NEO remain unemployed	Same
Death Benefit	If the NEO dies during the enhanced severance period, a lump-sum death benefit equal to six months of the NEO’s base salary will be paid to the NEO’s beneficiary	Same
Accrued Vacation	A lump-sum payment equal to unused, accrued vacation days	Same

Payments Made Upon Death or Disability

Generally, if a NEO dies during the term of his employment agreement, the NEO’s beneficiary will be entitled to receive “normal severance compensation,” as described above. If a NEO becomes permanently disabled during the agreement term, he will generally be entitled to, at the NEO’s option, either “normal severance compensation” or “enhanced severance benefits,” as described above. In the case of either death or disability, with respect to long-term incentive awards:

all SARs will vest immediately and remain exercisable for the duration of the term;

for RSUs, the NEO, or his beneficiary, will receive a prorated payment based upon the portion of the vesting period the NEO actually served as an employee payable at the time employment ceases; and

for PSUs, the NEO, or his beneficiary, will receive, to the extent earned based on achievement of performance measures, a prorated portion of shares based upon the portion of the performance period the NEO actually served as our employee, payable at the time employment ceases.

Payments Made to Mr. Bluedorn if he Terminates his Employment for “Good Reason,” Upon Involuntary — Not for Cause Termination, or Upon Death or Disability

Except as described below, Mr. Bluedorn will receive similar severance benefits as the other NEOs. Mr. Bluedorn’s employment agreement provides for certain severance benefits in the event he terminates his employment for “good reason.” “Good reason” includes:

any change in Mr. Bluedorn’s position, authority, duties, or responsibilities inconsistent with the position of CEO (excluding de minimus changes and an isolated, insubstantial and inadvertent action not taken in bad faith and promptly remedied by the Company after notice);

any failure by the Company to comply with any of the provisions of Mr. Bluedorn’s employment agreement (excluding an isolated, insubstantial and inadvertent action not taken in bad faith and promptly remedied by the Company after notice);

any requirement for him to be based at any office or location other than our current headquarters in Richardson, Texas;

any purported termination by the Company of Mr. Bluedorn’s employment otherwise than as expressly permitted by his employment agreement; or

any failure by our Board to nominate him for election by the stockholders as a director.

Pursuant to his employment agreement, in the event (1) Mr. Bluedorn terminates his employment for “good reason,” (2) we terminate him prior to the expiration of his employment agreement (including non-renewal of his agreement) for any reason other than for cause, or (3) Mr. Bluedorn dies or becomes permanently disabled during the term of his employment agreement, he (or his beneficiary, as applicable) will be entitled to receive “enhanced severance benefits” as described above under “Payments Made Upon Involuntary — Not For Cause Termination,” provided he (or his personal representative, as applicable) agrees to execute a written general release of any and all possible claims against us existing at the time of termination.

In the case of either death or permanent disability, Mr. Bluedorn’s long-term incentive awards will vest, remain exercisable and be paid or distributed as described above under “Payments Made Upon Death or Disability.”

Payments Made Upon a Change in Control

Definition of Change in Control

A CIC generally includes the occurrence of any of the following events:

an acquisition by a third party of 35% or more of our voting stock;

a change in a majority of Board members without majority Board approval;

stockholder approval of a merger, consolidation or reorganization;

stockholder approval of the liquidation or dissolution of our Company; or

stockholder approval of the sale of substantially all corporate assets.

Definition of Good Reason

“Good reason,” under each CIC agreement, includes:

any change in the NEO’s position, authority, duties, or responsibilities (excluding de minimus changes);

any failure to comply with the NEO’s CIC agreement, including without limitation the provision regarding compensation and benefits;

a required relocation to any office or location not within 35 miles of the NEO’s current office or location;

any failure by any successor to adopt and comply with the NEO’s CIC agreement; or

any failure to re-elect to the Board any NEO serving as a member of the Board.

Change in Control Benefits

If a NEO’s employment is terminated without cause or by the NEO for “good reason” either ~~(i)~~(1) within two years following a CIC, or ~~(ii)~~(2) within six months prior to a CIC, we will provide the NEO with the following CIC benefits:



~~Component~~		~~CIC Benefit~~
Component		CIC Benefit
Base Salary Severance		Lump-sum payment equal to three times the NEO’s annual base salary
Prorated Bonus		Lump-sum payment equal to the NEO’s target bonus, prorated based on the last day of employment
Bonus Severance		Lump-sum payment equal to three times the NEO’s target bonus
Payment in Lieu of Outplacement Services		Lump-sum payment equal to 15% of current base salary
Payment in Lieu of Perquisites		Lump-sum payment equal to 45% of current base salary
Post-Employment Health Care Coverage		Payment of COBRA premiums for up to 36 months while the NEO is unemployed and not eligible for other group health coverage
Supplemental Retirement Plan and Profit Sharing Restoration Plan		Three years added to each of the service and age criteria
~~280G~~ Tax Gross-up(*)		If CIC payments are subject to the excise tax imposed by Section 4999 of the Code, an additional “gross-up payment”
Accrued Vacation		A lump-sum payment equal to unused, accrued vacation days



(*)	The CIC agreement with Mr. Reitmeier does not include a ~~280G Tax Gross Up~~tax gross up provision.

Upon a CIC, all outstanding SARs, RSUs and PSUs held by the NEO will immediately vest and become exercisable, with applicable performance measures for outstanding PSUs deemed to have been satisfied at the highest possible level (200% of target). Further, outstanding SARs may be exercised by the NEO up to 90 days after a NEO’s termination within one year following a CIC.

Tables Illustrating Potential Payments Upon Termination or Change in Control

The following tables provide information regarding the benefits to which each NEO would be entitled in the event of termination of such individual’s employment with our Company under specified circumstances, including a CIC. Except as otherwise noted, the amounts shown (1) are estimates only and (2) assume that ~~(A)~~(a) termination was effective as of December 31, ~~2015, (B)~~2017, (b) in the case of disability, the NEO elects to receive “enhanced severance benefits,” ~~(C)~~(c) in the case of retirement, the NEO is eligible for retirement and ~~(D)~~ (d)��in the case of ~~change in control,~~CIC, the NEO terminates for “good reason” or is involuntarily terminated without cause.

Todd M. Bluedorn

Involuntary-Not For
Cause Termination
Component
Voluntary
Termination Retirement Normal
Severance Enhanced
Severance(1) Death Disability For Cause
Termination Change in
Control
Base Salary
$ 0    $ 0    $ 265,000    �� $ 2,120,000    $ 2,120,000    $ 2,120,000    $ 0    $ 3,180,000
Prorated Bonus
n/a    n/a    n/a    n/a    n/a    n/a    n/a    1,325,000
Bonus
0    0    0    3,526,935    3,526,935    3,526,935    0    3,975,000
Payment in Lieu of Outplacement Services
0    0    0    106,000    106,000    106,000    0    159,000
Payment in Lieu of Perquisites
0    0    0    106,000    106,000    106,000    0    477,000
Post-Employment Health Care Coverage
0    0    0    34,611    22,004    34,611    0    66,203
Long-Term Equity Accelerated Vesting(2)
0    8,504,011    0    0    10,087,694    10,087,694    0    23,134,239
Incremental Payment Under Supplemental Retirement Plan & Frozen Profit Sharing Restoration Plan
0    0    0    0    0    0    0    4,274,013
280G Tax Gross-up
0    0    0    0    0    0    0    11,808,313
Unused, Accrued Vacation(3)
101,923    101,923    101,923    101,923    101,923    101,923    101,923    101,923

TOTAL
$ 101,923    $ 8,605,934    $ 366,923    $ 5,995,469    $ 16,070,556    $ 16,083,163    $ 101,923    $ 48,500,691



					Involuntary-Not For Cause Termination
Component	Voluntary Termination		Retirement		Normal Severance		Enhanced Severance(1)		Death		Disability		For Cause Termination		Change in Control
Base Salary	$	0	$	0	$	281,250	$	2,250,000	$	2,250,000	$	2,250,000	$	0	$	3,375,000
Prorated Bonus	n/a		n/a		n/a		n/a		n/a		n/a		n/a		1,406,250
Bonus	0		0		0		3,823,562		3,823,562		3,823,562		0		4,218,750
Payment in Lieu of Outplacement Services	0		0		0		112,500		112,500		112,500		0		168,750
Payment in Lieu of Perquisites	0		0		0		112,500		112,500		112,500		0		506,250
Post-Employment Health Care Coverage	0		0		0		37,542		24,340		37,542		0		63,747
Long-Term Equity Accelerated Vesting(2)	0		7,013,062		0		0		9,454,869		9,454,869		0		27,359,075
Incremental Payment Under Supplemental Retirement Plan & Frozen Profit Sharing Restoration Plan	0		0		0		0		0		0		0		6,207,364
280G Tax Gross-up	0		0		0		0		0		0		0		0
Unused, Accrued Vacation(3)	108,173		108,173		108,173		108,173		108,173		108,173		108,173		108,173
TOTAL	$	108,173	$	7,121,235	$	389,423	$	6,444,277	$	15,885,944	$	15,899,146	$	108,173	$	43,413,359


(1)	The amounts shown reflect the same severance benefits that would be provided to Mr. Bluedorn if he terminated employment with our Company for “good reason” under his employment agreement as discussed above.


(2)	The amounts shown reflect pro-rata vesting of unvested long-term incentive awards. Such amounts are based on the NYSE closing price of our common stock on December ~~31, 2015,~~29, 2017, which was ~~$124.90.~~$208.26.


(3)	The amounts shown represent a lump-sum payment for five weeks of vacation in ~~2015~~2017 (assuming the NEO did not take any vacation days in ~~2015)~~2017). Actual payouts may vary depending on the specific circumstances.

Joseph W. Reitmeier

Involuntary-Not For
Cause Termination
Component
Voluntary
Termination Retirement Normal
Severance Enhanced
Severance Death Disability For Cause
Termination Change in
Control
Base Salary
$ 0    $ 0    $ 112,500    $ 900,000    $ 112,500    $ 900,000    $ 0    $ 1,350,000
Prorated Bonus
n/a    n/a    n/a    n/a    n/a    n/a    n/a    315,000
Bonus
0    0    0    773,657    0    773,657    0    945,000
Payment in Lieu of Outplacement Services
0    0    0    45,000    0    45,000    0    67,500
Payment in Lieu of Perquisites
0    0    0    45,000    0    45,000    0    202,500
Post-Employment Health Care Coverage
0    0    0    35,290    0    0    0    59,077
Long-Term Equity Accelerated Vesting(1)
0    1,843,531    0    0    2,193,394    2,193,394    0    5,063,513
Incremental Payment Under Supplemental Retirement Plan and Frozen Profit Sharing Restoration Plan
0    0    0    0    0    0    0    0
280G Tax Gross-up
0    0    0    0    0    0    0    n/a
Unused, Accrued Vacation(2)
43,269    43,269    43,269    43,269    43,269    43,269    43,269    43,269

TOTAL
$ 43,269    $ 1,886,800    $ 155,769    $ 1,842,216    $ 2,349,163    $ 4,000,320    $ 43,269    $ 8,045,859



					Involuntary-Not For Cause Termination
Component	Voluntary Termination		Retirement		Normal Severance		Enhanced Severance		Death		Disability		For Cause Termination		Change in Control
Base Salary	$	0	$	0	$	125,000	$	1,000,000	$	125,000	$	1,000,000	$	0	$	1,500,000
Prorated Bonus	n/a		n/a		n/a		n/a		n/a		n/a		n/a		350,000
Bonus	0		0		0		900,863		0		900,863		0		1,050,000
Payment in Lieu of Outplacement Services	0		0		0		50,000		0		50,000		0		75,000
Payment in Lieu of Perquisites	0		0		0		50,000		0		50,000		0		225,000
Post-Employment Health Care Coverage	0		0		0		38,221		0		0		0		61,284
Long-Term Equity Accelerated Vesting(1)	0		1,495,822		0		0		2,013,130		2,013,130		0		5,803,154
Incremental Payment Under Supplemental Retirement Plan and Frozen Profit Sharing Restoration Plan	0		0		0		0		0		0		0		1,171,462
280G Tax Gross-up	0		0		0		0		0		0		0		n/a
Unused, Accrued Vacation(2)	48,077		48,077		48,077		48,077		48,077		48,077		48,077		48,077
TOTAL	$	48,077	$	1,543,899	$	173,077	$	2,087,161	$	2,186,207	$	4,062,070	$	48,077	$	10,283,977


(1)	The amounts shown reflect pro-rata vesting of unvested long-term incentive awards. Such amounts are based on the NYSE closing price of our common stock on December ~~31, 2015,~~29, 2017, which was ~~$124.90.~~$208.26.


(2)	The amounts shown represent a lump-sum payment for five weeks of vacation in ~~2015~~2017 (assuming the NEO did not take any vacation days in ~~2015)~~2017). Actual payouts may vary depending on the specific circumstances.

Douglas L. Young

Involuntary-Not For
Cause Termination
Component
Voluntary
Termination Retirement Normal
Severance Enhanced
Severance Death Disability For Cause
Termination Change in
Control
Base Salary
$ 0    $ 0    $ 130,000    $ 1,040,000    $ 130,000    $ 1,040,000    $ 0    $ 1,560,000
Prorated Bonus
n/a    n/a    n/a    n/a    n/a    n/a    n/a    364,000
Bonus
0    0    0    1,149,053    0    1,149,053    0    1,092,000
Payment in Lieu of Outplacement Services
0    0    0    52,000    0    52,000    0    78,000
Payment in Lieu of Perquisites
0    0    0    52,000    0    52,000    0    234,000
Post-Employment Health Care Coverage
0    0    0    22,456    0    0    0    39,129
Long-Term Equity Accelerated Vesting(1)
0    2,208,892    0    0    2,621,313    2,621,313    0    6,020,645
Incremental Payment Under Supplemental Retirement Plan and Frozen Profit Sharing Restoration Plan
0    0    0    0    0    0    0    238,380
280G Tax Gross-up
0    0    0    0    0    0    0    3,078,055
Unused, Accrued Vacation(2)
50,000    50,000    50,000    50,000    50,000    50,000    50,000    50,000

TOTAL
$ 50,000    $ 2,258,892    $ 180,000    $ 2,365,509    $ 2,801,313    $ 4,964,366    $ 50,000    $ 12,754,209



					Involuntary-Not For Cause Termination
Component	Voluntary Termination		Retirement		Normal Severance		Enhanced Severance		Death		Disability		For Cause Termination		Change in Control
Base Salary	$	0	$	0	$	140,000	$	1,120,000	$	140,000	$	1,120,000	$	0	$	1,680,000
Prorated Bonus	n/a		n/a		n/a		n/a		n/a		n/a		n/a		392,000
Bonus	0		0		0		1,023,668		0		1,023,668		0		1,176,000
Payment in Lieu of Outplacement Services	0		0		0		56,000		0		56,000		0		84,000
Payment in Lieu of Perquisites	0		0		0		56,000		0		56,000		0		252,000
Post-Employment Health Care Coverage	0		0		0		38,221		0		0		0		61,307
Long-Term Equity Accelerated Vesting(1)	0		1,794,527		0		0		2,415,155		2,415,155		0		6,949,234
Incremental Payment Under Supplemental Retirement Plan and Frozen Profit Sharing Restoration Plan	0		0		0		0		0		0		0		1,432,064
280G Tax Gross-up	0		0		0		0		0		0		0		0
Unused, Accrued Vacation(2)	53,846		53,846		53,846		53,846		53,846		53,846		53,846		53,846
TOTAL	$	53,846	$	1,848,373	$	193,846	$	2,347,735	$	2,609,001	$	4,724,669	$	53,846	$	12,080,451


(1)	The amounts shown reflect pro-rata vesting of unvested long-term incentive awards. Such amounts are based on the NYSE closing price of our common stock on December ~~31, 2015,~~29, 2017, which was ~~$124.90.~~$208.26.


(2)	The amounts shown represent a lump-sum payment for five weeks of vacation in ~~2015~~2017 (assuming the NEO did not take any vacation days in ~~2015)~~2017). Actual payouts may vary depending on the specific circumstances.

~~David W. Moon~~

Involuntary-Not For
Cause Termination
Component
Voluntary
Termination Retirement Normal
Severance Enhanced
Severance Death Disability For Cause
Termination Change in
Control
Base Salary
$ 0    $ 0    $ 121,250    $ 970,000    $ 121,250    $ 970,000    $ 0    $ 1,455,000
Prorated Bonus
n/a    n/a    n/a    n/a    n/a    n/a    n/a    339,500
Bonus
0    0    0    493,471    0    493,471    0    1,018,500
Payment in Lieu of Outplacement Services
0    0    0    48,500    0    48,500    0    72,750
Payment in Lieu of Perquisites
0    0    0    48,500    0    48,500    0    218,250
Post-Employment Health Care Coverage
0    0    0    37,862    0    0    0    140,584
Long-Term Equity Accelerated Vesting(1)
0    2,177,133    0    0    2,579,037    2,579,037    0    5,807,899
Incremental Payment Under Supplemental Retirement Plan and Frozen Profit Sharing Restoration Plan
0    0    0    0    0    0    0    973,636
280G Tax Gross-up
0    0    0    0    0    0    0    3,439,774
Unused, Accrued Vacation(2)
46,635    46,635    46,635    46,635    46,635    46,635    46,635    46,635

TOTAL
$ 46,635    $ 2,223,768    $ 167,885    $ 1,644,968    $ 2,746,922    $ 4,186,143    $ 46,635    $ 13,512,528

Daniel M. Sessa



					Involuntary-Not For Cause Termination
Component	Voluntary Termination		Retirement		Normal Severance		Enhanced Severance		Death		Disability		For Cause Termination		Change in Control
Base Salary	$	0	$	0	$	123,750	$	990,000	$	123,750	$	990,000	$	0	$	1,485,000
Prorated Bonus	n/a		n/a		n/a		n/a		n/a		n/a		n/a		346,500
Bonus	0		0		0		939,980		0		939,980		0		1,039,500
Payment in Lieu of Outplacement Services	0		0		0		49,500		0		49,500		0		74,250
Payment in Lieu of Perquisites	0		0		0		49,500		0		49,500		0		222,750
Post-Employment Health Care Coverage	0		0		0		24,322		0		0		0		39,632
Long-Term Equity Accelerated Vesting(1)	0		1,495,822		0		0		2,013,130		2,013,130		0		5,803,154
Incremental Payment Under Supplemental Retirement Plan and Frozen Profit Sharing Restoration Plan	0		0		0		0		0		0		0		1,622,337
280G Tax Gross-up	0		0		0		0		0		0		0		0
Unused, Accrued Vacation(2)	47,596		47,596		47,596		47,596		47,596		47,596		47,596		47,596
TOTAL	$	47,596	$	1,543,418	$	171,346	$	2,100,898	$	2,184,476	$	4,089,706	$	47,596	$	10,680,719


(1)	The amounts shown reflect pro-rata vesting of unvested long-term incentive awards. Such amounts are based on the NYSE closing price of our common stock on December ~~31, 2015,~~29, 2017, which was ~~$124.90.~~$208.26.


(2)	The amounts shown represent a lump-sum payment for five weeks of vacation in ~~2015~~2017 (assuming the NEO did not take any vacation days in ~~2015)~~2017). Actual payouts may vary depending on the specific circumstances.

~~Daniel M. Sessa~~

Involuntary-Not For
Cause Termination
Component
Voluntary
Termination Retirement Normal
Severance Enhanced
Severance Death Disability For Cause
Termination Change in
Control
Base Salary
$ 0    $ 0    $ 116,250    $ 930,000    $ 116,250    $ 930,000    $ 0    $ 1,395,000
Prorated Bonus
n/a    n/a    n/a    n/a    n/a    n/a    n/a    325,500
Bonus
0    0    0    879,669    0    879,669    0    976,500
Payment in Lieu of Outplacement Services
0    0    0    46,500    0    46,500    0    69,750
Payment in Lieu of Perquisites
0    0    0    46,500    0    46,500    0    209,250
Post-Employment Health Care Coverage
0    0    0    22,456    0    0    0    39,076
Long-Term Equity Accelerated Vesting(1)
0    1,979,153    0    0    2,344,520    2,344,520    0    5,280,107
Incremental Payment Under Supplemental Retirement Plan and Frozen Profit Sharing Restoration Plan
0    0    0    0    0    0    0    1,150,849
280G Tax Gross-up
0    0    0    0    0    0    0    3,231,049
Unused, Accrued Vacation(2)
44,712    44,712    44,712    44,712    44,712    44,712    44,712    44,712

TOTAL
$ 44,712    $ 2,023,865    $ 160,962    $ 1,969,837    $ 2,505,482    $ 4,291,901    $ 44,712    $ 12,721,793

John D. Torres



					Involuntary-Not For Cause Termination
Component	Voluntary Termination		Retirement		Normal Severance		Enhanced Severance		Death		Disability		For Cause Termination		Change in Control
Base Salary	$	0	$	0	$	120,000	$	960,000	$	120,000	$	960,000	$	0	$	1,440,000
Prorated Bonus	n/a		n/a		n/a		n/a		n/a		n/a		n/a		336,000
Bonus	0		0		0		910,072		0		910,072		0		1,008,000
Payment in Lieu of Outplacement Services	0		0		0		48,000		0		48,000		0		72,000
Payment in Lieu of Perquisites	0		0		0		48,000		0		48,000		0		216,000
Post-Employment Health Care Coverage	0		0		0		27,362		0		0		0		44,383
Long-Term Equity Accelerated Vesting(1)	0		1,495,822		0		0		2,013,130		2,013,130		0		5,803,154
Incremental Payment Under Supplemental Retirement Plan and Frozen Profit Sharing Restoration Plan	0		0		0		0		0		0		0		1,879,059
280G Tax Gross-up	0		0		0		0		0		0		0		0
Unused, Accrued Vacation(2)	46,154		46,154		46,154		46,154		46,154		46,154		46,154		46,154
TOTAL	$	46,154	$	1,541,976	$	166,154	$	2,039,588	$	2,179,284	$	4,025,356	$	46,154	$	10,844,750


(1)	The amounts shown reflect pro-rata vesting of unvested long-term incentive awards. Such amounts are based on the NYSE closing price of our common stock on December ~~31, 2015,~~29, 2017, which was ~~$124.90.~~$208.26.


(2)	The amounts shown represent a lump-sum payment for five weeks of vacation in ~~2015~~2017 (assuming the NEO did not take any vacation days in ~~2015)~~2017). Actual payouts may vary depending on the specific circumstances.

David W. Moon

During 2017, Mr. Moon was removed from his position as Executive Vice President, President and Chief Operating Officer, Worldwide Refrigeration. The payments he received in connection with his Separation and General Release Agreement are included in Note 4 to the Summary Compensation Table.

CEO Pay Ratio

For 2017, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees of our company other than our CEO was approximately 181 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions summarized below.



Date Used to Identify Median Employee	October 31, 2017
Employee Pool Used to Identify Median Employee	Our employee population consisted of approximately 11,987 individuals on October 31, 2017. In determining the median employee, we excluded employees from certain non-U.S. countries under the de minimis exemption under applicable SEC regulations. The list of excluded countries, together with the number of employees excluded in each country, was as follows: Belgium (7); China (202); Netherlands (51); New Zealand (24); Poland (46); Portugal (22); Singapore (5); and the United Kingdom (6). In total we excluded 363 employees under the de minimis exemption, representing approximately 3% of our total employee population as of October 31, 2017. Our pay ratio includes 11,624 employees.
Compensation Used to Identify Median Employee	Total gross wages as derived from the company’s payroll records.
Median Employee Annual Compensation	$63,201, which includes the value of the median employee’s health and welfare benefits and retirement benefits. We calculated the median employee’s compensation in the same manner as we calculated total compensation of the CEO in the Summary Compensation Table and then added the value of health and welfare benefits.
CEO Compensation	$11,467,545, which is a $12,985 increase over the amount disclosed in the Summary Compensation Table. The increase reflects the value of health and welfare benefits which are excluded from the Summary Compensation Table under SEC rules.
Pay Ratio	181:1

DIRECTOR COMPENSATION

In 2017, our director compensation program consisted of annual retainers and long-term incentive compensation. We use a combination of cash, stock and long-term equity awards to compensate members of our Board. ~~Directors who are also employees of~~Mr. Bluedorn, our ~~Company do~~Chairman and CEO, does not receive any additional compensation for serving on our Board.

Each year, the Committee reviews benchmark data from our Compensation Peer Group and other general industry surveys to assess the competitiveness of our director compensation program. If the Committee believes changes are warranted to the Board compensation program, the Committee recommends the proposed changes to the independent members of the Board for approval.

~~2015~~

2017 Annual ~~Retainer~~

Compensation

In ~~2015,~~2017, we provided the following annual retainers, which are paid in quarterly installments, and long-term incentive awards to members of our ~~Board, paid on a quarterly basis:~~


	~~Board~~ ~~Retainer~~	~~Lead Director / Committee~~ ~~Chair Retainer~~
~~Non-Employee Directors~~	~~$95,000, with up to $75,000 payable in cash and the remainder payable in Company common stock~~	~~• Lead Director:~~	~~$25,000~~
		~~• Audit:~~	~~$20,000~~
		~~• Compensation and Human Resources:~~	~~$15,000~~
		~~• Board Governance:~~	~~$15,000~~
		~~• Public Policy:~~	~~$10,000~~

Board.



Board Retainer	Lead Director / Committee Chair Retainer			Long-Term Incentive Award
$100,000 with up to $80,000 payable in cash and the remainder payable in Company common stock	• Lead Director:	$	25,000	$115,000 RSU Award
	• Audit:	$	20,000
	• Compensation and Human Resources:	$	15,000
	• Board Governance:	$	15,000
	• Public Policy:	$	10,000

Non-Employee Directors’ Compensation and Deferral Plan

Under this plan, non-employee directors may receive all or a portion of their annual retainer for service on the Board in Company common stock.

Long-Term Incentive Compensation

Non-employee directors receive 100% of their long-term incentive in the form of RSUs under the LII 2010 Incentive Plan. In ~~2015,~~2017, we awarded each non-employee director ~~811~~595 RSUs. Generally, the RSUs vest three years following the date of grant provided that the director remains on our Board throughout the vesting period.

Retirement and Health and Welfare Plans

We provide a frozen Directors’ Retirement Plan for non-employee directors who were active Board members prior to 1998 and allow ~~such~~those directors to participate in our health care program under the same terms and provisions that we provide to our employees. The frozen Directors’ Retirement Plan provides for partial continuation of the cash component of the director’s annual retainer at the time of retirement for life. During ~~2015,~~2017 Mr. Major was the only active and continuing Board member eligible to participate in the Directors’ Retirement Plan and the only active Board member who participates in our health care program.

Perquisites and Other Compensation

We allow our non-employee directors to participate in our employee rebate program, which provides rebates on eligible residential heating and air conditioning equipment, accessories, and supplies. We ~~also reimbursed~~reimburse all non-employee directors for their reasonable expenses incurred in connection with attendance at Board or Board committee meetings. ~~We also provided some non-employee directors with communication devices in order to access Board materials.~~

Stock Ownership Guidelines

Pursuant to our Corporate Governance Guidelines, ~~all non-employee directors are subject to stock ownership guidelines. Unvested RSUs and shares of common stock owned count towards this requirement.~~

~~Each~~each non-employee director is required to own shares of our common stock having a value of at ~~least:~~

least three times their annual retainer ~~by the later of January 1, 2013 or~~within three years after their ~~election;~~election, and

four times their annual retainer ~~by the later of January 1, 2015 or~~within five years after their election.

Unvested RSUs and shares of common stock owned count towards this requirement. As of December 31, ~~2015,~~2017, all non-employee directors met our stock ownership ~~guidelines, except for Ms. Rucker, who joined the Board in 2015.~~

~~Fiscal 2015~~guidelines.

2017 Director Compensation Table

The following table provides information regarding compensation earned in ~~2015~~2017 by each non-employee ~~member of our Board.~~

Name
   Fees Earned
($)(1)    Stock
Awards ($)(2)    Change in Pension Value
and Nonqualified
Deferred Compensation
Earnings ($)(3)    All Other
Compensation
($)(4)    Total
($)
Janet K. Cooper
   95,000       102,436       N/A    0    197,436
C.L. (Jerry) Henry
   110,000       102,436       N/A    0    212,436
John E. Major
   107,804       102,436       0    0    210,240
John W. Norris, III
   105,000       102,436       N/A    0    207,436
Karen H. Quintos
   95,000       102,436       N/A    0    197,436
Kim K.W. Rucker
   55,416       102,436       N/A    0    157,852
Paul W. Schmidt
   115,000       102,436       N/A    0    217,436
Terry D. Stinson
   95,000       102,436       N/A    0    197,436
Gregory T. Swienton
   94,787       102,436       N/A    0    197,223
Todd J. Teske
   110,797       102,436       N/A    0    213,233
Richard L. Thompson
   60,000       387,617       N/A    0    447,617

director:



Name	Fees Earned ($)(1)	Stock Awards ($)(2)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3)	Total ($)
Janet K. Cooper	100,000	117,533	N/A	217,533
John E. Major	115,000	117,533	0	232,533
Max H. Mitchell	100,000	117,533	N/A	217,533
John W. Norris, III	110,000	117,533	N/A	227,533
Karen H. Quintos	100,000	117,533	N/A	217,533
Kim K.W. Rucker	100,000	117,533	N/A	217,533
Paul W. Schmidt	100,000	117,533	N/A	217,533
Terry D. Stinson	25,000	360,352	N/A	385,352
Gregory T. Swienton	120,000	117,533	N/A	237,533
Todd J. Teske	140,000	117,533	N/A	257,533


(1)	The table below identifies the allocation between cash and stock of the retainer fees earned in ~~2015~~2017 by each non-employee director:

Name
   Paid in Stock    Paid in Cash
Janet K. Cooper
   $     19,851       $     75,149
C.L. (Jerry) Henry
   19,851       90,149
John E. Major
   19,851       87,953
John W. Norris, III
   19,851       85,149
Karen H. Quintos
   94,787       213
Kim K.W. Rucker
   14,936       40,480
Paul W. Schmidt
   19,851       95,149
Terry D. Stinson
   94,787       213
Gregory T. Swienton
   94,787       0
Todd J. Teske
   19,851       90,946
Richard L. Thompson
   24,890       35,110



Name	Paid in Stock	Paid in Cash
Janet K. Cooper	19,640	80,360
John E. Major	19,640	95,360
Max H. Mitchell	19,640	80,360
John W. Norris, III	19,640	90,360
Karen H. Quintos	99,771	229
Kim K.W. Rucker	19,640	80,360
Paul W. Schmidt	19,640	80,360
Terry D. Stinson	24,928	72
Gregory T. Swienton	59,614	60,386
Todd J. Teske	19,640	120,360

(2)

For Mr. ~~Thompson,~~Stinson, the amount represents the incremental expense associated with the vesting of outstanding RSUs upon his retirement from the Board on ~~May 14, 2015.~~March 17, 2017. For the other non-employee directors, the amounts shown represent the grant date fair value (prior to any assumed forfeitures related to service-based vesting conditions, where applicable) in accordance with FASB ASC Topic 718, in connection with RSUs granted under the LII 2010 Incentive Plan. The grant date fair value of RSUs granted to non-employee directors in ~~2015,~~2017, calculated in accordance with FASB ASC Topic 718, is as follows:

   Grant Date
RSUs Granted in
2015 (#)

Grant Date Fair
Value Per Share
($)(a)

Grant Date
Fair
Value ($)


Each Non-Employee Director
   December 11, 2015    811       126.308       102,436



	Grant Date	RSUs Granted in 2017 (#)	Grant Date Fair Value Per Share ($)(a)	Grant Date Fair Value ($)

Each Non-Employee Director	December 8, 2017	595	197.535	117,533


(a)	$~~126.308~~197.535 is the dividend discounted value, based on a dividend ~~rate~~yield of ~~1.46%~~1.32%, of the average of the high and low NYSE trading prices of our common stock on the date of the grant, which was ~~$131.94.~~$205.530.


(3)	The ~~amounts~~amount shown represent the change in the present value of accumulated pension benefits that accrued during ~~2015~~2017 under our Directors’ Retirement Plan, based on a ~~3.92%~~3.37% discount rate.

~~(4)~~

~~The aggregate~~ Although the actual change in the present value of ~~perquisites~~accumulated pension benefits was negative, $0 is shown for ~~each non-employee director was less than $10,000.~~Mr. Major as required by SEC rules.

The following table provides information regarding the aggregate number of outstanding RSUs held by each non-employee director as of December 31, ~~2015.~~2017. RSUs generally vest on the third anniversary of the date of grant.



Name		Aggregate RSUs Outstanding as of December 31, ~~2015~~2017 (# of shares)
Janet K. Cooper	2,145	~~3,251~~
~~C.L. (Jerry) Henry~~		~~3,251~~
John E. Major	2,145	~~3,251~~
Max H. Mitchell	1,334
John W. Norris, III	2,145	~~3,251~~
Karen H. Quintos	2,145	~~1,950~~
Kim K.W. Rucker	2,145	~~811~~
Paul W. Schmidt	2,145	~~3,251~~
Terry D. Stinson	N/A	~~3,251~~
Gregory T. Swienton	2,145	~~3,251~~
Todd J. Teske	2,145	~~3,251~~
~~Richard L. Thompson~~		0

EQUITY COMPENSATION PLAN INFORMATION

We currently administer three equity compensation plans: the LII 2010 Incentive Plan, the 2012 Employee Stock Purchase Plan, and the Non-Employee Directors’ Compensation and Deferral Plan. The following table provides information as of December 31, ~~2015~~2017 regarding shares of our common stock that may be issued under these equity compensation plans.

Plan Category
   Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options,
Warrants and
Rights(1)    Weighted
Average
Exercise Price
of
Outstanding
Options,
Warrants and
Rights(2)    Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans(3)
Equity compensation plans approved by security holders

•    LII 2010 Incentive Plan
   1,886,842    $72.52    3,693,391
•    2012 Employee Stock Purchase Plan
   —    —    2,423,876
•    Non-Employee Directors’ Compensation and Deferral Plan
   —    —       243,156






Equity compensation plans not approved by security holders
   —    —    —






Total
   1,866,842    $72.52    6,360,423



Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1)	Weighted Average Exercise Price of Outstanding Options, Warrants and Rights(2)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans(3)
Equity compensation plans approved by security holders
• LII 2010 Incentive Plan	1,429,855	$	121.36	3,534,022
• 2012 Employee Stock Purchase Plan	—	—		2,391,162
• Non-Employee Directors’ Compensation and Deferral Plan	—	—		238,056
Equity compensation plans not approved by security holders	—	—		—
Total	1,429,855	121.36		6,163,240


(1)	Includes the following:

~~1,328,084~~1,066,526 stock appreciation rights granted under the LII 2010 Incentive Plan, which, upon exercise, will be net-settled in shares of our common stock;

~~291,245~~195,986 shares of our common stock to be issued upon the vesting of restricted stock units outstanding under the LII 2010 Incentive Plan; and

~~267,513~~167,343 shares of our common stock to be issued, assuming we meet the target performance goals for the applicable three-year performance period, of performance share units granted under the LII 2010 Incentive Plan.

The following table illustrates the number of shares of our common stock that may be issued pursuant to outstanding performance share units and the number of shares that may be available for future issuance under our equity compensation plans if our performance falls below or exceeds our target performance goals:

     Performance Level
     Below
Threshold      Threshold      Target      Maximum
Shares to be Issued Pursuant to Outstanding Performance Share Units
     0         133,756         267,513         535,026
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
     6,627,936         6,494,180         6,360,423         6,092,910



	Performance Level
	Below Threshold	Threshold	Target	Maximum
Shares to be Issued Pursuant to Outstanding Performance Share Units	0	87,856	175,712	351,424
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans	6,338,952	6,251,096	6,163,240	5,987,528


(2)	Excludes performance share unit and restricted stock unit awards because ~~such~~those awards do not have noan exercise price.

(3)

~~Assuming, with~~With respect to outstanding performance share units, the number shown assumes we meet target performance goals for the applicable three-year performance period, includes ~~3,693,391~~3,534,022 shares of common stock available for issuance under the LII 2010 Incentive Plan, of which ~~2,874,709~~2,728,085 shares are available for awards to employees and ~~818,682~~805,937 shares are available for awards to non-employee directors; ~~2,423,876~~2,391,162 shares of common stock available for issuance under the 2012 Employee Stock Purchase Plan, and ~~243,156~~238,056 shares of common stock available for issuance under the Non-Employee Directors’ Compensation and Deferral Plan.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

All related party transactions must be approved in accordance with the written Related Party Transactions Policy adopted by our Board. A related party transaction is a transaction or relationship since the beginning of the Company’s last fiscal year in which ~~(i)~~(1) the total amount involved will or may be expected to exceed $120,000, ~~(ii)~~(2) the Company or any of its subsidiaries is a participant, and ~~(iii)~~(3) any related party has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of an equity interest in another entity). A related party is any person who is or was since the beginning of the previous fiscal year an executive officer, director or nominee for election as a director, a stockholder owning more than 5% of the Company’s voting securities, or an immediate family member of any of these persons.

Our Board has considered certain limited types of transactions with related persons that meet specified criteria and determined that each of them is deemed to be pre-approved under the terms of the Related Party Transaction Policy. These include ~~(i)~~(1) transactions with companies and charitable contributions to organizations at which a related party’s only relationship is as an employee (other than an executive officer), if the amount of the transaction or contribution does not exceed the greater of $1,000,000 or 1% of that Company’s total annual revenue, ~~(ii)~~(2) transactions involving competitive bids, ~~(iii)~~(3) regulated transactions, and ~~(iv)~~(4) certain routine banking services.

Our Audit Committee is generally responsible for approving all related party transactions, which must be on terms that are fair to our Company and comparable to those that could be obtained in arm’s length dealings with an unrelated third party. In the event a related party transaction involves one or more members of the Audit Committee, the transaction must be approved by an ad hoc committee appointed by the Board and composed entirely of independent and disinterested directors. There were no transactions with related persons in ~~2015~~2017 that require disclosure pursuant to Item 404(a) of Regulation S-K.

Compensation Committee Interlocks and Insider Participation

~~During 2015, no~~

No member of the Compensation and Human Resources Committee was an officer or employee of our Company or any of our ~~subsidiaries.~~subsidiaries during 2017 or at any other time, and no member had any relationship with the Company requiring disclosure under “Certain Relationships and Related Party Transactions” above. In addition, none of our executive officers served on the board of directors or on the compensation committee of any other entity, for which any executive officers of such other entity served either on our Board or on our Compensation and Human Resources Committee.

OWNERSHIP OF COMMON STOCK

The following table provides information regarding the beneficial ownership of our common stock as of ~~January 15, 2016 (unless otherwise noted)~~March 1, 2018 by ~~(i)~~(1) each person known to own beneficially more than 5% of our common stock, ~~(ii)~~(2) each of our directors, ~~(iii)~~(3) each of our NEOs, and ~~(iv)~~(4) all current directors and executive officers as a group.

For purposes of this table, “beneficial ownership” (as defined in Rule 13d-3 of the ~~Securities~~ Exchange Act of ~~1934 (the “Exchange Act”)~~) takes into account shares as to which the individual has or shares voting or investment power as well as shares that may be acquired within 60 days (such as by exercising vested ~~stock options or~~ SARs, receiving earned performance shares or the vesting of RSUs) and is different from beneficial ownership for purposes of Section 16 of the Exchange Act. As a result, the numbers below may differ from the numbers reported in forms filed pursuant to Section 16 ~~(e.g.~~(e.g., Forms 4).

To our knowledge and unless otherwise indicated, each stockholder listed below has sole voting and investment power over the shares listed as beneficially owned by such stockholder. Percentage of ownership is based on ~~43,387,955~~41,318,011 shares of common stock outstanding as of ~~February 16, 2016.~~March 20, 2018. Number of shares held by beneficial owners of more than 5% of our common stock and percentage ownership are as of the date of the applicable SEC filing made by those owners (unless otherwise noted).

Name of Beneficial Owner
     Common Stock
Held (#)      Common Stock
that
may be
Acquired
Within 60
Days(#)      Total Shares
Beneficially
Held(#)      Percent of
Class (%)
5% Stockholders

John W. Norris, Jr.(1)
     3,181,613         —           3,181,613         7.3 %
BlackRock, Inc.(2)
     2,924,865         —           2,924,865         6.7 %
JPMorgan Chase & Co.(3)
     2,897,288         —           2,897,288         6.7 %
Wellington Management Company, LLP(4)
     2,105,108         —           2,105,108         4.9 %
T. Rowe Price Associates, Inc.(5)
     2,937,726         —           2,937,726         6.8 %
The Vanguard Group(6)
     2,943,660         —           2,943,660         6.8 %
Directors and Executive Officers

Todd M. Bluedorn
     171,049         237,785         408,834         *
Janet Cooper(7)
     12,318         —           12,318         *
C. L. (Jerry) Henry
     42,345         —           42,345         *
John E. Major(8)
     19,498         —           19,498         *
David W. Moon
     89,909         72,867         162,776         *
John W. Norris, III(9)
     693,964         —           693,964         1.6 %
Kim K.W. Rucker
     130         —           130         *
Karen H. Quintos
     1,182         —           1,182         *
Joseph Reitmeier
     7,908         25,584         33,492         *
Paul W. Schmidt(10)
     17,835         —           17,835         *
Daniel M. Sessa
     25,608         29,349         54,957         *
Terry D. Stinson
     39,290         —           39,290         *
Gregory T. Swienton
     14,886         —           14,886         *
Todd J. Teske
     5,154         —           5,154         *
Douglas L. Young
     49,966         26,650         76,616         *







All current executive officers and directors as a group (19 persons)
     1,227,505         454,771         1,682,276         3.9 %



Name of Beneficial Owner	Common Stock Held (#)	Common Stock that may be Acquired Within 60 Days(#)	Total Shares Beneficially Held(#)	Percent of Class (%)
5% Stockholders
BlackRock, Inc.(1)	3,538,431	0	3,538,431	8.6	%
The Vanguard Group(2)	3,287,882	0	3,287,882	8.0	%
John W. Norris, Jr.(3)	3,181,613	0	3,181,613	7.7	%
T. Rowe Price Associates, Inc.(4)	2,170,780	0	2,170,780	5.3	%
Directors and Executive Officers
Todd M. Bluedorn	146,049	167,751	313,800	*
Janet Cooper(5)	12,938	0	12,938	*
John E. Major(6)	19,179	0	19,179	*
Max H. Mitchell	743	0	743	*
David W. Moon	109,257	76,001	185,258	*
John W. Norris, III(7)	667,511	0	667,511	1.6	%
Karen H. Quintos	3,546	0	3,546	*
Joseph Reitmeier	9,561	49,915	59,476	*
Kim K.W. Rucker	371	0	371	*
Paul W. Schmidt(8)	8,866	0	8,866	*
Daniel M. Sessa	39,798	47,529	87,327	*
Gregory T. Swienton	18,221	0	18,221	*
Todd J. Teske	7,835	0	7,835	*
John D. Torres	2,808	9,391	12,199	*
Douglas L. Young	48,923	58,677	107,600	*
All directors and executive officers as a group (19 persons)	1,143,315	483,327	1,626,642	3.9	%



*	Less than 1% of outstanding common stock


(1)	As reported by BlackRock, Inc., 55 East 52nd Street, New York, NY 10055, on an amendment to Schedule 13G filed with the Securities and Exchange Commission on January 25, 2018. BlackRock, Inc. reported sole voting power with respect to 3,299,440 shares and sole dispositive power with respect to 3,538,431 shares

(2)

As reported by The Vanguard Group, 100 Vanguard Boulevard, Malvern, PA 19355 on an amendment to Schedule 13G filed with the Securities and Exchange Commission on February 9, 2018. The Vanguard Group reported sole voting power with respect to 28,902 shares, shared voting power with respect to 6,764 shares, sole dispositive power with respect to 3,252,516 shares and shared dispositive power with respect to 35,366 shares.

(3)

Solely based on ~~the~~an amendment to Schedule 13D filed with the Securities and Exchange Commission ~~filed~~ by Mr. Norris, Jr. ~~on August 12, 1999, and amended~~, 3831 Turtle Creek Blvd, #19B, Dallas, TX 75219, on April 2,6, 2015, and includes (a) 2,545,105 shares directly owned by the Norris Family Limited Partnership, which is controlled by Mr. Norris, Jr.; (b) 321,750 shares directly owned by the John W. Norris, Jr. Trust A, for which Mr. Norris, Jr. is a trustee and a beneficiary and (c) 214,758 shares held by the John and Terry Norris Living Trust, for which Mr. Norris Jr. is a trustee.

~~(2)~~

~~As reported by BlackRock, Inc., 55 East 52~~^nd ~~Street, New York, NY 10055, on an amendment to Schedule 13G filed with the Securities and Exchange Commission on January 22, 2016. BlackRock, Inc.~~ Mr. Norris, Jr. reported sole voting ~~power with respect to 2,782,890 shares~~ and ~~sole~~ dispositive power with respect to ~~2,924,865 shares.~~

~~(3)~~

~~As reported by JPMorgan Chase & Co., 270 Park Avenue, New York, NY 10017 on a Schedule 13G filed with the Securities~~2,759,863 shares and ~~Exchange Commission on January 28, 2016. JPMorgan Chase reported sole voting power with respect to 2,581,756 shares,~~ shared voting ~~power with respect to 8,869 shares, sole~~and dispositive power with respect to ~~2,869,094 shares and shared dispositive power with respect to 28,182~~321,750 shares.

~~(4)~~

As reported by Wellington Management Group LLP, and related entities on an amendment to Schedule 13G filed with the Securities and Exchange Commission on February 11, 2016 Wellington Management Group LLP and the related entities, 280 Congress Street, Boston, MA 02210, reported shared dispositive power with respect to 2,105,108 shares and shared voting power with respect to 1,831,378 shares.

~~(5)~~(4)

As reported by T. Rowe Price Associates, Inc. (“Price Associates”), 100 E. Pratt Street, Baltimore, MD 21202, on an amendment to Schedule 13G filed with the Securities and Exchange Commission on February ~~11, 2016.~~14, 2018. Price Associates ~~reported sole dispositive power with respect to 2,937,726 shares and sole voting power with respect to 559,386 shares.~~

~~(6)~~

~~As reported by The Vanguard Group, 100 Vanguard Boulevard, Malvern, PA 19355 on an amendment to Schedule 13G filed with the Securities and Exchange Commission on February 10, 2016. The Vanguard Group~~ reported sole voting power with respect to ~~29,759~~416,505 shares ~~shared voting power with respect to 2,200 shares,~~and sole dispositive power with respect to ~~2,914,301 shares and shared dispositive power with respect to 29,359~~2,170,780 shares.

~~(7)~~
(5)	Excludes 6,000 shares held by the Janet K. Cooper 2012 Trust. Ms. Cooper disclaims beneficial ownership of such shares.

~~(8)~~	~~Includes 14,447~~
(6)	All shares held by the Major Family Trust.

~~(9)~~

(7)

Includes (a) ~~12,225~~11,301 shares held by the L.C. Norris Trust, 21,992 shares held by the W.H. Norris Revocable Trust ~~16,147~~and 28,372 shares held by the B.W. Norris Revocable Trust, ~~11,301 shares held by the L.C. Norris Trust and 12,225 shares held by the B.W. Norris Trust,~~ for ~~each of which Mr. Norris’s brother is a trustee; (b) 9,767 shares held by the W.H. Norris Revocable Trust, of~~ which Mr. Norris is a ~~co-trustee;~~co-trustee and disclaims beneficial ownership; (b) 1,560 shares held by the Norris-Newman Minors Trust, for which Mr. Norris is the trustee and for which Mr. Norris disclaims beneficial ownership; (c) 321,750 shares held by the John W. Norris, Jr. Trust A, offor which John W. Norris, II is the trustee and for which Mr. Norris ~~is one of the trustees;~~disclaims beneficial ownership; (d) 16,838 shares held by his spouse, Catherine Houlihan, for which Mr. Norris disclaims beneficial ownership; (e) 1,000 shares held by one of Mr. Norris’s minor children, for which Mr. Norris disclaims beneficial ownership; and ~~(e) 26,694~~(f) 81,439 shares held by ~~Mr. Norris’s minor children, of which Mr. Norris disclaims beneficial ownership.~~a Grantor Retained Annuity Trust.

~~(10)~~
(8)	Includes ~~16,113~~8,113 shares held by the Mary T. Schmidt Irrevocable Trust U/A/D 10-16-12 of which Mr. Schmidt is a co-trustee and a beneficiary and ~~1,722~~1,753 shares held by the Paul W. Schmidt Living Trust.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the ~~Securities~~ Exchange Act ~~of 1934~~ requires our directors and executive officers and persons who beneficially own more than 10% of our common stock to timely file with the SEC initial reports of ownership and reports of changes in their ownership of our common stock. SEC regulations require our directors, executive officers and greater than 10% stockholders to furnish us with copies of these reports.

To our knowledge, based solely on a review of the reports we filed on behalf of our directors and executive officers, written representations from these persons that no other reports were required and all Section 16(a) reports provided to us, we believe that during fiscal ~~2015~~2017 our directors, executive officers and holders of more than 10% of our common stock filed the required reports on a timely basis under Section 16(a). ~~The Company, however, now believes that it did not timely file several reports for John E. Major, a director, related to several gifts made before fiscal 2011.~~

OTHER INFORMATION

Proxy Solicitation

We will pay for the cost of this proxy solicitation. In addition to solicitation by mail, our directors, officers and employees may solicit proxies from stockholders by telephone, facsimile, email or in person. They will not be paid for soliciting proxies but may be reimbursed for out-of-pocket expenses related to the proxy solicitation. We have retained Georgeson ~~Inc.~~LLC to assist in the solicitation of proxies for a fee of $12,000 plus reimbursement of expenses. We will also make arrangements with brokerage houses and other custodians, nominees and fiduciaries to send the proxy materials to beneficial owners of our common stock. Upon request, we will reimburse the brokerage houses and custodians for their reasonable expenses in so doing.

Multiple Stockholders Sharing the Same Address

We have adopted a procedure approved by the SEC called “householding.” Under this procedure, stockholders who have the same address and last name will receive only one copy of our Notice of Annual Meeting of Stockholders, Proxy Statement, Annual Report to Stockholders, and Annual Report on Form 10-K, unless one or more of these stockholders notifies us by contacting our Investor Relations department indicated below that they wish to continue receiving individual copies. This procedure helps reduce our printing costs and postage fees.

Stockholders who participate in householding will continue to receive separate Proxy Cards. Also, householding will not in any way affect dividend check mailings.

If you are eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple copies of the Notice of Annual Meeting of Stockholders, Proxy Statement, Annual Report to Stockholders, and Annual Report on Form 10-K, or if you hold stock in more than one account, and, in either case, you wish to receive only a single copy of each of these documents for your household, please contact our Investor Relations department by telephone at (972) 497-5000 or in writing at 2140 Lake Park Blvd., Richardson, Texas 75080, Attention: Investor Relations.

If you participate in householding and wish to receive a separate copy of these documents, please ~~contact~~notify our Investor Relations department as indicated ~~above.~~

above and we will promptly send you a separate copy.

Form 10-K

Our Annual Report on Form 10-K (excluding exhibits) is a part of our ~~2015~~2017 Annual Report to Stockholders, which is being sent with this Proxy Statement. If you are entitled to vote at the Annual Meeting of Stockholders, you may obtain a copy of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2015,~~ 2017,including the financial statements required to be filed with the SEC, without charge, by contacting our Investor Relations department by telephone at (972) 497-5000 or in writing at 2140 Lake Park Blvd., Richardson, Texas 75080, Attention: Investor Relations.

Stockholder Proposals for the ~~2017~~2019 Annual Meeting of Stockholders

Proposals for Inclusion in the Proxy Statement

If you wish to submit a proposal for possible inclusion in our ~~2017~~2019 Proxy Statement, we must receive your notice, in accordance with the rules of the SEC, on or before December ~~2, 2016.~~5, 2018. The proposal should be sent in writing to 2140 Lake Park Blvd., Richardson, Texas 75080, Attention: Corporate Secretary.

Proposals Not for Inclusion in the Proxy Statement to be Offered at the ~~2017~~2019 Annual Meeting

If you wish to introduce a proposal at the ~~2017~~2019 annual meeting of stockholders but do not want your proposal to be included in our ~~2017~~2019 proxy materials, our Bylaws require you to follow certain procedures and provide certain information and representations related to your proposal. Among other requirements, you must give written notice to our Corporate Secretary of your intention to introduce your proposal and must represent that ~~(i)~~(1) you are a ~~holder~~stockholder of record of Company stock entitled to vote at the annual meeting and ~~(ii)~~(2) you intend to appear at the annual meeting to present your proposal. We must receive your notice at least 60 days, but no more than 90 days, prior to the ~~2017~~2019 annual meeting of stockholders. If we give less than 70 days’ notice of the ~~2017~~2019 annual meeting of

stockholders date, we must receive your notice within 10 days following the date on which notice of the date of the ~~2017~~2019 annual meeting of stockholders was mailed or such public disclosure was made to our stockholders. In the case of a special meeting of stockholders, we must receive your notice within 10 days following the date on which notice of such meeting is first given to stockholders.

Your notice must include certain information about you, your proposal, and any person “acting in concert” with you and why implementation of your proposal would be in the best interest of the Company and its stockholders. Your notice must also include the shares of the Company’s stock you beneficially own (including any option, warrant or similar right and any other direct or indirect right or interest that may enable you to share in any profit, or manage the risk, from any change in the value of the Company’s stock), any proxy or other right you hold to vote the Company’s stock (or any similar right which has the effect of increasing or decreasing your voting power), performance-related fees which you would be entitled to as a result of any change in the value of the Company’s stock, any material interest you have in your proposal and any other information required to disclosed in a proxy statement. Depending on the nature of the proposal, additional information may be required. If you do not appear at the meeting to represent your proposal, your proposal will be disregarded.



	By Order of the Board of Directors,

	John D. Torres
	Corporate Secretary

Richardson, Texas

April ~~1, 2016~~

~~PROXY VOTING INSTRUCTIONS~~

~~YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.~~

~~We encourage you to take advantage~~4, 2018

Table of ~~Internet or telephone voting.~~

~~Both are available 24 hours a day, 7 days a week.~~

~~Internet and telephone voting is available through 11:59 P.M Eastern Time, May 11, 2016.~~



		~~VOTE BY INTERNET~~		~~WWW.FIRSTCOASTRESULTS.COM/LENNOX~~

		Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time, May 11, 2016. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. OR

		~~VOTE BY TELEPHONE~~		~~1-800-303-7885~~

		~~Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time, May 11, 2016. Have your proxy card in hand when you call and then follow the instructions.~~ OR

		~~VOTE BY MAIL~~

		Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided to: IVS Associates, Inc., C/O First Coast Results, Inc., P.O. Box 3672, Ponte Vedra Beach, FL 32004-9911. ~~If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.~~ ~~Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.~~

~~CONTROL NUMBER~~

~~If submitting a proxy by mail, please sign and date the card below and fold and detach card at perforation before mailing.~~

~~LENNOX INTERNATIONAL PROXY SOLICITED BY LENNOX BOARD OF DIRECTORS~~

~~The Board of Directors recommends a vote FOR all nominees in Proposal 1 and FOR Proposals 2 and 3.~~

~~Proposal 1~~ ~~Election of Directors~~


~~(01) Todd M. Bluedorn (02) Kim K. W. Rucker (03) Terry D. Stinson~~

~~FOR ALL~~	q	~~WITHHOLD ALL~~	q	~~FOR ALL EXCEPT~~	q

~~To withhold your vote for any individual nominee(s), mark “For All Except” box and write the number(s) of the nominees(s) on the line below.~~



		~~FOR~~	~~AGAINST~~	~~ABSTAIN~~

*~~Proposal 2~~*	~~Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the 2016 fiscal year.~~	q	q	q

*~~Proposal 3~~*	~~Advisory vote to approve the compensation of the named executive officers as disclosed in our proxy statement.~~	q	q	q

~~Note:~~ In their discretion, John D. Torres and Todd M. Bluedorn, the proxies named in this card, are authorized to vote upon such business as may properly come before the Annual Meeting in accordance with the terms of our Amended and Restated Bylaws.

~~THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.~~

Contents



~~Signature~~


~~Signature (Capacity)~~


~~Date~~
NOTE: Please sign exactly as your name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If stockholder is a corporation, please sign full corporate name by authorized officers, giving full title as such. If a partnership, please sign in partnership name by authorized person, giving full title as such.

~~Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting~~

~~of Stockholders to be held May 12, 2016. The Proxy Statement and our 2015 Annual~~

~~Report to Stockholders are available at:~~ ~~www.viewproxymaterials.com/lennox~~

~~SIGN, DATE AND MAIL YOUR PROXY TODAY,~~

~~UNLESS YOU HAVE VOTED BY INTERNET OR TELEPHONE.~~

~~IF YOU HAVE NOT VOTED BY INTERNET OR TELEPHONE, PLEASE DATE, MARK, SIGN AND RETURN~~

~~THIS PROXY PROMPTLY. YOUR VOTE, WHETHER BY INTERNET, TELEPHONE OR MAIL, MUST BE~~

~~RECEIVED NO LATER THAN 11:59 P.M. EASTERN TIME, MAY 11, 2016,~~

~~TO BE INCLUDED IN THE VOTING RESULTS. ALL VALID PROXIES RECEIVED PRIOR TO 11:59 P.M.~~

~~EASTERN TIME, MAY 11, 2016 WILL BE VOTED.~~

~~Continued and to be signed on the reverse side.~~

~~If submitting a proxy by mail, please sign and date the card on reverse and fold and detach card at perforation before mailing.~~

~~ANNUAL MEETING OF STOCKHOLDERS~~

~~May 12, 2016, 10:30 a.m.~~

~~THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS~~

The signatory of this Proxy, by execution on the reverse side of this Proxy, hereby appoints and constitutes Todd M. Bluedorn and John D. Torres, and each of them, with full power of substitution, with the powers the signatory of this Proxy would possess if personally present, to vote all shares of Lennox International Inc. Common Stock entitled to be voted by the signatory at the Annual Meeting of Stockholders to be held at 10:30 a.m., local time, on May 12, 2016, at the Company’s Corporate Headquarters, 2140 Lake Park Blvd., Richardson, Texas 75080, or at any reconvened meeting after any adjournment or postponement thereof, on the matters set forth on the reverse side in accordance with any directions given by the signatory and, in their discretion, on all other matters that may properly come before the Annual Meeting or any reconvened meeting after any adjournment or postponement thereof.

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED ON THE REVERSE SIDE. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED “FOR” ALL NOMINEES LISTED IN PROPOSAL 1, “FOR” PROPOSALS 2 AND 3, AND IN THE NAMED PROXIES’ DISCRETION ON ALL OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING.

~~SEE REVERSE SIDE~~



¨	☐	Preliminary Proxy Statement

¨	☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

x	☒	Definitive Proxy Statement

¨	☐	Definitive Additional Materials

¨	☐	Soliciting Material Pursuant to §240.14a-12




x	☒	No fee required.

¨	☐	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

		(1)		Title of each class of securities to which transaction applies:


	(2)		Aggregate number of securities to which transaction applies:


	(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):


	(4)		Proposed maximum aggregate value of transaction:


	(5)		Total fee paid:

¨
☐	Fee paid previously with preliminary materials.

¨	☐	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

		(1)		Amount Previously Paid:


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	~~Date Filed:~~



		*~~Todd M. Bluedorn~~*, 52, became Chief Executive Officer and was elected as a director of our Company in April 2007. He was appointed as Chairman of the Board on May 10, 2012. Prior to joining the Company, Mr. Bluedorn served in numerous senior management positions for United Technologies Corporation since 1995, including President, Americas — Otis Elevator Company; President, North America — Commercial Heating, Ventilation and Air Conditioning for Carrier Corporation; and President, Hamilton Sundstrand Industrial. He began his professional career with McKinsey & Company in 1992. A graduate of West Point with a B.S. in electrical engineering, Mr. Bluedorn served in the United States Army as a combat engineer officer and United States Army Ranger from 1985 to 1990. He received his MBA from Harvard University School of Business in 1992.

		~~Mr. Bluedorn also serves on the Board of Directors of Eaton Corporation, a diversified industrial manufacturer, and on the Washington University in St. Louis Board of Trustees.~~

		Mr. Bluedorn possesses considerable industry knowledge and executive leadership experience. Mr. Bluedorn’s extensive knowledge of our Company and its business, combined with his drive for excellence and innovation, position him well to serve as CEO and a director of our Company.

		*~~Terry D. Stinson~~*, 74, has served as a director of our Company since 1998. He is a member of the Board Governance Committee and the Compensation and Human Resources Committee. Mr. Stinson currently serves as Executive Vice President of AAR Corp., an international, publicly traded aerospace manufacturing and services firm. In addition, Mr. Stinson has served as CEO of his own consulting practice, Stinson Consulting, LLC, engaged in strategic alliances and marketing for the aerospace industry, since 2001. From 2002 to 2005, Mr. Stinson served as CEO of Xelus, Inc., a collaborative enterprise service management solution company. From 1998 to 2001, Mr. Stinson was Chairman and CEO of Bell Helicopter Textron Inc., the world’s leading manufacturer of vertical lift aircraft, and served as its President from 1996 to 1998. From 1991 to 1996, Mr. Stinson served as Group Vice President and Segment President of Textron Aerospace Systems and Components for Textron Inc. Prior to that position, he was President of the Hamilton Standard Division of United Technologies Corporation, a defense supply company, since 1986.

		Mr. Stinson is on the Board of Directors of CPI Aerostructures, Inc., a manufacturer of structural assemblies for aircraft and previously served on the Board of Directors of Triumph Group, Inc., a company engaged in the manufacturing and repair of aircraft components, subassemblies and systems, from September 2003 to March 2008.

		As a former senior executive of two Fortune 500 companies, Mr. Stinson contributes extensive general management experience in technology-driven businesses, and a thorough knowledge of corporate governance, director recruitment and development, talent management, and strategy development in his service as a director.


	2015		2014
Audit Fees(1)	$	2,882	$	2,570
Audit-Related Fees(2)		4		2
Tax Fees(3)		246		214
All Other Fees		0		0

TOTAL	$	3,132	$	2,786





UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549


	SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. )


~~Sincerely,~~

	Sincerely,

	Todd M. Bluedorn
	Chairman of the Board and Chief Executive Officer




NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 2018


	Page
~~Page~~

GENERAL INFORMATION REGARDING THE ~~2016~~2018 ANNUAL MEETING OF STOCKHOLDERS	1
	1

PROPOSAL 1: ELECTION OF DIRECTORS	4
	4

PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE ~~2016~~2018 FISCAL YEAR	9
	10
CORPORATE GOVERNANCE	12
~~AUDIT COMMITTEE REPORT~~		11

~~CORPORATE GOVERNANCE~~		12

PROPOSAL 3: ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS	17
	18

EXECUTIVE COMPENSATION	18
	20

DIRECTOR COMPENSATION	47
	51

EQUITY COMPENSATION PLAN INFORMATION	50
	54

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS	51
	55

OWNERSHIP OF COMMON STOCK	52
	56

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE	54
	57

OTHER INFORMATION		58	55


		*~~Kim K.W. Rucker~~*, 49, has served as a director of our Company since 2015. She is a member of the Audit Committee and the Board Governance Committee. Ms. Rucker became Executive Vice President, General Counsel and Secretary at Tesoro Corporation in March 2016 and previously was Executive Vice President, Corporate & Legal Affairs, General Counsel and Corporate Secretary at Kraft Foods Group, Inc., a global manufacturer and distributor of food products and beverages until July 2015. Prior to joining Kraft in 2012, Ms. Rucker served as the Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer at Avon Products, Inc., a global manufacturer of beauty and related products, since 2008. Before joining Avon, Ms. Rucker was Senior Vice President, Corporate Secretary and Chief Governance Officer for Energy Future Holdings, Corp., an energy company, since 2004. She began her legal career at Sidley Austin LLP in its Chicago, Illinois office.

		~~Ms. Rucker has a BBA in Economics from the University of Iowa, a JD from Harvard Law School and a Master in Public Policy from the John F. Kennedy School of Government at Harvard University.~~

		~~Ms. Rucker contributes a broad knowledge of law, corporate governance, internal and external communications, community involvement activities and government affairs in her service as a director.~~


		*John E. Major*, ~~70,~~72, has served as a director of our Company since 1993. He is the Chairman of the Compensation and Human Resources Committee and a member of the Board Governance Committee. Mr. Major is President of MTSG, a company that provides consulting, investment and governance services, which he formed in 2003. From 2003 to 2006, he served as CEO of Apacheta Corporation, a mobile wireless software company whose products are used to manage inventory and deliveries. From 2000 to 2003, he served as Chairman and CEO of Novatel Wireless, Inc., a leading provider of wireless Internet solutions. ~~Prior to joining Novatel Wireless, Mr. Major served as President and CEO of Wireless Knowledge, Inc., a joint venture between Microsoft Corporation and QUALCOMM Inc., from 1998 through 1999.~~ From 1997 to 1998, he served as Executive Vice President of ~~QUALCOMM and President of its Wireless Infrastructure Division.~~QUALCOMM. Prior to joining QUALCOMM, Mr. Major served as Senior Vice President and Chief Technology Officer at Motorola, Inc., a manufacturer of telecommunications equipment. Prior to that he served as Senior Vice President and General Manager for Motorola’s Worldwide Systems Group of the Land Mobile Products Sector.

		Mr. Major currently serves as the Chairman of the Board of Resonant Inc., a technology company creating RF filters for mobile devices, and on the Boards of Directors of Littelfuse, Inc., a manufacturer of circuit protection devices, and ORBCOMM Inc., a satellite communications service provider.

		Mr. Major contributes substantial experience in product innovation, compensation programs, and mergers and acquisitions in his service as a director.



		*Gregory T. Swienton*, ~~66,~~68, has served as a director of our Company since 2010. He is ~~a member~~the Chair of the Audit Committee and a member of the Board Governance Committee. Mr. Swienton was an adviser to Ryder System, Inc., a supplier of transportation, logistics and supply chain management solutions from May 2013 until May 2015. He previously was Executive Chairman of Ryder System, Inc., from January 2013 to May 2013, after having been Chairman of Ryder System, Inc. since May 2002 and Chief Executive Officer since November 2000. Mr. Swienton joined Ryder as President and Chief Operating Officer in June 1999. Before joining Ryder, Mr. Swienton was Senior Vice President-Growth Initiatives of Burlington Northern Santa Fe Corporation (BNSF). Prior to that he was BNSF’s Senior Vice President-Coal and Agricultural Commodities Business Unit, and previously had been Senior Vice President of its Industrial and Consumer Units. He joined ~~the former Burlington Northern Railroad~~BNSF in June 1994 as Executive Vice President-Intermodal Business Unit. Prior to joining ~~Burlington Northern,~~BNSF, Mr. Swienton was Executive Director-Europe and Africa of DHL Worldwide Express in Brussels, Belgium from 1991 to 1994, and prior to that, he was DHL’s Managing Director-Western and Eastern Europe from 1988 to 1990, also located in Brussels. For the five years prior to these assignments, Mr. Swienton was Regional Vice President of DHL Airways, Inc. in the United States. From 1971 to 1982, Mr. Swienton held various national account, sales and marketing positions with AT&T and Illinois Bell Telephone Company.

		Mr. Swienton serves on the Board of Directors of Harris Corporation, a supplier of communications and information technology products.

		Mr. Swienton contributes extensive international business experience, deep expertise in global distribution and supply chain innovations, as well as experience in growth initiatives, in his service as a director.



		*Todd J. Teske,*~~, 51,~~ 53, has served as a director of our company since 2011 and as Lead Director since May, 2015. He is ~~a member~~the Chair of the Board Governance Committee and a member of the Compensation and Human Resources Committee. In Since 2010, Mr. Teske ~~became~~has served as the Chairman, President and Chief Executive Officer of Briggs & Stratton Corporation, a world leader in gasoline engines for outdoor power equipment, portable generators, and lawn and garden powered equipment and related accessories. Before becoming CEO of Briggs & Stratton in January 2010, he served as ~~the company’s~~its President and Chief Operating Officer, President of its power products business, head of corporate development and Controller.

		Mr. Teske serves as the Chairman of the Board of Briggs & Stratton. He also serves on the Board of Directors of Badger Meter, Inc., a leading innovator, manufacturer and marketer of flow measurement and control products.

		The Board recognizes that a director’s service in an executive officer role at another company can be time consuming. Accordingly, the Board reviewed Mr. Teske’s role as Chairman, President and Chief Executive Officer of Briggs & Stratton Corporation, and his directorship with Badger Meter, Inc., and determined that the experience gained in those roles enhances his contributions to the Board. There is a strong consensus among the Board that Mr. Teske is willing and able to devote the time required to perform Board activities, and that his service with Briggs & Stratton and Badger Meter will not interfere with his duties to Lennox and its shareholders. Mr. Teske’s exemplary attendance record at Lennox indicates his commitment to his Board duties. As an active CEO and former corporate controller, Mr. Teske contributes extensive expertise in the areas of management, finance, accounting, manufacturing and corporate governance in his service as a director.



		*Janet K. ~~Cooper~~*~~, 62,~~Cooper, 64, has served as a director of our Company since 1999. She is a member of the Audit Committee and the Public Policy Committee. From 2002 to 2008, Ms. Cooper served as Senior Vice President and Treasurer of Qwest Communications International Inc. From 2001 to 2002, she served as Chief Financial Officer and Senior Vice President of McDATA Corporation, a global leader in open storage networking solutions. From 2000 to 2001, she served as Senior Vice President, Finance of Qwest. From 1998 to 2000, she served in various senior level finance positions at US West Inc., a regional Bell operating company, including Vice President, Finance and Controller and Vice President and Treasurer. From 1978 to 1998, Ms. Cooper served in various capacities with the Quaker Oats Company, including Vice President, Treasurer and Tax from 1997 to 1998 and Vice President, Treasurer from 1992 to 1997.

		Ms. Cooper serves on the Board of Directors of The Toro Company, a manufacturer of equipment for lawn and turf care ~~maintenance; MWH Global, Inc., a private company providing water, wastewater, energy, natural resource, program management, consulting, and construction services to clients around the world~~maintenance and Resonant Inc., a technology company creating RF filters for mobile devices.

		Ms. Cooper contributes a substantial financial background and extensive experience in capital markets, tax, accounting matters, and pension plan investments in her service as a director.



		*John W. Norris, III,*~~, 58,~~ 60, has served as a director of our Company since 2001. He is the Chairman of the Public Policy ~~committee~~Committee and a member of the Compensation and Human Resources Committee. Mr. Norris is a partner and co-founder of Maine Network Partners and is the founding Chairman of the Environmental Funders Network. From 2000 to 2005, he served as the Associate Director of Philanthropy for the Maine Chapter of The Nature Conservancy and from 2006 to 2007 as Program Officer for the Northern Forest Center. Mr. Norris was Co-Founder and President of Borealis, Inc., an outdoor products manufacturer, from 1988 to 2000 and served as an economic development Peace Corps Volunteer in Jamaica ~~West Indies~~ from 1985 to 1987. Before joining the Peace Corps, Mr. Norris completed a graduate school internship at Lennox Industries Inc., a subsidiary of the Company, in 1983.

		Mr. Norris contributes substantial experience and knowledge on environmental issues, non-governmental organizations, and organizational development in his service as a director.



~~John D. Torres~~
~~Corporate Secretary~~


		~~She currently serves~~ Ms. Quintos earned a master’s degree in marketing and international business from New York University, and a Bachelor of Science in supply chain management from Pennsylvania State University. Ms. Quintos is also on the ~~Boards~~board of ~~Directors of the ANA Marketing, Catalyst, the~~ Susan G. Komen for the Cure and ~~the~~ Penn State’s Smeal College of Business, ~~School.~~

		and was a 2014 recipient of the Smeal College of Business’ highest honor, the Distinguished Alumni Award. She also is founder and executive sponsor of Dell’s employee resource group dedicated to women. Ms. Quintos contributes a broad knowledge of marketing, communications, brand strategy, operations and supply chain management in her service as a director.



		*Paul W. Schmidt*, ~~71,~~73, has served as a director of our Company since 2005. He is ~~the Chairman~~a member of the Audit Committee and ~~a member of~~ the Public Policy Committee. In ~~early~~ 2007, Mr. Schmidt retired from his position as Corporate Controller of General Motors Corporation, a position he held since 2002. He began his career in 1969 as an analyst with the Chevrolet Motor Division of General Motors and subsequently served in a wide variety of senior leadership roles for General Motors, including financial, product and factory management, business planning, investor relations and international operations. ~~Mr.~~ Schmidt ~~also served as Director of Capital, Performance~~was a plant manager in Pittsburgh, Pennsylvania from 1982 to 1984 before managing the largest automotive product program in GM’s history from 1985 to 1991. He subsequently led the automotive finance organizations in Europe from 1991 to 1994 and ~~Overseas Analysis~~then in ~~General Motors’s New York Treasurer’s Office.~~


		North America from 1994 to 2001 before becoming Corporate Controller. Mr. Schmidt contributes a thorough knowledge of U.S. GAAP and extensive experience in financial statement preparation, accounting matters, and risk management, as well as manufacturing expertise, in his service as a director.



		Todd M. Bluedorn, 54, became Chief Executive Officer and was elected as a director of our Company in April 2007. He was appointed as Chairman of the Board in May, 2012. Prior to joining the Company, Mr. Bluedorn served in numerous senior management positions for United Technologies Corporation since 1995, including President, Americas — Otis Elevator Company; President, North America — Commercial Heating, Ventilation and Air Conditioning for Carrier Corporation; and President, Hamilton Sundstrand Industrial. He began his professional career with McKinsey & Company in 1992. A graduate of West Point with a B.S. in electrical engineering, Mr. Bluedorn served in the United States Army as a combat engineer officer and United States Army Ranger from 1985 to 1990. He received his M.B.A. from Harvard University School of Business in 1992. Mr. Bluedorn also serves on the Board of Directors of Eaton Corporation, a diversified industrial manufacturer, Texas Instruments Incorporated, a global designer and manufacturer of semiconductors and the Washington University in St. Louis Board of Trustees. Mr. Bluedorn possesses considerable industry knowledge and executive leadership experience. Mr. Bluedorn’s extensive knowledge of our Company and its business, combined with his drive for excellence and innovation, position him well to serve as CEO and a director of our Company.



		Max H. Mitchell, 54, has served as a director of our company since 2016. He is a member of the Audit Committee and the Board Governance Committee. Mr. Mitchell is the President, Chief Executive Officer and a Director of Crane Co., a diversified manufacturer of highly engineered industrial products. Before being elected President and Chief Executive Officer of Crane Co. in 2014, he served as the President and Chief Operating Officer of Crane Co. from 2013 to 2014, Executive Vice President and Chief Operating Officer of Crane Co. from 2011 to 2013, and Group President, Fluid Handling segment of Crane Co. from 2005 to 2012. Mr. Mitchell also served as an executive of Pentair Corporation and Danaher Corporation and served in finance and operational roles at Ford Motor Company. Mr. Mitchell has a M.B.A. in finance and strategic planning from the University of Pittsburgh and a B.A. from Tulane University. As an experienced executive in large manufacturing companies, Mr. Mitchell contributes extensive knowledge of the operations, supply chain, distribution and customer service functions in manufacturing companies and of the design and implementation of manufacturing, supply chain and customer service strategies, improvements and efficiencies.



		Kim K.W. Rucker, 51, has served as a director of our Company since 2015. She is a member of the Board Governance Committee and the Compensation and Human Resources Committee. Ms. Rucker has served as Executive Vice President, General Counsel and Secretary at Andeavor (formerly Tesoro Corporation) and Executive Vice President and General Counsel for Andeavor Logistics LP (formerly Tesoro Logistics GP, LLC) since March 2016. Previously, she was Executive Vice President, Corporate & Legal Affairs, General Counsel and Corporate Secretary at Kraft Foods Group, Inc., a global manufacturer and distributor of food products and beverages until July 2015. Prior to joining Kraft in 2012, Ms. Rucker served as the Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer at Avon Products, Inc., a global manufacturer of beauty and related products, since 2008. Before joining Avon, Ms. Rucker was Senior Vice President, Corporate Secretary and Chief Governance Officer for Energy Future Holdings, Corp., an energy company, since 2004. She began her legal career at Sidley Austin LLP in its Chicago, Illinois office. Ms. Rucker has a B.B.A. in Economics from the University of Iowa, a J.D. from Harvard Law School and a Master in Public Policy from the John F. Kennedy School of Government at Harvard University. Ms. Rucker contributes a broad knowledge of law, corporate governance, internal and external communications, community involvement activities and government affairs in her service as a director.


(1)	Represents fees billed for the audit of our financial statements included in our Annual Report on Form 10-K and review of financial statements included in our Quarterly Reports on Form 10-Q, the audit of our internal control over financial reporting, and for services that are provided by KPMG LLP in connection with statutory regulatory filings or engagements.


(2)	Represents fees billed for assurance and consultative related services. Such services in 2015 consisted primarily of providing an English translation of a Lennox foreign subsidiary’s year-end Financial Statements. Such services in 2014 consisted primarily of assistance with tagging Lennox UK Financial Statements into XBRL.


(3)	Represents fees billed for tax compliance, including review of tax returns, tax advice, and tax planning.



~~Paul W. Schmidt~~Gregory T. Swienton (Chairperson)				Janet K. Cooper
~~C. L. (Jerry) Henry~~ Max H. Mitchell				~~Kim K.W. Rucker~~
~~Gregory T. Swienton~~				Paul W. Schmidt


Name	Title	2015 Annualized Base Salary		Increase Effective April 1, 2016			2016 Annualized Base Salary
Todd M. Bluedorn	Chairman and Chief Executive Officer	$	1,060,000		3.0	%	$	1,092,000
Joseph W. Reitmeier	EVP, Chief Financial Officer		450,000		5.6			475,000
Douglas L. Young	EVP, President and Chief Operating Officer, Residential Heating and Cooling		520,000		3.8			540,000
David W. Moon	EVP, President and Chief Operating Officer, Worldwide Refrigeration		485,000		3.1			500,000
Daniel M. Sessa	EVP, Chief Human Resources Officer		465,000		3.2			480,000


Name	2015 STI Target as a % of Base Salary			2015 STI Target		2015 STI Payout		2015 STI Payout as a % of Target
Mr. Bluedorn		125	%	$	1,315,625	$	1,203,534		91	%
Mr. Reitmeier		70			310,625		266,400		86
Mr. Young		70			360,500		377,768		105
Mr. Moon		70			336,875		267,782		79
Mr. Sessa		70			322,875		295,366		91


	December 2015 Award Value								Number of Awards Granted
Name	PSUs		RSUs		SARs		Total		PSUs(1)		RSUs(1)		SARs(2)		Total
Mr. Bluedorn	$	2,300,000	$	1,380,000	$	920,000	$	4,600,000		16,958		10,175		36,610		63,743
Mr. Reitmeier		500,000		300,000		200,000		1,000,000		3,687		2,212		7,959		13,858
Mr. Young		600,000		360,000		240,000		1,200,000		4,424		2,654		9,550		16,628
Mr. Moon		550,000		330,000		220,000		1,100,000		4,055		2,433		8,754		15,242
Mr. Sessa		500,000		300,000		200,000		1,000,000		3,687		2,212		7,959		13,858


Metric(1)	Weight	Measurement Period	Threshold	Target	Maximum	Actual
Return on Invested Capital (“ROIC”)	50%	3-year weighted average (20% lowest year, 40% other two years)	10%	13%	16%	22.9%
Company Core Net Income	50%	3-year compound annual growth rate	-10%	6%	12%	25.5%
Payout as a % of Target Award			50%	100%	200%	200%


Name	Ownership Requirement as a % of Base Salary	Total Number of Shares and Unvested RSUs	Stock Ownership as % of Base Salary(1)
Mr. Bluedorn	500%	211,343	2,297%
Mr. Reitmeier	300	16,720	428
Mr. Young	300	60,452	1,340
Mr. Moon	300	100,011	2,376
Mr. Sessa	300	34,792	862


(3)	The amounts shown represent all outstanding RSUs held by the NEOs. Refer to column (a) of Table 1 below for the vesting dates of such awards.


Name	Executive Contributions in Last Fiscal Year ($)	Company Contributions in Last Fiscal Year ($)	Aggregate Earnings in Last Fiscal Year ($)		Aggregate Withdrawals/ Distributions ($)	Aggregate Balance at Last Fiscal Year-End ($)
Todd M. Bluedorn	0	0		0	0		67,255
Joseph W. Reitmeier(1)	N/A	N/A		N/A	N/A		N/A
Douglas L. Young	0	0		0	0		343,039
David W. Moon	0	0		0	0		87,946
Daniel M. Sessa	0	0		0	0		16,040