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EXHIBIT 10.16
__________, 1998
(Employee)
(Address)
Dear (Employee):
Lennox International Inc. ("Lennox") recognizes you as a key employee,
important to its future profitability, growth and financial strength.
Accordingly, ▇▇▇▇▇▇ proposes to enter into an agreement with you to establish
certain terms of your employment, including a specified duration or term of
employment, the basis for your compensation and assignments, certain
post-employment covenants, mechanisms to resolve disputes and certain benefits
and income to you in the event you leave the employ of ▇▇▇▇▇▇ under certain
specified circumstances (the "Agreement"). We believe the Agreement benefits
both you and ▇▇▇▇▇▇ by clarifying your employment relationship so that we all
understand its terms. The Agreement provides you with greater certainty and
security with various aspects of your employment relationship, as well as
provides you with information to assist you with future financial planning. In
that same regard, the Agreement assists ▇▇▇▇▇▇ in its own financial and business
planning. The purpose of this letter is to describe the terms of your employment
with ▇▇▇▇▇▇ after the effective date of this Agreement. The term "Employee" will
be used to refer to you in this Agreement where appropriate. The controlling
terms of this Agreement are set forth in the body of this letter Agreement as
well as in the Exhibits to this Agreement which are incorporated by reference.
The specific terms of the Exhibits are controlling should there be any confusion
or conflict between them and this letter. With the signing by both parties of
this Agreement, you and ▇▇▇▇▇▇ will have agreed to the following:
1. Nature of Employment. You and ▇▇▇▇▇▇ have agreed that your employment
relationship with ▇▇▇▇▇▇ will no longer be "at will" and terminable by
either party at any time. Instead, this employment relationship will be
governed by the terms of this Agreement for as long as it remains in
effect and even after its termination for any provisions which by their
terms survive. The terms agreed upon by you and ▇▇▇▇▇▇ provide the
consideration and inducement for each party to enter into this
Agreement and are described more fully throughout the body of this
Agreement and the attached Exhibits A through C.
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2. Term of Agreement; Termination Date. This Agreement will commence on
the date of signing this Agreement by both parties (the "Effective
Date") and will be in effect until December 31 of that year and
thereafter for a series of one-year terms.
3. Termination of Employment. Your employment with ▇▇▇▇▇▇ may be
terminated for a number of reasons prior to the expiration of any term
of this Agreement as described below. The rights of each party under
each circumstance will vary and are described in the attached Exhibits.
More specifically, if ▇▇▇▇▇▇ terminates your employment for any reason
other than for "Cause", as defined in Section B.3 of Exhibit A, you
will be entitled to receive, in addition to any other compensation or
benefits described in Section B.2 of Exhibit A, severance benefits
consisting of either the Normal Severance Payment defined in Section 2
of Exhibit C or the Enhanced Severance Payment defined in Section 3 of
Exhibit C as determined by those provisions. However, the provisions of
Sections C.2(a)-(d) of Exhibit A will continue to be effective after
the termination of this Agreement regardless of the reason for your
termination.
a. Termination by Employee. You may terminate your employment at
any time upon 30 days notice to ▇▇▇▇▇▇ (or a lesser period if
approved by ▇▇▇▇▇▇) of your intent to terminate or not to
renew this Agreement and, in that event, ▇▇▇▇▇▇ shall be
obligated only to pay you your Base Salary and other
applicable benefits provided to employees in your position
that are effective at the time of the voluntary resignation up
to the effective date of the termination only.
b. Termination For Cause. ▇▇▇▇▇▇ may terminate your employment,
at any time, for Cause, as defined in Section B.3 of Exhibit
A, to be effective immediately upon delivery to you of notice
of termination. If ▇▇▇▇▇▇ terminates you for Cause, you are
only entitled to receive your Base Salary and other applicable
benefits provided to employees in your position that are
effective at the time of termination up through the effective
date of termination.
c. Termination Other Than For Cause. Your employment may also be
terminated by ▇▇▇▇▇▇ other than for Cause at any time
(including ▇▇▇▇▇▇' non-renewal of the Agreement) but such a
decision triggers certain defined benefits for you. In the
event ▇▇▇▇▇▇ elects to terminate you under this provision,
▇▇▇▇▇▇ agrees to pay either the Normal Severance Payment as
defined in Section 2 of Exhibit C or the Enhanced Severance
Payment as defined in Section 3 of Exhibit C, provided you
comply with all requirements described in Section 3 of Exhibit
C. These benefits are contractually defined by this Agreement
and are not dependent on the other benefits policies of ▇▇▇▇▇▇
at the time of your termination.
d. Termination As A Result Of Disability Or Death. Should you die
or become permanently disabled (completely unable to perform
your duties as defined in the
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benefit plans of ▇▇▇▇▇▇) during the term of this Agreement,
your employment will be terminated effective as of the date of
your death or permanent disability.
e. Withholdings From Payment/Offset. Any payments made by ▇▇▇▇▇▇
to you under Section 3 will be subject to all applicable
local, state, federal or foreign taxes, including, without
limitation, income tax, withholding tax, and social security
tax. Further, to the extent you have, on the date of
termination, any outstanding debts or financial obligations to
▇▇▇▇▇▇, including, but not limited to, loans, overpayment of
wages, bonuses or other forms of incentive payments,
unauthorized travel or purchasing expenses, or theft of
Lennox' funds or property, you agree that ▇▇▇▇▇▇ shall be
entitled to set off against and withhold from such payments
due you for such debts or obligations.
4. Nonpayment Upon Breach. Notwithstanding anything in this Agreement to
the contrary, at any time after the date of termination, if you, by any
intentional or grossly negligent action or omission to act, breach any
covenant, agreement, condition or obligation contained herein, ▇▇▇▇▇▇
is entitled to cease making any payments and to cease providing any of
the benefits to you under this Agreement. Additionally, ▇▇▇▇▇▇ reserves
the right to seek repayment of any amounts previously paid hereunder
along with recovery of any other damages caused by you.
5. Resolution of Disputes. In the event that any employment dispute as
defined in Section A of Exhibit B arises between ▇▇▇▇▇▇ and any
Employee, the parties involved will make all efforts to resolve any
such dispute through informal means. If these informal attempts at
resolution fail, ▇▇▇▇▇▇ and the Employee agree to and shall submit the
dispute to final and binding arbitration pursuant to the policy and
terms outlined in Exhibit B, to which the parties expressly agree to be
bound. The parties fully and completely understand and agree that
arbitration is the exclusive forum for all such arbitrable disputes and
that the parties are giving up all rights to a court trial or jury
trial; however, the parties, by agreeing to the policy for resolution
of disputes outlined in Exhibit B are not waiving any substantive
rights or remedies to which they would otherwise be entitled.
6. Waiver, Modification, and Integration. The waiver by any party hereto
of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach by any party. This
Agreement, which includes all Exhibits referenced or attached,
expresses the entire agreement of the parties concerning matters
contained herein and supersedes all prior and contemporaneous
representations, understandings and agreement, either oral or in
writing, between the parties hereto with respect to such matters and
all such prior or contemporaneous representations, understandings and
agreements, both oral and written, are hereby terminated. This
Agreement may not be modified, altered or amended except by written
agreement of the Employee and the Chief Executive Officer, except when
the Chief Executive Officer is involved, and in that event, an official
designated by the Board of Directors for ▇▇▇▇▇▇.
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7. Binding Effect. This Agreement shall be binding and effective upon
▇▇▇▇▇▇ and its successors and permitted assigns, and upon the Employee,
Employee's heirs and representatives. The Employee hereby represents
and warrants to Lennox that Employee has not previously assumed any
obligations inconsistent with those contained in this Agreement,
including, but not limited to, covenants not to compete with another
person, firm, corporation or other entity.
8. Governing Law, Venue and Personal Jurisdiction. It is the intention of
the parties that the laws of the State of Texas should govern the
validity of this Agreement, the construction of its terms, and the
interpretation of the rights and duties of the parties hereto. The
parties agree that venue for all disputes shall be in Dallas County,
Texas. The parties further agree to submit to personal jurisdiction in
Dallas County, Texas.
Sincerely,
LENNOX INTERNATIONAL INC.
By:
------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
ACCEPTED AND AGREED this ______ day of _______________, 1998.
EMPLOYEE
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Signature
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Printed Name
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EXHIBIT A
TERMS OF EMPLOYMENT
The following are the specific agreements of Lennox and the Employee providing
the details and basis for this Agreement and are intended by each as its
consideration to induce the other party to enter into this Agreement. Each party
agrees that the consideration provided by the other is adequate for its
agreements to the following terms:
▇. ▇▇▇▇▇▇▇. On January 1 of each year (the "Anniversary Date") after the
end of the first term and for each year thereafter, this Agreement will
be automatically renewed for an additional year, unless either party
notifies the other, in writing, at least 30 days prior to the
Anniversary Date, that it does not wish to renew the Agreement. No
reason need be given by either party for the non-renewal of the
Agreement. If ▇▇▇▇▇▇ elects not to renew, however, Employee is
nevertheless entitled to the benefits provided in this Agreement,
subject to all of its provisions. If Employee elects not to renew,
Employee will receive only those benefits provided upon voluntary
termination as described in Section 3(a) of the letter agreement.
B. Agreements by ▇▇▇▇▇▇.
1. Employee Duties. ▇▇▇▇▇▇ will assign to the Employee such
duties and responsibilities that would appropriately be
performed by an employee holding Employee's position and/or
job title on a permanent basis as it deems consistent with the
Employee's qualifications and experience provided, however,
that ▇▇▇▇▇▇ can assign other duties on a temporary basis.
▇▇▇▇▇▇ retains the right to change such duties and to change
the location of the Employee's assignment as and when it deems
appropriate.
2. Employee Compensation. Employee shall receive an annual salary
of that amount in effect at the initial effective or
subsequent renewal dates of this Agreement (as may be, from
time to time, adjusted in accordance with ▇▇▇▇▇▇' applicable
salary policies which may be changed by ▇▇▇▇▇▇ in its sole
discretion), payable in accordance with the then applicable
payroll policies and subject to all required and authorized
withholdings and deductions ("Base Salary"). The Base Salary
will be set in accordance with ▇▇▇▇▇▇' policy regarding
salaries and will not be reduced during the annual term of the
Agreement unless Employee's job duties are changed, in which
circumstance ▇▇▇▇▇▇ reserves the right to lessen Employee's
compensation by no more than ten percent for the remainder of
the year without such change amounting to a breach or
termination of this Agreement. Employee is also entitled to
such short term bonuses, stock options, long-term incentive
program payments and fringe benefits as are applicable to
employees in your position pursuant to Lennox'
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then applicable policies and plans. Benefits may be subject to
periodic review and may be changed by ▇▇▇▇▇▇ in its sole
discretion.
3. Termination for Cause Defined. ▇▇▇▇▇▇ may terminate Employee's
employment, at any time, for Cause as set forth in Section
3(b) of the body of the Letter Agreement. "Cause" is defined
as (a) any violation by an Employee of ▇▇▇▇▇▇' written
policies as they may exist or be created or modified from time
to time in the future, including, as examples and not as a
limitation of the policies to which an Employee may be
subject, those policies prohibiting discrimination in the
workplace, including the prohibition of harassment, on the
ground of race, sex, religion, age or any other prohibited
basis; (b) any state or federal criminal conviction,
including, but not limited to, entry of a plea of nolo
contendere or deferred adjudication upon a felony or
misdemeanor charge; (c) the commission by Employee of any
material act of misconduct or dishonesty; (d) any intentional
or grossly negligent action or omission to act which breaches
any covenant, agreement, condition or obligation contained in
this Agreement; or (e) acts that in any way have a direct,
substantial and adverse effect on ▇▇▇▇▇▇' reputation.
▇▇▇▇▇▇' termination for Cause determination is subject to the
Employee's rights to a resolution of a dispute of that
determination as provided in Exhibit B of this Agreement.
4. Payments Upon Disability or Death. In the event Employee dies
or becomes permanently disabled during the term of the
Agreement, Employee or Employee's designated beneficiaries
will be entitled to the payments described in Section 3(c) of
the Agreement, together with any other benefits provided to
employees in an equivalent position in effect at that time.
Should Employee die during the severance period, all payments
of severance amounts shall cease upon the later of Employee's
death or the expiration of the twenty-fourth month after the
date of Employee's termination in the event the employee has
agreed to the terms of the enhanced severance benefit. Any
payments after Employee's death that may be due hereunder will
be paid to Employee's beneficiary named in connection with
Exhibit D of this Agreement, or if no such designation has
been made by Employee, then to Employee's executors,
administrators, heirs, personal representatives, successors,
or assigns, as the case may be.
C. Agreements by Employee.
1. Effort and Cooperation. Employee agrees to devote his or her
full efforts and time to the performance of this Agreement and
shall not, without the prior written consent of the Chief
Executive Officer, or in the event the Chief Executive Officer
is involved, a designee assigned by the Board of Directors,
engage in any other employment, business or other activity
that would materially interfere with the
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performance of his or her duties under this Agreement.
Employee further agrees that following his or her termination
from employment, Employee will provide reasonable cooperation
with and assistance to ▇▇▇▇▇▇ in all respects, including, but
not limited to, the transition of his or her duties and
responsibilities, cooperation on any project for a reasonable
period not to exceed six months, or litigation involving
▇▇▇▇▇▇. ▇▇▇▇▇▇ will reimburse the Employee any reasonable
expenses incurred.
2. Protective Covenants. Employee recognizes that Employee's
employment by ▇▇▇▇▇▇ is one of the highest trust and
confidence. In return for the Employee's agreement to the
protective covenants herein, ▇▇▇▇▇▇ agrees that the (i)
Employee will become fully familiar with many aspects of
▇▇▇▇▇▇' business, including future changes customarily related
to the performance of the duties of Employees's position
during the term of the Agreement, (ii) Employee will be given
access to proprietary confidential information of Lennox or
its customers and other information which is of special and
peculiar commercial or competitive value to Lennox or its
customers for use in connection with ▇▇▇▇▇▇' business, which
proprietary confidential information is for the sole and
exclusive benefit of ▇▇▇▇▇▇, (iii) Employee will be given all
specialized training necessary to perform his or her assigned
duties, and (iv) Employee will be provided with ▇▇▇▇▇▇'
goodwill in dealing with customers, vendors and potential
business contacts.
Employee acknowledges and agrees that if any such proprietary
and confidential information of either ▇▇▇▇▇▇ or its customers
were to become known by any persons outside of Lennox with a
need to have such information, hardship, loss or irreparable
injury and damage could result to ▇▇▇▇▇▇ or its customers
which would be difficult if not impossible to measure.
Therefore, Employee agrees that (i) it is necessary for ▇▇▇▇▇▇
to protect its business and that of its customers from such
damage, (ii) that the information is of a confidential nature,
(iii) that the following covenants constitute a reasonable and
appropriate means, consistent with the best interests of both
Employee and ▇▇▇▇▇▇, to protect ▇▇▇▇▇▇ and its customers
against such damage and to protect the value of their
confidential proprietary information, (iv) that the following
covenants are agreed to as a term and condition of Employee's
continued employment with ▇▇▇▇▇▇ and are supported by adequate
consideration from Lennox, and (v) shall apply to and be
binding upon Employee as provided herein:
a. Trade Secrets, Proprietary and Confidential
Information. Employee will have access to, and
contact with certain trade secrets and confidential
and proprietary information of ▇▇▇▇▇▇, including,
without limitation, unique skills, concepts, sales
presentations, marketing programs, marketing
strategy, business practices, methods of operation,
systems, sales methods, proposals, customer lists,
customer leads, documents identifying past, present
and future customers, hiring and training methods,
financial and other customer data,
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lists of agents, and other confidential information
("Trade Secrets"). Employee agrees to protect and
safeguard the Trade Secrets, business practices, and
confidential and proprietary information of ▇▇▇▇▇▇.
Employee further agrees and covenants that, except as
may be required by ▇▇▇▇▇▇ in connection with this
Agreement, or with the prior written consent of
▇▇▇▇▇▇, Employee shall not, either during his or her
employment with ▇▇▇▇▇▇ or thereafter, directly or
indirectly, use for Employee's own benefit or for the
benefit of another, disclose, disseminate, or
distribute to another, any Trade Secret, business
practice, or confidential or proprietary information
(whether or not acquired, learned, obtained, or
developed by Employee alone or in conjunction with
others) of ▇▇▇▇▇▇ or of others with whom ▇▇▇▇▇▇ has a
business relationship. Such Trade Secrets, business
practices, and confidential and proprietary
information include, but are not limited to, ▇▇▇▇▇▇'
patents, trademarks, licenses and technical
information concerning its operations, data bases,
Lennox' sales information and marketing strategy, the
identities of ▇▇▇▇▇▇' customers, contractors,
suppliers, and others with whom ▇▇▇▇▇▇ has a business
relationship, ▇▇▇▇▇▇ arrangements with such parties,
▇▇▇▇▇▇' customer list and ▇▇▇▇▇▇' pricing policies
and strategy. All memoranda, notes, records,
drawings, documents, or other writings whatsoever
made, compiled, acquired, or received by Employee
during the term of Employee's employment with ▇▇▇▇▇▇,
arising out of, in connection with, or related to any
activity or business of ▇▇▇▇▇▇, including, but not
limited to, ▇▇▇▇▇▇' customers, contractors,
suppliers, or others with whom ▇▇▇▇▇▇ has a business
relationship, ▇▇▇▇▇▇' arrangements with such parties,
and ▇▇▇▇▇▇' pricing policies and strategy, are, and
shall continue to be, the sole and exclusive property
of ▇▇▇▇▇▇, and shall, together with all copies
thereof and all advertising literature, be returned
and delivered to Lennox by Employee immediately,
without demand, upon the termination of the
Employee's employment with ▇▇▇▇▇▇ or shall be
returned at any time upon ▇▇▇▇▇▇ demand.
b. Restrictions on Diverting Employees of ▇▇▇▇▇▇.
Employee agrees that during employment with ▇▇▇▇▇▇,
and for a period of 24 complete calendar months
following the termination of employment, Employee
will not, either directly or indirectly, call on,
solicit, induce or attempt to induce any of the
employees or officers of ▇▇▇▇▇▇ that Employee had
knowledge of or association with during Employee's
employment with ▇▇▇▇▇▇ to terminate their association
with ▇▇▇▇▇▇ either personally or through the efforts
of his or her subordinates.
c. Restrictions on Diverting Vendors or Contractors.
Employee agrees that during his or her employment
with ▇▇▇▇▇▇, and for a period of 24 complete calendar
months following his or her termination of
employment, Employee
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will not, either directly or indirectly, call on,
solicit, or induce any of ▇▇▇▇▇▇' vendors or
suppliers that Employee had contact with, direct
knowledge of through his or her position with ▇▇▇▇▇▇,
or associated with in the course of employment with
▇▇▇▇▇▇ to terminate their association with ▇▇▇▇▇▇
either personally or through the efforts of his or
her subordinates.
d. Restrictions on Soliciting Customers. For a period of
24 calendar months following the termination of
employment, Employee will not directly or indirectly
call on, service, or solicit competing business or
provide consulting services regarding the same from
customers of Lennox that Employee had (i) direct
contact with or (ii) access to information and files
about as part of Employee's duties with ▇▇▇▇▇▇ within
the previous 24 months. This restriction is limited,
by geography, to the specific places, addresses, or
locations where a covered customer is present and
available for solicitation or servicing.
A competing business is defined as a business that is
the same or so substantially similar in nature to
▇▇▇▇▇▇ so as to have the possibility to affect or
usurp ▇▇▇▇▇▇' business opportunities.
e. Remedies. In the event of breach or threatened breach
by Employee of any provision of Paragraph C.2 hereof,
▇▇▇▇▇▇ shall be entitled to (i) cease any payments
under this Agreement as set forth in Section 4 of the
body of the Agreement, (ii) relief by temporary
restraining order, temporary injunction, and/or
permanent injunction, (iii) recovery of all attorneys
fees and costs incurred by ▇▇▇▇▇▇ in obtaining such
relief, and (iv) any other legal and equitable relief
to which it may be entitled, including any and all
monetary damages. ▇▇▇▇▇▇ has the right to pursue
partial enforcement and/or to seek declaratory relief
regarding the enforceable scope of this Agreement
without penalty and without waiving ▇▇▇▇▇▇' right to
pursue any other available remedy.
f. Survival of Covenants. Each covenant of Employee set
forth in Paragraph C.2 shall survive the termination
of Employee's employment. The existence of any claim
or cause of action by Employee against ▇▇▇▇▇▇,
whether related to this Agreement or otherwise, shall
not constitute a defense to the enforcement of the
covenants in Paragraph C.2. In the event an
enforcement remedy is necessary under Paragraph C.2,
the restricted time periods provided for in Paragraph
C.2 shall commence on the date enforcement is ordered
and complied with by Employee and shall be extended
by the period of noncompliance.
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g. Acknowledgment of Ancillary Agreements and
Consideration. Employee acknowledges that his or her
agreement to be bound by the protective covenants set
forth in Paragraph C.2 is the inducement for ▇▇▇▇▇▇
(i) to enter into the other terms of this Agreement
(ii) to modify existing employment agreements or
other contracts, if any, affected by this Agreement,
(iii) to initiate or continue the employment of
Employee pursuant to the terms of this Agreement,
(iv) to provide Employee with initial or continued
use or access to confidential proprietary information
of ▇▇▇▇▇▇, and (v) to provide the Employee with
unique and specialized training regarding ▇▇▇▇▇▇'
Trade Secrets, business practices and marketing
strategy, to provide use of goodwill as a
representative of ▇▇▇▇▇▇ and to ensure business
expertise in developing relations with third parties.
Employee agrees that each agreement set forth in this
Agreement is otherwise enforceable and independently
sufficient to support all the protective covenants in
Paragraph C.2.
D. Severability. If any provision contained in this Agreement is
determined to be void, illegal or unenforceable, in whole or in part,
then it will be treated as though it never was contained herein and all
other provisions shall remain in full force and effect.
E. Notices. All communications required or allowed under this Agreement
shall be in writing and shall be deemed to have been delivered on the
date personally delivered or on the date deposited in the United States
Postal Service, postage prepaid, by certified mail, return receipt
requested, addressed to you at the address provided above and to Lennox
at:
Lennox International Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
Richardson, Texas 75080-2254
Attn: General Counsel
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EXHIBIT B
POLICY FOR RESOLUTION OF DISPUTES
A. Agreement to Arbitrate.
1. Arbitrable Disputes. This Policy covers any legal dispute
between the parties, as set forth below, except for ▇▇▇▇▇▇'▇
right to seek enforcement of Employee's protective covenants
set forth in Paragraph C.2 of Exhibit A or Employee's claims
related to workers compensation and/or unemployment insurance.
The disputes subject to this policy are all those disputes
between the parties arising from any breach or alleged breach
of this Agreement or as to Employee's termination or as to any
allegation by the Employee that ▇▇▇▇▇▇ has violated any of the
Employee's rights under state or federal employment or civil
rights laws, or any other laws, statutes or constitutional
provisions, including, but not limited to, the following:
unlawful discrimination or harassment; claims based on any
purported breach of contractual obligations; claims based on
any purported breach of duty arising in tort, including
violations of public policy; as well as any actions recognized
under common law or the combination of any of these claims;
and any claims against supervisors or agents of ▇▇▇▇▇▇ for
which the supervisors or agents were acting in the course and
scope of their employment or making any decisions or comments
related to or connected with employment, even if the
supervisor or agent was not acting within the course and scope
of employment, shall be resolved in accordance with the
provisions of this Policy for Resolution of Disputes as set
forth herein. All arbitrable disputes are subject to
applicable statutes of limitations and other affirmative
defenses recognized by law. Employee or ▇▇▇▇▇▇ may seek a
court order to enforce or compel arbitration pursuant to the
terms of this Policy.
2. Acceptance of Policy. By accepting or continuing employment
with ▇▇▇▇▇▇, for the provision of a term of employment
provided by ▇▇▇▇▇▇, for Lennox' agreement to pay a severance
package, and for Lennox' agreement to provide Employee access
to confidential information, Employee and ▇▇▇▇▇▇ agree that
arbitration is the exclusive remedy for all arbitrable
disputes.
3. Governing Law/Waiver of Rights. THIS POLICY AND AGREEMENT TO
ARBITRATE IS MADE PURSUANT TO THE FEDERAL ARBITRATION ACT AND
APPLICABLE STATE LAWS REGARDING ARBITRATION AND IS A FULL AND
COMPLETE WAIVER OF THE PARTIES' RIGHTS TO A CIVIL COURT ACTION
AND RIGHTS TO A TRIAL BY JURY.
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B. Request for Arbitration.
1. Attempt at Informal Resolution of Disputes.
a. Prior to submission of any dispute to arbitration,
▇▇▇▇▇▇ and the Employee shall attempt to resolve the
dispute informally as set forth below.
▇. ▇▇▇▇▇▇ and the Employee will select a mutually
acceptable mediator from a list provided by an
American Arbitration Association Employment Dispute
Division or other similar agency who will assist the
parties in attempting to reach a settlement of the
dispute. The mediator may make settlement suggestions
to the parties but shall not have the power to impose
a settlement upon them. If the dispute is resolved in
mediation, the matter shall be deemed closed. If the
dispute is not resolved in mediation and goes to the
next step (binding arbitration), any proposals or
compromises suggested by either of the parties or the
mediator shall not be referred to or have any bearing
on the arbitration procedure. The mediator cannot
also serve as the arbitrator in the subsequent
proceeding unless all parties expressly agree in
writing.
2. Arbitration Procedures. The Employee or his/her representative
must submit a "Request for Arbitration" in writing to the
Chief Executive Officer of ▇▇▇▇▇▇ within the greater of 300
days or the applicable statute of limitation that would apply
if the claim had been brought in court of (i) the termination
of employment (including resignation), (ii) the incident
giving rise to the dispute or claim, or (iii) in the case of
unlawful discrimination, including sexual or other unlawful
harassment, the alleged conduct. This time limitation will not
be extended for any reason and shall not be subject to
tolling, equitable or otherwise. If the "Request for
Arbitration" is not submitted in accordance with the
aforementioned time limitations, the Employee will not be able
to bring his/her claim to this or any other forum. The
Employee can obtain a "Request for Arbitration" form from the
Human Resource Department of Lennox International Inc. or
other party designated by the Chief Executive Officer.
Alternatively, the Employee can create his/her own "Request
for Arbitration" form, as long as it clearly states "Request
for Arbitration" at the beginning of the first page. The
"Request for Arbitration" must include the following
information:
a. A factual description of the dispute in sufficient
detail to advise ▇▇▇▇▇▇ of the nature of the dispute;
b. The date when the dispute first arose;
c. The names, work locations, telephone numbers of any
co-workers or supervisors with knowledge of the
dispute; and
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d. The relief requested by the Employee.
▇▇▇▇▇▇ will respond in a timely manner to this "Request for
Arbitration," so that the parties can begin the process of
selecting an arbitrator. Such response may include any
counterclaims that ▇▇▇▇▇▇ chooses to bring against the
Employee.
3. Selection of the Arbitrator. All disputes will be resolved by
a single arbitrator. The arbitrator will be mutually selected
by ▇▇▇▇▇▇ and the Employee. If the parties cannot agree on an
arbitrator, then a list of seven arbitrators, experienced in
employment matters, shall be provided by the American
Arbitration Association. The arbitrator will be selected by
the parties who will alternately strike names from the list.
The last name remaining on the list will be the arbitrator
selected to resolve the dispute. Upon selection, the
arbitrator shall set an appropriate time, date, and place for
the arbitration, after conferring with the parties to the
dispute.
4. Arbitrator's Authority. The arbitrator shall have the powers
enumerated below:
a. Ruling on motions regarding discovery, and ruling on
procedural and evidentiary issues arising during the
arbitration;
b. Issuing protective orders on the motion of any party
or third party witness (such protective orders may
include, but not be limited to, sealing the record of
the arbitration, in whole or in part (including
discovery proceedings and motions, transcripts, and
the decision and award), to protect the privacy or
other constitutional or statutory rights of parties
and/or witnesses);
c. Determining only the issue(s) submitted to him/her
(the issue(s) must be identified in the "Request for
Arbitration" or counterclaims, and any issue(s) not
so identified in those documents shall be deemed to
be and is/are outside the scope of the arbitrator's
jurisdiction, and any award involving those issue(s)
shall be subject to a motion to vacate);
d. Shall have no authority to violate state or federal
law; and
e. Issuing written opinions on the issues raised in the
Arbitration.
5. Pleadings.
a. A copy of the "Request for Arbitration" shall be
forwarded to the arbitrator within five calendar days
of his/her selection.
b. Within 10 calendar days following submission of the
"Request for Arbitration" to the arbitrator, ▇▇▇▇▇▇
shall respond in writing to the "Request
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for Arbitration" to the arbitrator, ▇▇▇▇▇▇ shall
respond in writing to the "Request for Arbitration"
by answer and/or demurrer. The answer or demurrer
shall be served on the arbitrator and the Employee.
c. The answer to the "Request for Arbitration" shall
include the following information:
(1) a response, by admission or denial, to each
claim set forth in the "Request for
Arbitration";
(2) all affirmative defenses asserted by ▇▇▇▇▇▇
to each claim; and
(3) all counterclaims ▇▇▇▇▇▇ asserts against the
Employee and any related third party claims.
d. If ▇▇▇▇▇▇ contends that some or all of the Employee's
claims set forth in the "Request for Arbitration" are
barred as a matter of law, it may respond by demurrer
setting forth the legal authorities in support of its
position. If ▇▇▇▇▇▇ ▇▇▇▇▇▇ to less than the entire
"Request for Arbitration," ▇▇▇▇▇▇ must answer those
claims to which it does not demur at the same time
that it submits its demurrer.
e. The Employee shall have 20 calendar days to oppose
▇▇▇▇▇▇' demurrer. Any opposition must be in writing
and served on the arbitrator and ▇▇▇▇▇▇.
f. If the answer alleges a counterclaim, within 20 days
of service of the answer, the Employee shall answer
and/or demur to the counterclaim in writing and serve
the answer and/or demurrer on the arbitrator and
▇▇▇▇▇▇. If the Employee demurs to any counterclaim,
▇▇▇▇▇▇ shall have 20 calendar days from its receipt
of the demurrer to submit a written opposition to the
demurrer to the Employee and the arbitrator.
g. The arbitrator shall rule on demurrer(s) to any
claims and/or counterclaims within 15 calendar days
of service of the moving and opposition papers.
h. If any demurrer is overruled, the moving party must
answer those claims to which it demurred within five
calendar days of the receipt of the arbitrator's
ruling. The answer must be served on the arbitrator
and the opposing party.
i. When all claims and counterclaims have been answered,
the arbitrator shall set a time and place for hearing
which shall be no earlier than three months from the
day on which the parties are notified of the date of
hearing and no
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later than 12 months from the date on which the
arbitrator sets the date for the hearing.
6. Discovery. The discovery process shall proceed and be governed
as follows:
a. Parties may obtain discovery by any of the following
methods:
(1) depositions upon oral examination, one per
side as of right, with more permitted if
leave is obtained from the arbitrator;
(2) written interrogatories, up to a maximum
combined total of 20, with the responding
party having 20 days to respond;
(3) request for production of documents or
things or permission to enter upon land or
other property for inspection, with the
responding party having 20 days to produce
the documents and allow entry or to file
objections to the request; and
(4) physical and mental examination, in
accordance with the Federal Rules of Civil
Procedure, Rule 35(a).
b. Any motion to compel production, answers to
interrogatories or entry onto land or property must
be made to the arbitrator within 15 days of receipt
of objections.
c. All discovery requests shall be submitted no less
than 60 days before the hearing date.
d. The scope of discoverable evidence shall be in
accordance with Federal Rule of Civil Procedure
26(b)(1).
e. The arbitrator shall have the power to enforce the
aforementioned discovery rights and obligations by
the imposition of the same terms, conditions,
consequences, liabilities, sanctions, and penalties
as can or may be imposed in like circumstances in a
civil action by a federal court under the Federal
Rules of Civil Procedure, except the power to order
the arrest or imprisonment of a person.
7. Hearing Procedure. The hearing shall proceed according to the
American Arbitration Association's Rules with the following
amendments:
a. The arbitrator shall rule at the outset of the
arbitration on procedural issues that bear on whether
the arbitration is allowed to proceed.
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b. Each party has the burden of proving each element of
its claim or counterclaims, and each party has the
burden of proving any of its affirmative defenses.
c. In addition to, or in lieu of, closing arguments,
either party shall have the right to present
post-hearing briefs, and the due date for exchanging
post- hearing briefs shall be mutually agreed on by
the parties and the arbitrator.
8. Substantive Law. The applicable substantive law shall be the
law of the State of Texas or federal law. If both federal and
state law speak to a cause of action, the Employee shall have
the right to elect his/her choice of law. However, choice of
law in no way affects the procedural aspects of the
arbitration, which are exclusively governed by the provisions
of this Policy.
9. Opinion and Award. The arbitrator shall issue a written
opinion and award, in conformance with the following
requirements:
a. The opinion and award must be signed and dated by the
arbitrator.
b. The arbitrator's opinion and award shall decide all
issues submitted.
c. The arbitrator's opinion and award shall set forth
the legal principles supporting each part of the
opinion.
d. The arbitrator shall have the same authority to award
remedies and damages as provided to a judge and/or
jury under parallel circumstances.
10. Enforcement of Arbitrator's Award. Following the issuance of
the arbitrator's decision, any party may petition a court to
confirm, enforce, correct or vacate the arbitrator's opinion
and award under the Federal Arbitration Act, and/or applicable
state law.
11. Fees and Costs. Fees and costs shall be allocated in the
following manner:
a. Each party shall be responsible for its own
attorneys' fees, except as provided by law.
b. The Employee will pay a $150 filing fee to be paid to
the arbitration agency. ▇▇▇▇▇▇ will bear the
remainder of the arbitrator's fees and any costs
associated with the facilities for the arbitration.
▇. ▇▇▇▇▇▇ and the Employee shall each bear an equal
one-half of any court reporters' fees, assuming both
parties want a transcript of the proceeding. If
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one party elects not to receive a transcript of the
proceedings, the other party will bear all of the
court reporters' fee. However, such an election must
be made when the arrangements for the court reporter
are being made.
d. Each party shall be responsible for its costs
associated with discovery.
C. Severability. In the event that any provision of this Policy is
determined by a court of competent jurisdiction to be illegal, invalid,
or unenforceable to any extent, such term or provision shall be
enforced to the extent permissible under the law and all remaining
terms and provisions of this Policy shall continue in full force and
effect.
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EXHIBIT C
SEVERANCE TERMS
1. Effect of Protective Covenants. The provisions of Paragraphs C2(a)-(d)
of Exhibit A of this Agreement will continue in full force and effect
regardless of whether Employee continues to be employed by ▇▇▇▇▇▇ and
regardless of the reason Employee's employment is terminated and
regardless of the severance compensation to which Employee is entitled
as set forth below, if any.
2. Normal Severance Compensation. Should Employee be terminated by ▇▇▇▇▇▇
prior to the expiration of the term specified in Section 2 of the body
of the Agreement or the Agreement is not renewed by ▇▇▇▇▇▇ for any
reason other than for Cause as defined in Section B.3 of Exhibit A, and
provided the Employee does not qualify for the Enhanced Severance
Payment described in Section 3 of Exhibit C set forth below, Employee
will be entitled to receive monthly payments of the greater of the
Employee's Base Salary for the remainder of the Agreement's term or
three months of Employee's Base Salary in addition to any other
compensation or benefits applicable to an employee at Employee's level.
3. Enhanced Severance Benefits. If ▇▇▇▇▇▇ terminates an Employee other
than for Cause (including ▇▇▇▇▇▇' non-renewal of the Agreement) and
that Employee accepts and meets the conditions of this Paragraph 3 of
Exhibit C, ▇▇▇▇▇▇ agrees to pay an Enhanced Severance Payment and
provide the other benefits described below ("Enhanced Severance
Benefits"). The Employee must agree to execute a written General
Release of any and all possible claims against ▇▇▇▇▇▇ existing at the
time of termination in exchange for which ▇▇▇▇▇▇ agrees to the
following severance provisions:
(i) Severance Payment. ▇▇▇▇▇▇ agrees to pay Employee's Base Salary
for a period of 24 months following the date of termination.
The severance payments will be paid in installments in
accordance with the regular payroll policies of ▇▇▇▇▇▇ then in
effect and each installment will be subject to regular payroll
deductions and all applicable taxes.
(ii) Perquisites. Within 45 days following the date of termination,
the Employee will receive in addition to (i) above, in a lump
sum, a payment of $12,000 in lieu of the continuation of or
payment for any perquisites, including, without limitation,
automobile, club membership, tax preparation, physical
examination or others being received by the Employee at the
time of termination.
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(iii) COBRA Continuation. ▇▇▇▇▇▇ agrees to pay COBRA premiums to
allow Employee to continue to participate in Lennox group
health plan on the same terms as other Lennox employees for up
to 18 months while Employee is unemployed and not eligible for
other group health insurance coverage. Should Employee remain
unemployed at the end of 18 months, the equivalent of the
COBRA premium will be paid to the employee on a month-to-month
basis for up to six additional months for his or her use in
obtaining health insurance coverage outside the group health
plan.
(iv) Outplacement. ▇▇▇▇▇▇ agrees to provide Employee with
outplacement services in accordance with ▇▇▇▇▇▇' then
applicable policy. In lieu of such outplacement services,
▇▇▇▇▇▇ agrees to pay Employee a lump sum payment of 10% of
Employee's annual Base Salary within 45 days following the
date of termination should Employee elect not to receive
outplacement services.
(v) Death Benefit. Employee's beneficiary, as set forth in Exhibit
D, will receive, in a lump sum, a death benefit equivalent to
six months of Employee's Base Salary in the event that the
Employee should die during the period in which the Employee is
entitled to any severance payment described above.
Nothing herein shall be construed to limit Employee's right to receive
any benefits and entitlements under ▇▇▇▇▇▇' ERISA or other employee
benefit plans, with all such benefits being received by the Employee
only to the extent allowed by and subject to the terms of any such plan
as it may from time to time exist or be modified. Further, this
Agreement is not intended and the parties agree that it will not be
interpreted as creating any obligation for ▇▇▇▇▇▇ to create or maintain
any employee benefit, compensation, perquisite or other plan, policy or
program for its employees and ▇▇▇▇▇▇ retains the sole discretion to
eliminate or modify any existing plan, program or policy as it deems to
be appropriate.
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EXHIBIT D
DESIGNATION OF BENEFICIARY
The following represent the designation of Beneficiary for the Employee named
below:
EMPLOYEE:
-------------------------------
PRIMARY BENEFICIARY(S):
--------------------- ------------------------ ---------%*
Name Relationship Percent
--------------------- ------------------------ ---------%*
Name Relationship Percent
*The total should add to 100%
CONTINGENT BENEFICIARY(S):
--------------------- ------------------------ ---------%*
Name Relationship Percent
--------------------- ------------------------ ---------%*
Name Relationship Percent
*The total should add to 100%
This is to confirm the designation of my Beneficiary(s) to receive any benefits
provided under this Agreement which are not otherwise covered by Employee
benefit plans with other designations of beneficiary which I intend to supersede
any designation made above.
EMPLOYEE
------------------------------
Signature
------------------------------
Printed Name
------------------------------
Date
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SCHEDULE A
List of Executive Officers who entered into
Employment Agreements with Lennox International Inc.,
and respective dates of effectiveness
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. February 6, 1998
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ March 23, 1998
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. February 9, 1998
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ February 24, 1998
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ June 2, 1998
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ August 6, 1998
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. February 3, 1998
▇▇▇▇▇ ▇. ▇▇▇▇▇ July 1, 1998
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ 26, 1998