Edgar Filing: LENNOX INTERNATIONAL INC

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

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[ ] Definitive additional materials.

[ ] Soliciting material pursuant to Section 240.14a-12

LENNOX INTERNATIONAL INC.
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[LENNOX INTERNATIONAL LOGO]
2140 LAKE PARK BLVD.
RICHARDSON, TEXAS 75080

April 16, 2003

Dear Stockholders:

It is my pleasure to invite you to the 2003 Annual Meeting of Stockholders
of Lennox International Inc. The meeting will be held at 9:00 a.m., local time,
on Friday, May 16, 2003, at the University of Texas at Dallas Conference Center,
Rutford Avenue and Drive A, Richardson, Texas 75083.

The accompanying Notice of Annual Meeting of Stockholders and Proxy
Statement describe the items of business that will be discussed and voted upon
during the meeting. It is important that you vote your shares whether or not you
plan to attend the meeting. To be sure your vote is counted, we urge you to
carefully review the Proxy Statement and to vote your choices. PLEASE SIGN, DATE
AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE, CALL THE
TOLL-FREE NUMBER OR VOTE BY INTERNET AS SOON AS POSSIBLE. If you attend the
meeting and wish to vote in person, the ballot you submit at the meeting will
supersede your proxy.

I look forward to seeing you at the meeting. On behalf of the management
and directors of Lennox International Inc., I want to thank you for your
continued support and confidence in 2003.

Sincerely,

/s/ John W Norris Jr
John W. Norris, Jr.
Chairman of the Board

[LENNOX INTERNATIONAL LOGO]
2140 LAKE PARK BLVD.
RICHARDSON, TEXAS 75080

APRIL 16, 2003

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 16, 2003

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To Our Stockholders:

Notice is hereby given that the 2003 Annual Meeting of Stockholders of
Lennox International Inc. will be held on May 16, 2003 at 9:00 a.m., local time,
at the University of Texas at Dallas Conference Center, Rutford Avenue and Drive
A, Richardson, Texas 75083 to:

- Elect five Directors to hold office for a three-year term to expire at
the 2006 Annual Meeting;

- Act upon one Stockholder proposal which may be presented at the meeting;
and

- Transact any other business that may properly come before the meeting.

A proxy statement, form of proxy, annual report and Form 10-K for the
fiscal year ended December 31, 2002 accompany this notice.

The Board of Directors has determined that owners of record of Lennox
common stock at the close of business on March 24, 2003 are entitled to notice
of and to vote at the Annual Meeting.

By Order of the Board of Directors,

/s/ Carl E Edwards Jr
Carl E. Edwards, Jr.
Executive Vice President,
Chief Legal Officer and Secretary

YOUR VOTE IS IMPORTANT

TO BE SURE YOUR SHARES ARE REPRESENTED AT THE MEETING, PLEASE (1) CALL THE
TOLL-FREE NUMBER (800) 435-6710 AND FOLLOW THE PROMPTS, OR (2) VOTE BY INTERNET
AT HTTP://WWW.EPROXY.COM/LII, OR (3) COMPLETE, DATE, SIGN AND RETURN YOUR PROXY
CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE. YOU MAY VOTE IN
PERSON AT THE MEETING EVEN IF YOU SEND IN YOUR PROXY CARD, VOTE BY TELEPHONE OR
VOTE BY INTERNET.

TABLE OF CONTENTS

PAGE
----

Voting Procedures........................................... 1
Proposal 1: Election of Directors........................... 1
Proposal 2: Stockholder Proposal on Indexing Executive Stock
Options................................................... 7
Board Organization.......................................... 9
Audit Committee Report...................................... 10
Directors Compensation...................................... 11
Compensation Committee Report on Executive Compensation..... 11
Executive Compensation...................................... 16
Certain Relationships and Related Party Transactions........ 24
Ownership of LII Common Stock............................... 25
Comparison of Total Stockholder Return...................... 27
Additional Information...................................... 28
Appendix A -- Audit Committee Charter....................... A-1

PROXY STATEMENT

VOTING PROCEDURES

This proxy statement and the accompanying proxy card are being mailed to
Stockholders of Lennox International Inc. ("LII" or the "Company") beginning on
or about April 16, 2003 in connection with solicitation of proxies by the LII
Board of Directors for the Annual Meeting of Stockholders to be held on May 16,
2003 at 9:00 a.m., local time, at the University of Texas at Dallas Conference
Center, Rutford Avenue and Drive A, Richardson, Texas 75083, and any
adjournments thereof.

If you sign and return the accompanying proxy, vote by telephone, or vote
by Internet and your proxy is not withdrawn or revoked, your shares will be
voted in accordance with your voting instructions. If you sign and return your
proxy but do not give voting instructions, your shares will be voted for each
proposal as recommended by the Board of Directors.

PROPOSAL 1: ELECTION OF DIRECTORS

The Board of Directors of LII currently consists of 15 people, with no
vacancies. In accordance with the Bylaws, Directors are divided into three
classes, each class to serve a three-year term. At the meeting, five Directors
will be elected to hold office for a three-year term expiring at the 2006 Annual
Meeting of Stockholders. Other Directors will continue in office, in accordance
with their previous election, until the expiration of their classes at the 2004
or 2005 Annual Meeting of Stockholders. One of the incumbent Directors, Mr.
William G. Roth, will not continue as a Director after the Annual Meeting. The
Board of Directors would like to express its sincere appreciation to Mr. Roth
for his dedication and commitment to LII.

Brief biographies for each nominee for Director for the three-year term
expiring at the 2006 Annual Meeting of Stockholders and for each current
Director in the classes continuing in office are shown below.

If you do not wish your shares to be voted for any particular nominee, you
may so indicate on the proxy card. If any of these nominees for Director becomes
unavailable, the persons named in the accompanying proxy may vote for any
alternate designated by the present Board of Directors or the number of
Directors may be reduced.

NOMINEES FOR ELECTION AT THIS MEETING FOR A TERM EXPIRING AT THE 2006 ANNUAL
MEETING:

(Photo of Linda LINDA G. ALVARADO, 51, has served as a Director of LII since 1987. She is
Alvarado) President and Chief Executive Officer of Alvarado Construction, Inc. a
general contracting firm specializing in commercial, government and
industrial construction and environmental remediation projects. She
currently serves on the Boards of Directors of Qwest Communications
International Inc, a telecommunications company, Pepsi Bottling Group, a
soft drink and beverage company, Minnesota Mining and Manufacturing
Company and Pitney Bowes Inc., an office equipment and services company.
Ms. Alvarado is also a partner in the Colorado Rockies Baseball Club.

(Photo of Steven R. STEVEN R. BOOTH, 43, has served as a Director of LII since 2002. He
Booth) became the President of Polytech Molding Inc., a plastic injection
molding company serving the industrial, health care, and automotive
markets, in 2001. From 1994 to 2001, Mr. Booth was employed by Process
Science Inc., a designer and manufacturer of equipment and products using
hydrostatic extrusion technology.

(Photo of David V. DAVID V. BROWN, 55, has served as a Director of LII since 1989. Dr. Brown
Brown) owns the Plantation Farm Camp, a working 500-acre ranch with livestock
that provides learning in a farm setting for children. He is currently
serving on the Strategic Planning Board of the Western Association of
Independent Camps, an educational organization for training camp
directors and owners.

(Photo of John E. JOHN E. MAJOR, 57, has served as a Director of LII since 1993. In 2003,
Major) Mr. Major formed The Technology Solutions Group, which provides
consulting services and of which he serves as President. In 2003, he
stepped down as Chairman and Chief Executive Officer of Novatel Wireless,
Inc., a leading provider of wireless Internet solutions, having served
since 2000. Prior to joining Novatel, he was Chairman, Chief Executive
Officer and President of Wireless Knowledge. Prior to that, he was
Executive Vice President of QUALCOMM and President of its Wireless
Infrastructure Division. Prior to joining QUALCOMM in 1997, Mr. Major
served as Senior Vice President and Chief Technical Officer at Motorola,
Inc., a manufacturer of telecommunications equipment, and Senior Vice
President and General Manager for Motorola's Worldwide Systems Group of
the Land Mobile Products Sector. Mr. Major currently serves on the Boards
of Directors of Novatel Wireless, Inc., Littelfuse, Inc., a manufacturer
of fuses, Verilink Corporation, a manufacturer of network access devices,
and Broadcom Corporation, a semiconductor manufacturing company.

(Photo of Walden W. WALDEN W. O'DELL, 57, serves as Chairman of the Board, President and
O'Dell) Chief Executive Officer of Diebold, Incorporated, the leading global
provider of integrated financial self-service delivery systems and
services. Prior to joining Diebold, Mr. O'Dell held a series of
high-level positions with Emerson, including President of Emerson's Ridge
Tool Division while also serving as Group Vice President of the tool
group of Emerson. He has also served as President of the Liebert
Corporation, a subsidiary of Emerson Electric Co. Mr. O'Dell serves on
the Boards of Directors of Federal Signal Corporation, the Columbus
Association of Performing Arts and the Canton Culture Center for the
Arts, the United Way of Central Stark County and is a member of the Board
of Trustees of the Ohio Foundation of Independent Colleges. He is also a
member of The Ohio State University Advocates and is a lifetime associate
alumni of The Ohio State University.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE NOMINEES.

DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 2004 ANNUAL MEETING:

(Photo of Janet K. JANET K. COOPER, 49, has served as a Director of LII since April 1999. In
Cooper) September 2002, Ms. Cooper was named Senior Vice President and Treasurer
of Qwest Communications International Inc. Prior to that, she was 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, 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
and chairs the Audit Committee of The TORO Company, a manufacturer of
equipment for lawn and turf care maintenance.

(Photo of C.L. (Jerry) C. L. (JERRY) HENRY, 61, was appointed to serve as a Director of LII in
Henry) 2000. Mr. Henry is Chairman and CEO of Johns Manville Corporation, a
leading manufacturer of insulation and building products. Prior to his
current position with Johns Manville, he had served as Executive Vice
President and Chief Financial Officer for E. I. du Pont de Nemours and
Company, a global science and technology company.

(Photo of Robert E. ROBERT E. SCHJERVEN, 60, was named Chief Executive Officer of LII in 2001
Schjerven) and has served as a Director since that time. Prior to his election as
Chief Executive Officer of LII, he served as Chief Operating Officer of
LII in 2000 and as President and Chief Operating Officer of Lennox
Industries Inc., a subsidiary of LII, from 1995 to 2000. He joined LII in
1986 as Vice President of Marketing and Engineering for Heatcraft Inc., a
subsidiary of LII. From 1988 to 1991, he held the position of Vice
President and General Manager of Heatcraft. From 1991 to 1995, he served
as President and Chief Operating Officer of Armstrong Air Conditioning
Inc., also a subsidiary of LII. Mr. Schjerven spent the first 20 years of
his career with The Trane Company, an international manufacturer and
marketer of HVAC systems, and McQuay-Perfex Inc.

(Photo of Terry D. TERRY D. STINSON, 61, has served as a Director of LII since 1998. Mr.
Stinson) Stinson currently serves as Chief Executive Officer of his own consulting
practice engaged in strategic alliances and marketing for the aerospace
industry. Until the fall of 2001, Mr. Stinson was Chairman and Chief
Executive Officer of Bell Helicopter Textron Inc., the world's leading
manufacturer of vertical lift aircraft and was 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 had been the President of Hamilton
Standard Division of United Technologies Corporation, a defense supply
company, since 1986.

(Photo of Richard L. RICHARD L. THOMPSON, 63, has served as a Director of LII since 1993. In
Thompson) 1995, Mr. Thompson was named to his present position of Group President
and member of the Executive Office of Caterpillar Inc., a manufacturer of
construction and mining equipment. He joined Caterpillar in 1983 as Vice
President, Customer Services. In 1990, he was appointed President of
Solar Turbines Inc., a wholly owned subsidiary of Caterpillar and
manufacturer of gas turbines. From 1990 to 1995, he held the role of Vice
President of Caterpillar, with responsibility for its worldwide engine
business. Previously, he had held the positions of Vice President of
Marketing and Vice President and General Manager, Components Operations
with RTE Corporation, a manufacturer of electrical distribution products.
Mr. Thompson serves as a Director for Gardner Denver, Inc., a
manufacturer of air compressors, blowers and petroleum pumps, the
National Association of Manufacturers, the nation's largest industrial
trade association, and Proctor Community Hospital in Peoria, Illinois.

DIRECTORS WHOSE TERMS CONTINUE UNTIL THE 2005 ANNUAL MEETING:

(Photo of David H. DAVID H. ANDERSON, 62, has served as a Director of LII since 1973. Mr.
Anderson) Anderson recently retired from the position of Co-Executive Director of
the Santa Barbara Museum of Natural History, a position he held from 1998
to 2000. He formerly had a private law practice specializing in land use
and environmental law. Mr. Anderson also serves as legal counsel for a
local land conservation organization in Santa Barbara County. He
currently serves on the Boards of the California Nature Conservancy and
the Land Trust Alliance and as past Chair of the Santa Barbara
Foundation.

(Photo of Thomas W. THOMAS W. BOOTH, 45, has served as a Director of LII since April 1999.
Booth) Mr. Booth became Vice President of Corporate Technology for LII in 2002.
In January 2000, he was appointed Vice President, Advanced Heat Transfer
of Heatcraft Inc. Previously, he was the Director, Business Development
of Heatcraft Inc. from 1997 to December 1999. Mr. Booth joined LII in
1984 and has served in various capacities including the District Manager
for the Baltimore/Virginia sales branch of Lennox Industries Inc. from
1994 to 1997. He currently serves on the Board of Directors of Employers
Mutual Casualty Company, a casualty insurance company.

(Photo of James J. JAMES J. BYRNE, 67, has served as a Director of LII since 1990. He has
Byrne) been Chairman of Byrne Technology Partners, Ltd., a firm that provides
business/product planning and valuation improvement and exit strategies
for high technology companies, since April 1995. In addition, Mr. Byrne
assists his clients by assuming executive responsibility with their
investments and in that regard served as Chairman and Chief Executive
Officer of OpenConnect Systems Incorporated, a developer of computer
software products, from May 1999 to May 2001. Prior to his current role,
he held a number of positions in the technology industry including
President of Harris Adacom Corporation, a network products and services
company, Senior Vice President of United Technologies Corporation's
Semiconductor Operation and President of North American group of Mohawk
Data Sciences, a manufacturer of distributed computer products. Mr. Byrne
began his career in high technology with General Electric Company.

(Photo of John W. JOHN W. NORRIS III, 45, has served as a Director since 2001. Mr. Norris
Norris) is the Associate Director of Philanthropy for the Maine Chapter of The
Nature Conservancy. Prior to his current position, he was Co-Founder and
President of Borealis, Inc., an outdoor products manufacturer, from 1988
to 2000. He served as an economic development Peace Corps Volunteer in
Jamaica, West Indies from 1985 to 1987. Before joining the Peace Corps,
Norris completed a graduate school internship at Lennox Industries Inc.
in Dallas in the summer of 1983. Mr. Norris was a senior credit analyst
at Fort Worth National Bank from 1981 to 1982. He has been on the Board
of Trustees for GlobalQuest, an international experiential educational
organization, since 1999. Mr. Norris served on the Board of Advisors for
Businesses for the Northern Forest, a 350-member advocacy group working
to protect wildlands, improve forest stewardship, and foster sustainable
economic development from 1997 through 2001.

(Photo of John W. JOHN W. NORRIS, JR., 67, was elected Chairman of the Board of Directors
Norris, Jr.) of LII in 1991. He has served as a Director of LII since 1966. After
joining LII in 1960, Mr. Norris held a variety of key positions including
Vice President of Marketing, President of Lennox Industries (Canada)
Ltd., a subsidiary of LII, and Corporate Senior Vice President. He became
President of LII in 1977 and was appointed President and Chief Executive
Officer of LII in 1980 and served through 2001. Mr. Norris is on the
Board of Directors of the Air-Conditioning & Refrigeration Institute, of
which he was Chairman in 1986. He is also an active board member of the
Gas Appliance Manufacturers Association, where he was Chairman from 1980
to 1981. He is the immediate past Chairman of The Nature Conservancy of
Texas board of trustees. He also serves as a Director of AmerUs Group
Co., a life insurance and annuity company.

John W. Norris, Jr., David H. Anderson and David V. Brown are all
grandchildren of D.W. Norris, the founder of LII. John W. Norris III, Steven R.
Booth and Thomas W. Booth are great grandchildren of D.W. Norris. John W.
Norris, Jr., David V. Brown and David H. Anderson are first cousins. John W.
Norris, Jr. is the father of John W. Norris III. Steven R. Booth and Thomas W.
Booth are brothers.

PROPOSAL 2: STOCKHOLDER PROPOSAL ON INDEXING EXECUTIVE STOCK OPTIONS

The Sheet Metal Workers' National Pension Fund (the "Proponent"), with a
mailing address of 601 N. Fairfax St., Suite 500, Alexandria, VA 22314, has
notified LII that it intends to present the resolution set forth below at the
Annual Meeting for action by the Stockholders of LII. The Proponent's statement
of support for the resolution, along with the Board of Directors' statement in
opposition, is set forth below. LII is not responsible for the contents of the
proposal or the Proponent's statement of support. As of January 15, 2003, the
Proponent beneficially owned 10,300 shares of LII's common stock.

PROPOSAL

Resolved, that the shareholders of Lennox International, Inc. (the
"Company") request that the Board of Directors adopt an executive compensation
policy that all future stock option grants to senior executives shall be
performance-based. For the purposes of this resolution, a stock option is
performance-based if the option exercise price is indexed or linked to an
industry peer group stock performance index so that the options have value only
to the extent that the Company's stock price performance exceeds the peer group
performance level.

STATEMENT OF SUPPORT

As long-term shareholders of the Company, we support executive compensation
policies and practices that provide challenging performance objectives and serve
to motivate executives to achieve long-term corporate value maximization goals.
We believe that stock option grants can and do often provide levels of
compensation well beyond those merited. Further, we believe that stock option
grants without specific performance-based targets often reward executives for
stock price increases due solely to a general stock market rise, rather than to
extraordinary company performance.

The resolution advocates performance-based stock options. It defines
performance-based stock options as indexed options whose exercise price moves
with an appropriate peer group index composed of a company's primary
competitors. It should be noted that there are other forms of indexed options
that use other types of market indices. The resolution requests that the
Company's Board ensure that future Company stock option plans link the options
exercise price to an industry performance index associated with a peer group of
companies selected by the Board, such as those companies used in the Company's
proxy statement to compare 5 year stock price performance.

Implementing an indexed stock option plan would mean that our Company's
participating executives would receive payouts only if the Company's stock price
performance was better then that of the peer group average. By tying the
exercise price to a market index, indexed options reward participating
executives for outperforming the competition. Indexed options would have value
when our Company's stock price rises in excess of its peer group average or
declines less than its peer group average stock price decline. By downwardly
adjusting the exercise price of the option during a downturn in the industry,
indexed options remove pressure to reprice stock options. In short, superior
performance would be rewarded.

At present, stock options granted by the Company are not indexed to peer
group performance standards. As long-term owners, we feel strongly that our
Company would benefit from the implementation of a stock option program that
rewarded superior long-term corporate performance. We urge your support for this
important governance reform.

LII STATEMENT IN OPPOSITION TO THE PROPOSAL

For the reasons set forth below, the Board of Directors strongly opposes
this proposal. Although LII's Compensation Committee of the Board of Directors
believes the concept of performance-based compensation arrangements is a
critical part of executive compensation, the Compensation Committee does not
agree in a policy of linking all future executive stock options to an industry
peer group stock performance index. The Compensation Committee is composed of
four independent/nonemployee directors who administer LII's executive
compensation program. The Compensation Committee's goal is to establish
executive compensation programs that deliver total pay linked to overall
business results and, therefore, attract, motivate and retain highly skilled
executives whose performance and contributions result in increased Stockholder
value. In order to evaluate the competitiveness of LII's executive compensation
program, the Compensation Committee has periodically engaged nationally
recognized human resources consulting firms to conduct market analyses of LII's
executive pay programs and practices.

The Compensation Committee gave appropriate consideration to the proposal
calling for the adoption of a policy of linking all future executive stock
options to an industry peer group stock performance index, and the Compensation
Committee recommends a vote "AGAINST" the proposal for the following reasons:

LII's current stock option program aligns the interests of LII executives
with those of LII Stockholders. The executive realizes value from the options
when LII's operating and financial performance leads to an increase in the price
of LII common stock. An increase in the price of LII common stock benefits all
Stockholders. It is less clear that the interests of executives are aligned with
those of Stockholders under an indexed stock option plan. Under an indexed stock
option program, a decline in the applicable index will result in a decline in
the option price. In this instance, an executive benefits from a decline in the
index while the Stockholders do not. The Compensation Committee feels that it is
important in designing performance-based compensation arrangements to properly
align the interests of LII executives with those of LII Stockholders.

In addition, indexed stock options would likely result in variable and
unpredictable charges against LII's quarterly earnings. The Compensation
Committee believes that the use of indexed options adds volatility to LII's
quarterly earnings and is not beneficial to Stockholders.

Finally, the Board of Directors believes that the Compensation Committee
should have the ability to institute compensation programs that are competitive
with the marketplace. Since LII's current stock option program is the type used
by the vast majority of corporations, the Board of Directors believes that
limiting the Compensation Committee's ability to design a compensation system
consistent with that of other companies could place LII at a competitive
disadvantage in attracting and retaining executives. The Board of Directors
believes that the Compensation Committee should have the flexibility to choose
the incentives that best balance the variety of goals that LII seeks to pursue
through its compensation programs.

For these reasons, the Board of Directors recommends that you vote
"AGAINST" a policy of limiting future stock option grants to indexed options.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE STOCKHOLDER
PROPOSAL ON INDEXING EXECUTIVE STOCK OPTIONS

PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED "AGAINST" THE
STOCKHOLDER PROPOSAL
UNLESS A STOCKHOLDER HAS INDICATED OTHERWISE IN VOTING THE PROXY.

BOARD ORGANIZATION

BOARD COMMITTEES

The LII Board of Directors has established an Audit Committee, Acquisition
Committee, Board Governance Committee, Human Resource Committee, Compensation
Committee and a Pension and Risk Management Committee. The Board of Directors
held six meetings in 2002. All Directors attended at least 75% of Board and
Committee meetings they were scheduled to attend.

The Audit Committee is comprised of four independent Directors as defined
by the New York Stock Exchange's current listing standards. It assists the Board
in fulfilling its responsibilities to oversee LII's financial reporting process
and monitors the integrity of LII's financial statements, including LII's
accounting practices and internal accounting controls, and the independence and
performance of LII's auditors. The Audit Committee also appoints a firm of
independent certified accountants whose duty is to examine the LII consolidated
financial statements. The Audit Committee met eight times in 2002. The following
Directors currently serve on the Audit Committee: Janet K. Cooper (chair), C. L.
(Jerry) Henry, John E. Major and Terry D. Stinson. Additional information
concerning the Audit Committee is set forth below under "Audit Committee Report"
and in the charter of the Audit Committee which is attached as Appendix A to
this Proxy Statement.

The Acquisition Committee is responsible for evaluating potential
acquisitions and making recommendations on proposed acquisitions. It met two
times in 2002. The following Directors currently serve on the Acquisition
Committee: John E. Major (chair), Steven R. Booth, Thomas W. Booth, David V.
Brown, C. L. (Jerry) Henry and Terry D. Stinson.

The Board Governance Committee is responsible for making recommendations on
the election of Directors and officers, the number of Directors, and other
matters pertaining to the governance of the Board of Directors. It met four
times in 2002. The following Directors currently serve on the Board Governance
Committee: Terry D. Stinson (chair), Linda G. Alvarado, C.L. (Jerry) Henry and
Richard L. Thompson. This Committee considers suggestions from Stockholders and
other sources regarding possible candidates for Director. Such suggestions,
together with appropriate biographical information, should be submitted to the
Chief Administrative Officer of LII.

The Human Resource Committee is responsible for succession planning,
management development programs and other human resource matters. It met five
times in 2002. The following Directors currently serve on the Human Resource
Committee: James J. Byrne (chair), David H. Anderson, Janet K. Cooper, John E.
Major and Richard L. Thompson.

The Compensation Committee is responsible for evaluating the performance of
LII's Chairman of the Board and its Chief Executive Officer, making
recommendations with respect to the salaries of LII's Chairman of the Board and
its Chief Executive Officer, reviewing and approving the compensation of
executive staff members, approving the compensation for Nonemployee Directors
and Committee members, approving stock equity programs for senior management,
approving all employee benefit plan designs and other matters relating to the
compensation of LII's Directors, officers and employees. It met four times in
2002. The following Directors currently serve on the Compensation Committee:
Richard L. Thompson (chair), James J. Byrne, Janet K. Cooper and John E. Major.

The Pension and Risk Management Committee is responsible for overseeing the
administration of LII's pension and profit sharing plans, overseeing matters
relating to LII's insurance coverage, reviewing matters of legal liability and
environmental issues, and other matters relating to safety and risk management.
It met two times in 2002. The following Directors currently serve on the Pension
and Risk Management Committee: David H. Anderson (chair), Linda G. Alvarado,
Steven R. Booth, Thomas W. Booth and John W. Norris III. Subject to his election
to the Board, Walden W. O'Dell will also serve on the Pension and Risk
Management Committee.

AUDIT COMMITTEE REPORT

Audit Committee Charter. LII's Audit Committee acts pursuant to the Audit
Committee Charter adopted by the Board of Directors in April 2000 and amended in
March 2003, a copy of which is attached as Appendix A. The Audit Committee
consists solely of independent members of the Board of Directors. The role of
the Audit Committee is to assist the Board of Directors in fulfilling its
oversight responsibilities by reviewing LII's financial reporting process, the
system of internal control, the audit process, and LII's process for monitoring
compliance with laws and regulations and LII's policies. In performing its role,
the Audit Committee maintains effective working relationships with the Board of
Directors, management, the internal auditors and the independent accountants. As
set forth in the Charter, it is not the duty of the Audit Committee to plan or
conduct audits or to determine that LII's financial statements and disclosures
are complete and accurate and are in accordance with generally accepted
accounting principles and applicable rules and regulations of the Securities and
Exchange Commission and the New York Stock Exchange. The independent accountants
are responsible for auditing LII's financial statements and expressing an
opinion as to their conformity with generally accepted accounting principles.

Auditor Independence. In the performance of its oversight function, the
Audit Committee has reviewed and discussed the quarterly and audited financial
statements, including the quality of accounting principles, with management and
the independent accountants. The Audit Committee has also discussed with the
independent accountants the matters required to be discussed by Statement on
Auditing Standards No. 61, Communication with Audit Committees, as currently in
effect. Finally, the Audit Committee has received the written disclosures and
the letter from the independent accountants required by Independence Standards
Board Standard No. 1, Independence Discussions with Audit Committees, as
currently in effect, and has discussed with the independent accountants, the
independent accountants' independence and considered whether the provision of
non-audit services by the independent accountants to LII is compatible with
maintaining the accountants' independence.

Members of the Audit Committee rely without independent verification on the
information provided to them and on the representations made by management and
the independent accountants. Accordingly, the Audit Committee's oversight does
not provide an independent basis to determine that management has maintained
appropriate accounting and financial reporting principles or appropriate
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, the Audit
Committee's considerations and discussions referred to above do not assure that
the audits of LII's financial statements have been carried out in accordance
with generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
LII's independent accountants are in fact "independent."

Audit Committee Recommendation. Based upon the reports and discussions
described in this report, and subject to the limitations on the role and
responsibilities of the Audit Committee referred to above and in the Audit
Committee Charter, the Audit Committee recommended to the Board of Directors
that the audited financial statements be included in LII's Annual Report on Form
10-K for the year ended December 31, 2002.

Submitted by the Audit Committee of the Board of Directors:

Janet K. Cooper (chair) C. L. (Jerry) Henry John E. Major
Terry D. Stinson

DIRECTORS COMPENSATION

Directors who are employees of LII do not receive additional compensation
for positions on the Board of Directors. In 2002, there were two employee Board
members: Messrs. Robert E. Schjerven, Chief Executive Officer; and Thomas W.
Booth, Vice President, Corporate Technology. The 2002 compensation package for
all outside directors, with the exception of the Chairman, included an annual
retainer of $25,000 in cash and $10,000 in common stock, an additional annual
retainer of $4,000 in cash for serving as a committee chair and a fee of $1,000
in cash for attending each meeting day of the Board of Directors or any
committee of the Board, or $500 in the event of a telephonic meeting. The
Chairman's compensation package is twice that of other directors: an annual
retainer of $50,000 in cash and $20,000 in common stock, an additional annual
retainer of $8,000 in cash for serving as a committee chair and a fee of $2,000
in cash for attending each meeting day of the Board of Directors or any
committee of the Board, or $1,000 in the event of a telephonic meeting.
Directors may elect to receive the cash portion of their annual retainer in cash
or shares of common stock. Directors may defer 25 percent or more of their
annual cash retainer in an interest bearing account under the Directors'
Compensation Deferred Plan. All Directors receive reimbursement for reasonable
out-of-pocket expenses incurred in connection with attendance at meetings of the
Board of Directors or a committee of the Board.

In addition, each non-employee director may periodically, under the 1998
Incentive Plan of Lennox International Inc. (the "Plan") administered by the
Board of Directors, receive stock options to purchase shares of common stock at
an exercise price equal to the fair market value of such shares on the date of
grant. Under the Plan, the stock options are non-qualified, and no such options
awarded in any given year shall provide for the purchase of more than 16,500
shares of common stock by each director. The 2001 director options grant was
delayed until May 2002, when Stockholders approved additional shares added to
the Plan. In May 2002, each non-employee director, except for the Chairman, was
awarded 11,348 stock options. The Chairman was awarded 16,500 stock options and
also received cash in the amount of $39,592 in order to deliver a total award
value that was twice that of the other directors, as provided in his
compensation package. Resuming the normal annual schedule, the 2002 director
options grant was made in December 2002, when each non-employee director, except
for the Chairman, was awarded 12,483 stock options. The Chairman was awarded
16,500 stock options and also received cash in the amount of $40,044 in order to
deliver a total award value that was twice that of the other directors, as
provided in his compensation package. All options awarded to directors in 2002
have a term of seven years and vest and become exercisable in annual increments
of one-third in each of the three succeeding Decembers following the grant
dates.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION PHILOSOPHY AND POLICY

Executive compensation is administered by the Compensation Committee of the
Board of Directors (the "Committee"), which is composed of the four outside
Board members named below. This report defines the philosophy and describes the
decisions made by the Committee during 2002 with respect to the named executive
officers. It is the Committee's goal to establish executive compensation
programs that deliver total pay linked to overall business results and,
therefore, attract, motivate and retain highly skilled executives whose
performance and contributions result in increased Stockholder value. To that
end, LII maintains a pay-for-performance compensation philosophy to pay
market-competitive base salaries, while also delivering variable pay
opportunity, which is directly linked to the achievement of specific Company
performance measurements and to the performance and contribution of the
individual. In addition to the base salary program, LII's variable pay programs
include both short- and long-term incentive compensation vehicles.

In order to evaluate the competitiveness of the executive total
compensation program, the Committee has periodically engaged Hewitt Associates
LLC, a nationally recognized human resources

consulting firm to conduct market analyses of the Company's executive pay
programs and practices. The Committee emphasizes delivering market-competitive
and flexible total compensation to support the Company's business objectives.
LII's executive pay is compared to a group of companies similar to LII, although
not necessarily the same companies included in the peer group in the performance
graph in this proxy statement.

BASE SALARY

Executive Officers

LII's executive base salary program is designed to be competitive with the
median of the marketplace. In 2002, the Committee administered the officers'
base salaries within an executive broad band salary range to provide flexibility
to reward executive development, support succession planning and aid in
executive recruiting. LII had engaged Hewitt Associates LLC annually to conduct
a detailed market analysis of each specific component of the executive
compensation program. During 2001, in preparation for 2002 salary
administration, LII asked Hewitt to conduct a trend analysis to determine
competitive salary movement for executive positions. The results of the analysis
indicated flat market salaries, one of many consequences of a struggling economy
following the events of September 11, 2001. Given the results of the market
study and the general economic downturn, LII's executive salaries were frozen
for 2002 and no increases were awarded.

Chief Executive Officer

Based on the consultant's market trend analysis and the general economic
downturn, Mr. Schjerven's annual base salary for 2002 remained frozen at the
2001 level. Notwithstanding the salary freeze, Mr. Schjerven's 2001 achievements
included:

- Ongoing execution of LII's worldwide organization strategy.

- Successfully focused the management team in LII's Service Experts
subsidiary to meet strategic business objectives.

- Demonstration of improved results to LII's Stockholders and to the
investment community to reverse the disappointing market valuation
evidenced by the decline of the stock price.

- Execution of synergistic activities between its North American HVAC
business units in support of long-term growth and development of its
residential products businesses.

SHORT-TERM INCENTIVE COMPENSATION

Executive Officers

The Committee administers an executive short-term incentive opportunity
through a program that requires the achievement of specific Company financial
objectives for those individuals who most directly influence performance results
and thereby supports the following strategic objectives:

- maintain competitive total executive compensation opportunity;

- align all executive reward programs with the success of the Company;

- attract top executive talent to support organizational growth and
expansion;

- ensure equity among internal position values; and

- implement "best practices" in the area of executive compensation.

In 2002, executive officers and the Chief Executive Officer participated in
two annual variable pay programs:

- The major business units within LII each had a broad based variable pay
program in which the respective president managing the business unit
participated. Each business unit president, in

conjunction with the Chief Executive Officer, determined the financial
measurements and standards for that business unit's program. Based on
business unit performance, the programs generated cash payouts ranging
from 4.24% to 7.0% of annual base earnings. Each broad based program was
aligned with the performance metrics in the management short-term
incentive program, detailed below.

- Each year, the Chief Executive Officer recommends and the Committee
evaluates and approves the design, performance measurements, and targets
for the management short-term incentive programs. The performance metric
for the 2002 management short-term incentive program was cash flow.
Threshold, minimum, target, superior and maximum performance levels were
defined, and target bonus award levels were established for each
executive officer. Target incentive award opportunity for the named
executive officers ranged from 65% to 100% of their base salary.
Executive officers who are also presidents of a business unit had 70% of
the target based on their business unit results and 30% based on
aggregate LII results. Fifty percent (50%) of the target payment could be
achieved with the threshold performance and up to 225% of the target
payment could be made upon achievement of the maximum performance. The
named executives received a maximum short-term incentive award based on
the 2002 cash flow measurements.

Chief Executive Officer

Mr. Schjerven participated in the two annual variable pay programs listed
above. Prior to the beginning of 2002, the Committee and the Human Resource
Committee of the Board of Directors determined his performance goals and their
expectations for 2002. The Committee's assessment of Mr. Schjerven's 2002
performance results included the following:

- Under difficult economic conditions, Mr. Schjerven successfully focused
his executive team on improving the organization's financial structure,
balance sheet and cash flow.

- Mr. Schjerven led his team to generate strong cash flow, and reduced
total debt by 27% in 2002.

- Debt-to-total capital ratio was strong in 2002, outperforming the target
goals previously established.

- Mr. Schjerven took action to focus on LII's core strengths in heating,
air conditioning and refrigeration industries by entering into a heat
transfer joint venture with Outokumpu Oyj of Finland; completing an
extensive rationalization program involving several manufacturing, sales
and distribution facilities in North and South America, Europe and Asia;
and exiting several non-core and underperforming product lines.

Mr. Schjerven received short-term incentive awards for 2002 performance
totaling $1,725,000.

LONG-TERM INCENTIVE COMPENSATION

LII's standard executive long-term incentive compensation program is
comprised of two vehicles: stock options and performance share awards. Their
purpose is to foster and enhance the long-term success of the Company for the
benefit of its Stockholders by offering the incentive of long-term rewards to
those executives who have proprietary interest in the growth and performance of
the Company and who have the principal responsibility for long-term
profitability of LII. In 2002, LII also granted a non-periodic restricted stock
award to key executives to encourage retention.

Executive Officers

Stock Options--Based on internal affordability and median levels of
market-competitive practices outlined in the consultant's market study, the
Committee reviews and determines annually LII's stock option award levels for
executive officers. Although typically granted annually in December, no stock
options were granted during 2001 due to an insufficient number of shares
remaining in the Plan. After the Stockholders approved additional shares
allocated to the Plan in May 2002, LII granted stock

options, delayed from December 2001. Each named executive, with the exception of
Messrs. D. Smith and Schjerven, received 42,100 stock options. Mr. D. Smith
received 2,100 options as a supplement to his 2001 employment award of 40,000
options, which aligned his annual total with his peers. Resuming the normal
grant schedule, another stock option grant was made in December 2002. Each named
executive, with the exception of Mr. Schjerven, received 46,310 options. The
2002 awards were in the form of non-qualified stock options, exercisable at the
fair market value on the grant date and vesting in increments of thirds in each
of the succeeding Decembers following the grant dates. Options granted in 2002
have a seven-year term.

Performance Share Awards--Based on internal affordability and
market-competitive practices outlined in the consultant's market study, the
Committee reviews and determines annually LII's Performance Share Program
("PSP") award levels for executive officers. Awards are made in December for a
performance period beginning the following January 1. The performance period for
the PSP consists of three consecutive fiscal years commencing each January 1.
Minimum, target and maximum performance standard levels, with a corresponding
payout opportunity ranging from 50% to 200% of target are established, the
achievement of which earns a lesser or greater multiplier of a contingent award
granted at the beginning of the three-year period. There were no PSP awards
granted in 2001 due to an insufficient number of shares remaining in the Plan.
After the Stockholders approved additional shares allocated to the Plan in May
2002, LII granted the 2002-2004 PSP award in May 2002, delayed from the normal
December 2001 award date. Each named executive, with the exception of Mr.
Schjerven, received 28,000 contingent shares. Resuming the normal grant
schedule, the 2003-2005 grant was made in December 2002, at which time each
named executive, with the exception of Mr. Schjerven, received 28,000 contingent
shares. For awards made in 2002, the financial measure is return on invested
capital. Contingent awards are expressed in shares of the Company's common
stock. At the end of any performance period the earned share awards are
calculated by applying the performance standards for such period to the
contingent share award. Current stock holdings of the executives were not
considered when determining the size of the 2002 contingent awards.

Any PSP earned awards will be in the form of restricted stock with the
following provisions:

- Contingent shares awarded at the beginning of the three-year performance
period will vest after 10 years; i.e., even if the threshold performance
targets are not met, participants will receive the contingent award 10
years after the grant, providing they are still employed with the
Company.

- If, at the end of the three-year performance period, actual performance
is above threshold but below target, participants will receive only that
portion of the contingent shares relative to the actual performance
results. Those shares are fully vested at the time of payout.

- The remainder of the contingent shares-to-target will be vested and paid
out after an additional seven years (10 years from grant), providing the
participant is still employed.

- If targets are exceeded at the end of the three-year performance period,
full payouts will occur and there will be no remaining shares to be
vested at a later time.

Restricted Stock Awards--In order to address concerns related to LII's
traditionally conservative long-term incentive program and its ability to
attract and retain key executives, as well as to ensure continuity in executing
long-term business objectives, LII awarded a non-periodic restricted stock award
to key executives in July 2002. Each of the named executives, with the exception
of Mr. Schjerven, received 15,500 restricted shares. The restricted shares vest
after three years from the grant date, and the participant must remain employed
by the Company to receive the shares.

Chief Executive Officer

Stock Options--Based on internal affordability, market-competitive
practices outlined in the consultant's market study, and using the Black-Scholes
model to determine a market-competitive award value for the Chief Executive
Officer, the Committee reviews and determines annually Mr. Schjerven's stock
option award. In 2001, Mr. Schjerven, along with the other named executive
officers, did not

receive a stock option award. After the Stockholders approved additional shares
allocated to the Plan in May 2002, LII made a stock option grant, delayed from
December 2001. Mr. Schjerven's May 2002 award was for 209,976 options. Resuming
the normal grant schedule, another grant was made in December 2002. Mr.
Schjerven's December 2002 award was for 230,974 options. The 2002 awards were in
the form of non-qualified stock options, exercisable at the fair market value on
the grant date and vesting in increments of thirds in each of the succeeding
Decembers following the grant dates. Options granted in 2002 have a seven-year
term.

Performance Share Awards--Mr. Schjerven did not receive a PSP award in
2001, as LII did not make a PSP grant in 2001 due to an insufficient number of
shares remaining in the Plan. After the Stockholders approved additional shares
allocated to the Plan in May 2002, LII granted the 2002-2004 PSP award, as
outlined above, in May 2002, delayed from December 2001. Mr. Schjerven's May
award was for 70,800 contingent shares. Resuming the normal grant schedule, the
2003-2005 PSP grant was made in December 2002. Mr. Schjerven's December award
was for 70,800 contingent shares. For awards made in 2002, the financial
measurement is return on invested capital. Contingent awards are expressed in
shares of the Company's common stock. At the end of the performance period the
earned share awards are calculated by applying the performance standards for
such period to the contingent share award. Current stock holdings of the
executives were not considered when determining the size of the 2002 contingent
awards.

Any PSP earned awards will be in the form of restricted stock with the
following provisions:

- The remainder of the contingent shares-to-target will be vested and paid
out after an additional seven years (10 years from grant), providing the
participant is still employed.

- If targets are exceeded at the end of the three-year performance period,
full payouts will occur and there will be no remaining shares to be
vested at a later time.

Restricted Stock Awards--Mr. Schjerven did not receive the restricted stock
award in July 2002.

POLICY FOR COMPLIANCE WITH SECTION 162(M)

Section 162(m) of the Internal Revenue Code, as amended, limits a company's
ability to deduct compensation paid in excess of $1 million to the Chief
Executive Officer and the next four highest paid executives, unless the
compensation meets certain Stockholder approved performance requirements. It is
the Company's intent to make awards that qualify as deductible compensation
under section 162(m) of such Code whenever possible. However, where granting
awards is consistent with the strategic business goals of the Company, the
Committee reserves the right to make awards that are non-deductible.

The following individuals who served on the Compensation Committee of the
Board of Directors during 2002 submit this report on LII's executive
compensation programs:

Richard L. Thompson (chair) Linda G. Alvarado
James J. Byrne John E. Major

EXECUTIVE COMPENSATION

The following table sets forth information on compensation earned in 2002,
2001 and 2000 by LII's Chief Executive Officer and its four other most highly
compensated executive officers, such individuals sometimes being referred to as
the "named executive officers".

SUMMARY COMPENSATION TABLE

LONG-TERM COMPENSATION
--------------------------------------
AWARDS PAYOUTS
------------------------- ----------
SECURITIES
ANNUAL COMPENSATION RESTRICTED UNDERLYING
--------------------- STOCK OPTIONS/SARS LTIP ALL OTHER
NAMED EXECUTIVE OFFICER YEAR SALARY BONUS(1) AWARDS(2) GRANTED PAYOUTS(3) COMPENSATION(4)
----------------------- ---- -------- ---------- ---------- ------------ ---------- ---------------

Robert E. Schjerven 2002 $750,000 $1,725,000 $2,094,618 440,950 $104,569 $148,784
Chief Executive Officer 2001 750,000 900,000 0 0 78,137 68,888
Lennox International
Inc. 2000 512,050 158,245 793,377 299,965 35,674 75,140
Harry J. Ashenhurst,
Ph.D. 2002 368,376 557,169 1,079,635 88,410 64,350 56,881
Executive Vice
President 2001 368,376 287,333 0 0 58,603 32,817
and Chief
Administrative 2000 330,342 162,361 327,500 60,773 23,314 61,471
Officer
Richard A. Smith (5) 2002 350,004 529,381 1,079,635 88,410 0 51,207
Executive Vice
President 2001 337,323 263,112 0 75,000 0 11,844
and Chief Financial
Officer
Dennis H. Smith (6) 2002 350,004 529,381 1,079,635 48,410 0 162,987
Executive Vice
President 2001 67,211 40,000 0 40,000 0 960
and President Service
Experts
Carl E. Edwards, Jr. 2002 320,988 485,494 1,079,635 88,410 64,350 52,281
Executive Vice
President 2001 320,988 250,371 0 0 58,603 30,811
and Chief Legal Officer 2000 304,149 91,245 327,500 60,773 23,876 46,215

------------

(1) Includes annual incentive payments for the respective year from annual
variable pay plans and other bonuses.

(2) Represents performance share awards and restricted stock awards of the
following number of shares of LII common stock granted pursuant to the Plan
multiplied by the stock price on the grant date(s). There were no stock
grants made in 2001 due to an insufficient number of shares remaining in the
Plan; therefore, the delayed 2001 grant was made in May 2002. Performance
share awards in May 2002 at a stock price of $16.21 per share: Mr. Schjerven
received 70,800 shares; Dr. Ashenhurst received 28,000 shares; Mr. R. Smith
received 28,000 shares; Mr. D. Smith received 28,000 shares and Mr. Edwards
received 28,000 shares. For the May 2002 grant, shares granted will vest in
December 2004 providing specific performance targets are met. Shares that do
not vest in any performance period due to failure to achieve performance
targets will vest in 10 years from the grant date. A restricted stock award
in July 2002 at a stock price of $16.21 per share: Mr. Schjerven received no
shares; Dr. Ashenhurst received 15,500 shares; Mr. R. Smith received 15,500
shares; Mr. D. Smith received 15,500 shares and Mr. Edwards received 15,500
shares. For the July 2002 grant, all shares granted will vest in July 2005.
Performance share awards in December 2002 at a stock price of $13.375 per
share: Mr. Schjerven received 70,800 shares; Dr. Ashenhurst received 28,000
shares; Mr. R. Smith received 28,000 shares; Mr. D. Smith received 28,000
and Mr. Edwards received 28,000. All shares will vest in December 2005
providing performance targets are met. Shares that do not vest in any
performance period due to failure to achieve performance targets will vest
in 10 years from the grant date. There were no stock grants

made in 2001 due to an insufficient number of shares remaining in the Plan.
In December 2000 at a stock price of $8.1875 per share: Mr. Schjerven
received 96,901 shares; Dr. Ashenhurst received 40,000 shares and Mr.
Edwards received 40,000 shares. For the 2000 grant, all shares granted will
vest in December 2003 providing performance targets are met. Shares that do
not vest in any performance period due to failure to achieve performance
targets will vest in 10 years from the grant date.

(3) 2002 amounts represent the value of earned awards in the form of LII common
stock for the PSP for the 1999-2001 performance period, paid in 2002. 2001
amounts represent the value of earned awards in the form of LII common stock
for the PSP for the 1999-2000 performance period, paid in 2001. 2000 amounts
represent the value of earned awards in the form of LII common stock for the
PSP for the 1999 performance period paid in 2000.

(4) Composed of contributions by LII to its profit sharing retirement plan and
profit sharing restoration plan and the dollar value of term life insurance
premiums paid by LII. Contributions to the plans were as follows: In 2002:
Mr. Schjerven--$133,494; Dr. Ashenhurst--$50,953; Mr. R. Smith--$47,417; Mr.
D. Smith--$11,047; Mr. Edwards--$43,951. Also includes relocation payments
for Mr. D. Smith. In 2001: Mr. Schjerven--$54,154; Dr. Ashenhurst--$27,060;
Mr. R. Smith--$8,221; Mr. D. Smith--$0; Mr. Edwards--$23,082. In 2000: Mr.
Schjerven--$68,702; Dr. Ashenhurst--$52,558; Mr. R. Smith--$0; Mr. D.
Smith--$0; Mr. Edwards--$40,257.

(5) Hired as Executive Vice President and Chief Financial Officer on January 15,
2001 and received 75,000 stock options as a new employment grant.

(6) Hired as Executive Vice President and President Service Experts on October
23, 2001 and received 40,000 stock options as a new employment grant. In May
2002 he received 2,100 stock options as a supplement to his 2001 employment
award of 40,000 stock options, aligning his annual total award with his
peers. Mr. D. Smith's employment with LII terminated on March 24, 2003.

The following table provides information concerning stock options granted
to the named executive officers in 2002.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

INDIVIDUAL GRANTS
--------------------------------------------------------------------------------
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO GRANT DATE
GRANT OPTIONS/SARS EMPLOYEES IN EXERCISE OR EXPIRATION PRESENT
NAME DATE GRANTED FISCAL YEAR BASE PRICE(1) DATE(2) VALUE(3)
---- -------- ------------ ------------ ------------- ---------- ----------

Robert E. Schjerven........ 5/17/02 209,976 7.38 $ 16.21 12/13/08 $1,156,968
12/13/02 230,974 8.12 13.375 12/13/09 1,272,667
Harry J. Ashenhurst,
Ph.D. ................... 5/17/02 42,100 1.48 16.21 12/13/08 231,971
12/13/02 46,310 1.63 13.375 12/13/09 255,168
Richard A. Smith........... 5/17/02 42,100 1.48 16.21 12/13/08 231,971
12/13/02 46,310 1.63 13.375 12/13/09 255,168
Dennis H. Smith(4)......... 5/17/02 2,100 0.07 16.21 12/13/08 11,571
12/13/02 46,310 1.63 13.375 12/13/09 255,168
Carl E. Edwards, Jr. ...... 5/17/02 42,100 1.48 16.21 12/13/08 231,971
12/13/02 46,310 1.63 13.375 12/13/09 255,168

---------------

(1) Equals the fair market value of the LII common stock on the date of grant.

(2) The May 2002 grant was delayed from December 13, 2001 to obtain Stockholder
approval for additional shares; therefore, expiration date is December 13,
2008.

(3) The grant date present values shown in the table were determined using the
Black-Scholes option valuation model using the following assumptions: stock
price volatility of 50.0% which represents an

average volatility among general industry companies; expected option life of
7.0 years; dividend yield of 3.0%; risk free interest rate of 4.29%;
modified derived value of $5.51; which includes the following additional
assumptions: discounts for the probability of termination for death,
disability, retirement and voluntary/involuntary terminations.

(4) Dennis H. Smith received 2,100 stock options as a supplement to his 2001
employment award of 40,000 stock options, aligning his annual total award
with his peers.

The following table provides the options exercised during 2002 for each of
the named executive officers and the number of options and the value of
unexercised options held by the named executive officers as of December 31,
2002.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
SHARES DECEMBER 31, 2002 AT DECEMBER 31, 2002(1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------

Robert E. Schjerven............ 0 $0 419,573 470,946 $1,049,150 $450,696
Harry J. Ashenhurst, Ph.D. .... 0 0 203,096 94,633 260,627 91,308
Richard A. Smith............... 0 0 51,534 111,876 72,937 72,937
Dennis H. Smith................ 0 0 14,034 74,376 51,403 102,797
Carl E. Edwards, Jr. .......... 0 0 203,096 94,633 260,627 91,308

------------

(1) Calculated on the basis of the fair market value of the underlying
securities as of December 31, 2002, $12.695 per share, minus the exercise
price for "in-the-money" options.

The following table provides information concerning performance share
awards and restricted stock awards made in 2002 to the named executive officers
under the Plan. The named executive officers were awarded a number of
performance shares of LII common stock in May and December 2002 subject to
achievement of performance targets based on the return on invested capital for a
three-year period. Information about the portion of the performance share award
that becomes vested regardless of whether the performance goals are met is
presented under the Restricted Stock Awards column in the "Summary Compensation
Table" presented previously in this Proxy Statement. Presented below is the
maximum number of performance shares of LII common stock that may be payable to
each of the named executive officers that is subject to achievement of the
performance goals. The actual number of shares awarded depends on the level of
achievement of the performance objectives. Additionally, the named executive
officers were awarded a restricted stock grant in July 2002, whereby all shares
vest in July 2005, providing continued employment. Mr. Schjerven did not receive
a restricted stock award.

LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR

NUMBER OF SHARES, UNITS PERFORMANCE OR OTHER PERIOD
NAME DATE OF GRANT OR OTHER RIGHTS UNTIL MATURATION OR PAYOUT
---- ------------- ----------------------- ---------------------------

Robert E. Schjerven.................. 5/17/02 141,600 3 years
Robert E. Schjerven.................. 12/13/02 141,600 3 years
Harry J. Ashenhurst, Ph.D. .......... 5/17/02 56,000 3 years
Harry J. Ashenhurst, Ph.D. .......... 7/18/02 15,500 3 years
Harry J. Ashenhurst, Ph.D. .......... 12/13/02 56,000 3 years
Richard A. Smith..................... 5/17/02 56,000 3 years
Richard A. Smith..................... 7/18/02 15,500 3 years
Richard A. Smith..................... 12/13/02 56,000 3 years
Dennis H. Smith...................... 5/17/02 56,000 3 years
Dennis H. Smith...................... 7/18/02 15,500 3 years
Dennis H. Smith...................... 12/13/02 56,000 3 years
Carl E. Edwards, Jr. ................ 5/17/02 56,000 3 years
Carl E. Edwards, Jr. ................ 7/18/02 15,500 3 years
Carl E. Edwards, Jr. ................ 12/13/02 56,000 3 years

RETIREMENT PLANS

The named executive officers participate in four LII-sponsored retirement
plans. The plans are as follows: the pension plan for salaried employees, the
profit sharing retirement plan, the supplemental retirement plan, and the profit
sharing restoration plan. The supplemental retirement plan and the profit
sharing restoration plan are non-qualified plans. LII pays the full cost of each
of these plans.

The pension plan for salaried employees is a floor offset plan. A target
benefit is calculated using credited service and final average pay during the
five highest consecutive years. The benefit is currently based on 1.00% of final
average pay, plus 0.60% of final average pay above Social Security covered
compensation, multiplied by the number of years of credited service, not to
exceed 30 years. Employees vest after five years of service and may commence
unreduced benefits at age 65. If specified age and service requirements are met,
benefits may commence earlier on an actuarially reduced basis. At time of
retirement, a participant may choose one of five optional forms of payment.

The supplemental retirement plan permits income above Internal Revenue
Service limitations to be considered in determining final average pay, doubles
the rate of benefit accrual, limits credited service to 15 years and permits
early retirement on somewhat more favorable terms than the pension plan.

The profit sharing retirement plan is a defined contribution plan. Profit
sharing contributions, as determined by the Board of Directors, are credited
annually to participants' accounts based on total pay. Participants are fully
vested after six years. The assets of the plan are employer directed.
Distributions may occur at separation of employment and can be paid directly to
the participant.

The profit sharing restoration plan permits accruals that otherwise could
not occur because of Internal Revenue Service limitations on compensation.

The estimates of annual retirement benefits shown in the following table
are the targets established by the supplemental retirement plan.

YEARS OF SERVICE
-------------------------------------------------------------
2002 FINAL AVERAGE EARNINGS(1) 5 10 15 20 25 30
------------------------------ ------- ------- -------- -------- -------- --------

$ 250,000...................... $34,906 $69,812 $104,718 $104,718 $104,718 $104,718
425,000...................... 62,906 125,812 188,718 188,718 188,718 188,718
600,000...................... 90,906 181,812 272,718 272,718 272,718 272,718
775,000...................... 118,906 237,812 356,718 356,718 356,718 356,718
950,000...................... 146,906 293,812 440,718 440,718 440,718 440,718
1,125,000...................... 174,906 349,812 524,718 524,718 524,718 524,718
1,300,000...................... 202,906 405,812 608,718 608,718 608,718 608,718

------------

(1) Final Average Earnings are the average of the five highest consecutive years
of includible earnings. Compensation for these purposes includes salary and
bonuses, and excludes extraordinary compensation such as benefits from the
Plan or its predecessor plans. Bonus numbers used in these calculations, as
per plan requirements, are the bonuses actually paid in those years. In the
"Summary Compensation Table," the 2002 bonus reported is the bonus earned in
2002, but not actually paid until 2003.

As of December 31, 2002, the final average earnings and the eligible years
of credited service for each of the named executive officers was as follows: Mr.
Schjerven $918,757--16.80 years; Dr. Ashenhurst $531,260--14.00 years; Mr.
Edwards $465,610--11.00 years; Mr. R. Smith $0--2.0 years; Mr. D. Smith $0--1.3
years.

EMPLOYMENT AGREEMENTS

LII has entered into employment agreements with the named executive
officers, which are identical except for the name of the named executive officer
who is a party to the agreement and the date of the agreement. These employment
agreements establish the basis of compensation and assignments, and contain
post-employment covenants covering confidential information, the diverting of
employees, vendors and contractors and the solicitation of customers. These
agreements also establish binding arbitration as the mechanism for resolving
disputes and provide benefits and income in the event employment terminates
under specified circumstances. 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 a decision not to
renew the agreement.

If LII terminates the employee prior to the expiration of the term of the
agreement or if LII does not renew the agreement for any reason other than for
cause, the 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 the employee's base salary in addition to any other compensation or
benefits applicable to an employee at the employee's level.

If LII terminates the employee other than for cause, including LII's
non-renewal of the agreement, and the employee agrees to execute a written
general release of any and all possible claims against LII existing at the time
of termination, LII will provide the employee with an enhanced severance
package. That package includes payment of the employee's base monthly salary for
a period of twenty-four months following the date of termination, a lump sum in
the amount which totals any short-term bonus payments actually paid to the
employee over the twenty-four month period prior to the date of termination, a
lump sum payment of a sum equal to ten percent of the employee's annual base
salary in effect at the time of termination in lieu of perquisites lost, and
forgiveness of COBRA premiums due for group health insurance coverage for up to
eighteen months while the employee remains unemployed. If the employee remains
unemployed at the end of eighteen 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 while

the employee remains unemployed. Outplacement services are provided or, at the
employee's election, a lump-sum payment of 10% of the employee's annual base
salary will be made to the employee in lieu of those services. Additionally, the
employee's beneficiary will receive a lump-sum death benefit equivalent to six
months of the employee's base salary should the employee die while entitled to
enhanced severance payments.

CHANGE OF CONTROL EMPLOYMENT AGREEMENTS

LII has entered into change of control employment agreements with the named
executive officers, which are identical except for the name of the named
executive officer who is a party to the agreement and the date of the agreement.
The change of control agreements provide for certain benefits under specified
circumstances if the officer's employment is terminated following a change of
control transaction involving LII. The change of control agreements are intended
to provide protections to the officers that are not afforded by their existing
employment agreements, but not to duplicate benefits provided by the existing
employment agreements. The term of the change of control agreements is generally
two years from the date of a potential change of control, as discussed below, or
a change of control. If the officer remains employed at the conclusion of such
term, the officer's existing employment agreement will continue to apply. The
employment rights of the named executive officers under the change of control
agreements would be triggered by either a change of control or a potential
change of control. Following a potential change of control, the term of the
change of control agreement may terminate but the change of control agreement
will remain in force and a new term of the agreement will apply to any future
change of control or potential change of control, if either (a) the Board of
Directors determines that a change of control is not likely or (b) the named
executive officer, upon proper notice to LII, elects to terminate his term of
the change of control agreement as of any anniversary of the potential change of
control.

A "change of control" generally includes the occurrence of any of the
following:

(a) any person, other than specified exempt persons, including LII
and its subsidiaries and employee benefit plans, becoming a beneficial
owner of 35% or more of the shares of LII voting securities;

(b) a change in the identity of a majority of the Board of Directors,
unless approved by a majority of the incumbent members of the Board of
Directors;

(1) existing stockholders would own 65% or less of the voting
securities of the surviving entity;

(2) a person, other than specified exempt persons, would own 35%
or more of the voting securities of the surviving entity;

(3) less than a majority of the board of the surviving entity
would consist of the then incumbent members of the Board of Directors;
or

(d) approval by the stockholders of a liquidation or dissolution of
LII, unless such liquidation or dissolution involves a sale to a company of
which following such transaction:

(1) more than 65% of the voting securities of such company would
be owned by existing stockholders;

(2) no person, other than specified exempt persons, would own 35%
or more of the voting securities of such company; and

(3) at least a majority of the board of directors of such company
would consist of the then incumbent members of the board of directors.

A "potential change in control" generally includes any of the following:

- commencement of a tender or exchange offer for voting stock that, if
consummated, would result in a change of control;

- LII entering into an agreement which, if consummated, would constitute a
change of control;

- commencement of a contested election contest subject to proxy rules; or

- occurrence of any other event that the Board of Directors determines
could result in a change of control.

During the term of the change of control agreement, an officer's position,
authority, duties and responsibilities may not be diminished, and all forms of
compensation, including salary, bonus, regular salaried employee plan benefits,
stock options, restricted stock and other awards, must continue on a basis no
less favorable than at the beginning of the term of the change of control
agreement and, in the case of specified benefits, must continue on a basis no
less favorable in the aggregate than the most favorable application of such
benefits to any of LII's employees.

If an officer terminates employment during the term of the change of
control agreement for good reason or for any reason during a window period (the
90-day period commencing 366 days after any change of control), LII will pay the
officer:

- his then unpaid current salary and a pro rata portion of the highest
bonus earned during the preceding three years, as well as previously
deferred compensation and accrued vacation time;

- a lump-sum cash payment equal to the sum of three times the officer's
annual base salary and three times the highest annual bonus paid or
awarded to the officer during the preceding three fiscal years;

- a lump-sum cash payment equal to the sum of three times the officer's
annual base salary and three times the highest annual bonus paid or
awarded during the preceding three fiscal years, to reflect the equity
component of the officer's compensation;

- a lump-sum cash payment equal to the sum of 15% of the officer's annual
base salary, in lieu of outplacement services, and three times 15% of the
annual base salary that would have been paid or awarded to the officer
during the fiscal year that includes the date of termination, for the
perquisites component of the officer's compensation;

- for purposes of LII's supplemental retirement plan and LII's profit
sharing restoration plan, three additional years added to both his
service and age criteria; and

- continued coverage under LII's employee welfare benefits plans for up to
four and one-half years.

In addition, all options, restricted stock and other compensatory awards
held by the officer will immediately vest and become exercisable, and the term
of these awards will be extended for up to three years following termination of
employment. The officer may also elect to cash out equity-based compensatory
awards at the highest price per share paid by specified persons during the term
of the change of control agreement or the six-month period prior to the
beginning of the term of the change of control agreement.

In the event of any contest concerning a change of control agreement,
unless the officer's claim is found by a court to be frivolous, LII has no right
of offset, the officer is not required to mitigate damages, and LII agrees to
pay any legal fees incurred by the officer in connection with such contest.

LII also agrees to pay all amounts owing to the officer during any period
of dispute, subject only to the officer's agreement to repay any amounts to
which he is determined not to be entitled. The change of control agreements
provide for a tax gross-up in the event that specified excise taxes are
applicable to payments made by LII under a change of control agreement or
otherwise. The change of control agreements require the officer to maintain the
confidentiality of LII's information, and, for a period of

24 months following his termination of employment, to avoid any attempts to
induce LII's employees to terminate their employment with LII.

INDEMNIFICATION AGREEMENTS

LII has entered into indemnification agreements with its Directors and a
number of its executive officers. Each of the indemnification agreements is
identical except for the name of the Director or executive officer who is a
party to the agreement and the date of the agreement. Under the terms of the
indemnification agreements, LII has generally agreed to indemnify, and advance
expenses to, each indemnitee to the fullest extent permitted by applicable law
on the date of the agreements and to such greater extent as applicable law may
at a future time permit. In addition, the indemnification agreements contain
specific provisions pursuant to which LII has agreed to indemnify each
indemnitee:

- if such person is, by reason of his or her status as a Director, nominee
for Director, officer, agent or fiduciary of LII or of any other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise with which such person was serving at LII's request, any
such status being referred to as a "corporate status," made or threatened
to be made a party to any threatened, pending or completed action, suit,
arbitration, alternative dispute resolution mechanism, investigation or
other proceeding, other than a proceeding by or in the right of LII;

- if such person is, by reason of his or her corporate status, made or
threatened to be made a party to any proceeding brought by or in the
right of LII to procure a judgment in its favor, except that no
indemnification shall be made in respect of any claim, issue or matter in
such proceeding as to which such indemnitee shall have been adjudged to
be liable to LII if applicable law prohibits such indemnification, unless
and only to the extent that a court shall otherwise determine;

- against expenses actually and reasonably incurred by such person or on
his or her behalf in connection with any proceeding to which such
indemnitee was or is a party by reason of his or her corporate status and
in which such indemnitee is successful, on the merits or otherwise;

- against expenses actually and reasonably incurred by such person or on
his or her behalf in connection with a proceeding to the extent that such
indemnitee is, by reason of his or her corporate status, a witness or
otherwise participates in any proceeding at a time when such person is
not a party in the proceeding; and

- against expenses actually and reasonably incurred by such person in
certain judicial adjudications of or awards in arbitration to enforce his
or her rights under the indemnification agreements.

In addition, under the terms of the indemnification agreements, LII has
agreed to pay all reasonable expenses incurred by or on behalf of an indemnitee
in connection with any proceeding, whether brought by or in the right of LII or
otherwise, in advance of any determination with respect to entitlement to
indemnification and within 15 days after the receipt by LII of a written request
from such indemnitee for such payment. In the indemnification agreements, each
indemnitee has agreed that he or she will reimburse and repay LII for any
expenses so advanced to the extent that it shall ultimately be determined that
he or she is not entitled to be indemnified by LII against such expenses.

The indemnification agreements also include provisions that specify the
procedures and presumptions, which are to be employed to determine whether an
indemnitee is entitled to indemnification. In some cases, the nature of the
procedures specified in the indemnification agreements varies depending on
whether LII has undergone a change in control.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

John W. Norris, Jr., LII's Chairman of the Board, David H. Anderson,
Stephen R. Booth, Thomas W. Booth, David V. Brown and John W. Norris III, each a
Director of LII, as well as other LII Stockholders, who may be immediate family
members of the foregoing persons, are, individually or through trust
arrangements, members of AOC Land Investment, L.L.C. AOC Land Investment, L.L.C.
owns 70% of AOC Development II, L.L.C., which owns substantially all of One Lake
Park, L.L.C. LII is leasing part of an office building owned by One Lake Park,
L.L.C. for use as the LII corporate headquarters. The lease, initiated in 1999,
has a term of 25 years and the lease payments for 2002 totaled approximately
$2.9 million. LII also leased a portion of Lennox Center, a retail complex owned
by AOC Development, L.L.C., for use as offices. The Lennox Center lease had a
term of three years and the lease payments for 2002 totaled approximately
$122,580. AOC Land Investment, L.L.C. also owns 70% of AOC Development, L.L.C.
LII believes that the terms of its leases with One Lake Park, L.L.C. and AOC
Development, L.L.C. are comparable to terms that could be obtained from
unaffiliated third parties.

Previously, LII has entered into stock disposition agreements, which
allowed its executive officers, Directors, and Stockholders to borrow money and
use its capital stock held by them as collateral. The stock disposition
agreements provided that in the event of a default on the underlying loan, LII
would do one of several things, including registering the capital stock under
the Securities Act of 1933, finding a buyer to purchase the stock or purchasing
the stock itself. There was never a default under any of these agreements. The
sole outstanding stock disposition agreement, which covered 150,000 shares of
LII commons stock, was terminated on December 31, 2002 and LII will not enter
into these types of agreements in the future.

These transactions were not the result of arms-length negotiations.
Accordingly, certain of the terms of these transactions may be more or less
favorable to LII than might have been obtained from unaffiliated third parties.
LII does not intend to enter into any future transactions in which its
Directors, executive officers or principal Stockholders and their affiliates
have a material interest unless such transactions are approved by a majority of
the disinterested members of its Board of Directors and are on terms that are no
less favorable to it than those that it could obtain from unaffiliated third
parties.

OWNERSHIP OF LII COMMON STOCK

The following table contains information regarding the beneficial ownership
of LII common stock as of March 1, 2003 by the following individuals:

- each person known by LII to own more than 5% of the outstanding shares of
LII common stock;

- each of LII's Directors;

- each named executive officer of LII; and

- all executive officers and Directors of LII as a group.

All persons listed have an address in care of LII's principal executive
offices which are located at 2140 Lake Park Boulevard, Richardson, Texas 75080.

The information contained in this table reflects "beneficial ownership" as
defined in Rule 13d-3 of the Securities Exchange Act of 1934. In computing the
number of shares beneficially owned by a person and the percentage ownership of
that person, shares of our common stock subject to options held by that person
that were exercisable on March 1, 2003 or would be exercisable within 60 days
following March 1, 2003 are considered outstanding. However, such shares are not
considered outstanding for the purpose of computing the percentage ownership of
any other person. To our knowledge and unless otherwise indicated, each
Stockholder has sole voting and investment power over the shares listed as
beneficially owned by such Stockholder, subject to community property laws where
applicable. Percentage of ownership is based on 58,007,567 shares of common
stock outstanding as of March 1, 2003.

SHARES BENEFICIALLY OWNED
-------------------------
BENEFICIAL OWNER NUMBER PERCENTAGE
---------------- ----------- -----------

John W. Norris, Jr.(1)(2)................................... 4,630,299 7.89
Robert E. Schjerven(2)...................................... 946,839 1.62
Harry J. Ashenhurst, Ph.D.(2)............................... 425,439 *
Linda G. Alvarado(2)(3)..................................... 162,436 *
David H. Anderson(2)(4)..................................... 3,294,439 5.66
Steven R. Booth(2)(5)....................................... 2,890,180 4.98
Thomas W. Booth(2)(6)....................................... 2,954,313 5.09
David V. Brown(2)(7)........................................ 1,367,355 2.35
James J. Byrne(2)........................................... 190,539 *
Janet K. Cooper(2).......................................... 37,925 *
Carl E. Edwards, Jr.(2)..................................... 451,770 *
C. L. (Jerry) Henry(2)...................................... 20,718 *
John E. Major(2)............................................ 178,412 *
John W. Norris III(2)(8).................................... 340,780 *
William G. Roth(2)(9)....................................... 30,595 *
Richard A. Smith(2)......................................... 170,127 *
Terry D. Stinson(2)......................................... 42,227 *
Richard L. Thompson(2)...................................... 143,324 *
All executive officers and directors as a group (24
persons)(2)............................................... 14,303,533 24.7

---------------

* Less than 1%

(1) Includes: (a) 321,750 shares held by the Robert W. Norris Trust A, 321,750
shares held by the John W. Norris, Jr. Trust A., and 663,135 shares held by
the Megan E. Norris Trust A., each of

which Mr. Norris is a co-trustee; and (b) 2,643,837 shares held by the
Norris Family Limited Partnership, of which Mr. Norris is General Partner.

(2) Includes the following shares subject to options: Mr. Norris,
Jr. -- 679,827; Mr. Schjerven -- 419,573; Dr. Ashenhurst -- 203,096; Ms.
Alvarado -- 154,078; Mr. Anderson -- 149,078; Mr. S. Booth -- 3,783; Mr. T.
Booth -- 27,997; Mr. Brown -- 154,078; Mr. Byrne -- 154,078; Ms.
Cooper -- 27,028; Mr. Edwards -- 203,096; Mr. Henry -- 13,871; Mr.
Major -- 154,078; Mr. Norris III -- 3,783; Mr. Roth -- 13,871; Mr. R.
Smith -- 89,034; Mr. Stinson -- 27,028; Mr. Thompson -- 69,928; and all
executive officers and Directors as a group -- 3,060,162.

(3) Includes 8,174 shares held by Cimarron Holdings, LLC.

(4) Includes 3,145,361 shares held by the David H. Anderson Trust.

(5) Includes (a) 2,007,956 shares held by trusts for the benefit of Mr. R.
Booth, 642,741 shares held by the Steven R. Booth Trust, and 141,932 shares
held by The Booth Family Charitable Lead Annuity Trust, each of which Mr.
Booth is a co-trustee, and (b) 83,446 shares held by Mr. Booth's minor
children.

(6) Includes: (a) 2,007,956 shares held by trusts for the benefit of Mr. R.
Booth, 40,062 shares held by the Thomas W. Booth Trust, and 141,932 shares
held by The Booth Family Charitable Lead Annuity Trust, each of which Mr.
Booth is a co-trustee, and (b) 76,051 shares held by Mr. Booth's minor
children.

(7) Includes 315,117 shares held by Mr. Brown's minor children.

(8) Includes (a) 4,987 shares held by the W.H. Norris Trust, 4,987 shares held
by the B.W. Norris Trust, and 4,063 shares held by the L.C. Norris Trust,
each of which Mr. Norris is a trustee; (b) 26,438 shares (Mr. Norris' 1%
beneficiary of the 2,643,837 shares held by the Norris Family Limited
Partnership); and (c) 31,768 shares held by Mr. Norris' minor children.

(9) Includes 6,000 shares held by spouse.

COMPARISON OF TOTAL STOCKHOLDER RETURN

The following graph compares the cumulative total returns of LII, the
Standard & Poor's Small-Cap 600 Index and a peer group of U.S. industrial
manufacturing and service companies in the heating, ventilation, air
conditioning and refrigeration businesses from July 29, 1999, the date of the
LII initial public offering, through December 31, 2002. The chart assumes that
$100 was invested on July 29, 1999, with dividends reinvested. Peer group
returns are weighted by market capitalization. The peer group includes AAON,
Inc., American Standard Companies Inc., Comfort Systems USA, Inc., Maytag
Corporation, Modine Corporation, Watsco, Inc., Whirlpool Corporation, and York
International Corporation.

(PERFORMANCE GRAPH)

--------------------------------------------------------------------------------------------------------
7/29/99 12/31/99 12/31/00 12/31/01 12/31/02
--------------------------------------------------------------------------------------------------------

Lennox International Inc. 100.00 49.73 43.57 56.68 75.32
S&P 500 100.00 107.71 97.90 86.27 67.20
S&P SMALLCAP 600 100.00 107.02 119.65 127.47 108.83
Peer Group 100.00 78.76 66.30 88.39 77.63

ADDITIONAL INFORMATION

QUORUM REQUIRED

A quorum of LII Stockholders is necessary to have a valid meeting of
Stockholders. A majority of the shares of LII common stock issued and
outstanding and entitled to vote on the record date must be represented in
person or by proxy at the Annual Meeting in order for a quorum to be
established. Abstentions and broker "non-votes" count as present for
establishing a quorum. Shares held by LII in its treasury or by any
majority-owned subsidiary or LII do not count toward a quorum. A broker non-vote
occurs on an item when a broker is not permitted to vote on that item without
instruction from the beneficial owner of the shares and no instruction is given.
We expect, in the event that a quorum is not present at the Annual Meeting, the
meeting will be adjourned or postponed to solicit additional proxies.

VOTE REQUIRED

Only Stockholders of record at the close of business on March 24, 2003 are
entitled to notice of and to vote at the meeting. There were 58,037,371 shares
of common stock of LII outstanding at the close of business on that date, all of
which will be entitled to vote. Holders of shares of common stock are entitled
to one vote per share held of record in their names on the record date on all
matters. Stockholders do not have cumulative voting rights. The election of each
Director requires a plurality of the votes cast. Votes withheld will be deemed
not to have been cast. Abstentions and broker non-votes have no effect on
determinations of plurality, except to the extent that they affect the total
votes received by any particular candidate or proposal.

SHARES HELD IN STREET NAME

Under the applicable rules of the New York Stock Exchange, brokers who hold
shares in "street names" (i.e., in the name of a broker, bank or other record
holder) for customers who are the beneficial owners of those shares may be
prohibited from giving a proxy to vote those customers' shares with respect to
the proposals to be voted on at the Annual Meeting in the absence of specific
instructions from the customer. LII Stockholders whose shares are held in street
name must either direct the record holder of their shares as to how to vote
their shares or obtain a proxy from the record holder to vote at the Annual
Meeting.

TELEPHONE AND INTERNET VOTING

Shares Directly Registered in the Name of the Stockholder. Stockholders
with shares registered directly with Mellon Investor Services may vote by
telephone by calling Mellon Investor Services at (800) 435-6710 or by Internet
at http://www.eproxy.com/lii.

Shares Registered in the Name of a Brokerage Firm or Bank. A number of
brokerage firms and banks offer telephone and Internet voting options. These
programs differ from the program provided by Mellon Investor Services for shares
registered in the name of the Stockholder. Check the information forwarded by
your bank, broker or other holder of record to see which options are available
to you.

REVOKING PROXIES

LII Stockholders of record may revoke their proxies at any time prior to
the time their proxies are voted at the Annual Meeting. Proxies may be revoked
by written notice, including by telegram or facsimile, to the Secretary of LII,
by a later-dated proxy signed and returned by mail or by attending LII's Annual
Meeting and voting in person. Attendance at the Annual Meeting will not in and
of itself constitute a revocation of a proxy. Any written notice of a revocation
of a proxy must be sent so as to be delivered before the taking of the vote at
the Annual Meeting to:

Lennox International Inc.
2140 Lake Park Blvd.
Richardson, TX 75080
Facsimile: (972) 497-6660
Attention: Carl E. Edwards, Jr.

OTHER BUSINESS; ADJOURNMENTS

We are not aware of any other business to be acted upon at the Annual
Meeting. If, however, other matters are properly brought before the meeting, or
any adjourned meeting, your proxies will have discretion to act on those matters
or to adjourn the meeting, according to their best judgment. Adjournment of the
Annual Meeting may be made for the purpose of, among other things, soliciting
additional proxies. Any adjournment may be made at any time by Stockholders
representing a majority of the votes present in person or by proxy at the
applicable special meeting, whether or not a quorum exists, without further
notice other than by an announcement made at the meeting.

PROXY SOLICITATION

The cost of solicitation of proxies will be paid by LII. In addition to
solicitation by mail, the Directors, officers and employees of LII may also
solicit proxies from Stockholders by telephone, facsimile, telegram, electronic
mail or in person. We will also make arrangements with brokerage houses and
other custodians, nominees and fiduciaries to send the proxy materials to
beneficial owners. Upon request, we will reimburse those brokerage houses and
custodians for their reasonable expenses in so doing.

STOCKHOLDER PROPOSALS

If you wish to submit a proposal for possible inclusion in our 2004 proxy
material, we must receive your notice, in accordance with rules of the
Securities and Exchange Commission, on or before January 15, 2004. If you wish
to submit a proposal at the 2004 Annual Meeting (but not seek inclusion of the
proposal in our proxy material), we must receive your notice, in accordance with
the LII Bylaws, not less than 60 nor more than 90 days in advance of such
meeting.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16 of the Securities Exchange Act of 1934 requires LII's Directors
and executive officers and any person owning more than 10% of LII common stock
to file reports of ownership and changes in ownership of LII common stock with
the Securities and Exchange Commission and to furnish LII with copies of these
reports. Based solely upon a review of the reports and related information
furnished to LII, LII believes all filing requirements applicable to its
officers, Directors and greater than ten-percent beneficial owners were complied
with.

INDEPENDENT AUDITORS

As recommended by LII's Audit Committee, on May 20, 2002, LII's Board of
Directors approved the replacement of Arthur Andersen LLP ("Andersen") as LII's
independent auditors and the

appointment of KPMG LLP to serve as LII's independent public accountants for the
year ending December 31, 2002.

Andersen's reports on LII's consolidated financial statements for each of
the years ended December 31, 2001 and 2000 did not contain an adverse opinion or
disclaimer of opinion, nor were such reports qualified or modified as to
uncertainty, audit scope or accounting principles.

During the years ended December 31, 2001 and 2000 and the subsequent
interim period through May 20, 2002, there were no disagreements with Andersen
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which, if not resolved to Andersen's
satisfaction, would have caused them to make reference to the subject matter in
connection with their report of LII's consolidated financial statements for such
years and the subsequent interim period; and there were no reportable events, as
listed in Item 304(a)(1)(v) of Regulation S-K.

At the time of Andersen's replacement, LII provided Andersen with a copy of
the foregoing and a letter from Andersen confirming its agreement with these
disclosures was filed as an exhibit to LII's Current Report on Form 8-K dated
May 20, 2002.

During LII's two most recent fiscal years and the subsequent interim period
through May 20, 2002, LII did not consult KPMG LLP with respect to the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
LII's consolidated financial statements, or any other matters or reportable
events listed in Items 304(a)(2)(i) and (ii) of Regulation S-K.

A representative of KPMG LLP will attend the annual meeting and will have
the opportunity to make a statement and to respond to appropriate questions.

Audit Fees. KPMG LLP billed an aggregate of $880,000 for professional
services rendered by that firm in respect of its audit of LII's annual financial
statements for 2002 and its review of financial statements included in LII's
Quarterly Reports on Form 10-Q for the quarters ended June 30, 2002 and
September 20, 2002. In addition, LII's former auditors, Andersen billed LII an
aggregate of $8,000 for professional services rendered for the review of
financial statements included in the LII Quarterly Report on Form 10-Q for the
quarter ended March 31, 2002.

Financial Information Systems Design and Implementation Fees. No amounts
were billed by KPMG LLP in respect of any financial information systems design
and implementation services for 2002, and KPMG LLP provided no such services to
LII during such year.

All Other Fees. KPMG LLP billed an aggregate of $261,000 for all other
professional services rendered in 2002. This aggregate amount includes audit
related fees of $54,000 and non-audit services of $207,000. Audit related fees
consisted of accounting consultation and attestation services traditionally
performed by the auditor. Non-audit services consisted of tax compliance and
consulting services. The Audit Committee has considered the compatibility of
these services with the auditors' independence.

By Order of the Board of Directors

/s/ E. Edwards, Jr.
Carl E. Edwards, Jr.
Executive Vice President,
Chief Legal Officer and Secretary

Richardson, Texas
April 16, 2003

APPENDIX A

LENNOX INTERNATIONAL INC.

AUDIT COMMITTEE
CHARTER

PURPOSE

The purpose of the Audit Committee is to assist the Board of Directors in
fulfilling its oversight responsibilities by reviewing the Company's financial
reporting process, the system of internal control, the audit process, and the
Company's process for monitoring compliance with laws and regulations and the
Company's policies. In performing its role, the Audit Committee will maintain
effective working relationships with the Board of Directors, management, the
internal auditors and the independent accountants.

The Audit Committee shall prepare the report required by the rules of the
Securities and Exchange Commission (the "Commission") to be included in the
Company's annual proxy statement.

ORGANIZATION

The Audit Committee shall be comprised of no less than three Directors. The
members of the Audit Committee shall meet the independence and experience
requirements of the New York Stock Exchange, Section 10A of the Securities
Exchange Act of 1934 (the "Exchange Act"), as amended by the Sarbanes-Oxley Act
of 2002, and the rules and regulations of the Commission. All members of the
Audit Committee shall be financially literate and at least one member of the
Audit Committee shall be an "audit committee financial expert" as defined by the
Commission. Audit Committee members shall not simultaneously serve on the audit
committees of more than two other public companies.

The Board shall appoint the members of the Audit Committee annually,
considering the recommendation of the Governance Committee. The members of the
Audit Committee shall serve until their successors are appointed and qualify.
The Board of Directors will appoint one Audit Committee member to serve as the
Committee Chairman. The Board shall have the power at any time to change the
membership of the Audit Committee and to fill vacancies in it, subject to such
member(s) satisfying the independence, experience and financial expertise
requirements referred to above. The Audit Committee shall meet when called by
the Chairman, but at least four times per year. The Audit Committee may request
any officer or employee of the Company or the Company's outside counsel or
independent accountant to attend a meeting of the Committee or to meet with any
members of, or consultants to, the Committee.

DUTIES AND RESPONSIBILITIES

To fulfill its duties and responsibilities, the Audit Committee shall:

General Responsibilities

- Assist the Board of Directors in satisfying its responsibilities to the
shareholders with respect to matters relating to the Company's
accounting, financial reporting, audit, legal compliance and internal
control practices.

- Report Committee actions to the Board of Directors on a regular basis
with such recommendations, as the Committee may deem appropriate.

March, 2003
A-1

- Meet at least annually with the senior internal auditing executive,
management and the independent accountants in separate executive
sessions to discuss any matters that the Committee or they believe
should be discussed privately with the Audit Committee.

- Perform the functions assigned to the Committee by the Company's
charter or bylaws, or the Board of Directors.

- Review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board of Directors for approval.

- Review at least annually the Audit Committee's own performance.

Internal Control

- Review with the Company's management, the independent accountant and
senior internal audit director, the Company's internal control
procedures, financial and accounting personnel and the adequacy and
effectiveness of the accounting and financial controls of the Company,
and elicit any recommendations for the improvement of such internal
control procedures or particular areas where new or more detailed
controls or procedures are desirable or necessary.

Financial Reporting Process

- Review with management and the independent accountants any significant
accounting and reporting issues made in connection with the preparation
of the Company's financial statements, including any significant
changes in the Company's selection or application of accounting
principles.

- Inquire of management, the independent accountants and the senior
internal auditing executive about the Company's significant risks and
exposures, and the steps management has taken to monitor and control
such exposures, including the Company's risk assessment and risk
management policies.

- Review and discuss with management and the independent accountant the
Company's annual audited financial statements, including disclosures
made in managements discussion and analysis, related footnotes and the
independent accountant's report, and resolve any questions with
management, and if required, the independent accountants.

- Review annual and/or quarterly filings with the SEC and other published
documents containing the Company's financial statements, and determine
whether the information contained in these documents is consistent with
that known to the Committee members.

- Review of the Company's interim financial information, including
disclosures made in managements discussion and analysis, with the
Company's management and the independent accountants for preparation in
accordance with applicable generally accepted auditing principles prior
to the inclusion of such information in the Company's Form 10-Q.

- Review and discuss quarterly reports from the independent auditors on
(a) all critical accounting policies and practices to be used, (b) all
alternative treatments of financial information within generally
accepted accounting principles that have been discussed with
management, ramifications of the use of such alternative disclosures
and treatments and the treatment preferred by the independent auditor,
and (c) other material written communications between the independent
auditor and management, such as any management letter or schedule of
unadjusted differences.

March, 2003
A-2

- Discuss with the independent accountant the matters required by
generally accepted auditing standards and the Securities and Exchange
Commission relating to the conduct of the audit, including any
difficulties encountered in the course of the audit work, any
restrictions on the scope of activities or access to requested
information, and any significant disagreements with management.

- Discuss with management the Company's earnings press releases,
including the use of "pro forma" or "adjusted" non-GAAP information, as
well as financial information and earnings guidance provided to
analysts and rating agencies.

- Discuss with management and the independent accountant the effect of
regulatory and accounting initiatives as well as off-balance sheet
structures impacting the Company.

- Review disclosures made to the Audit Committee and the independent
accountants by the Company's CEO and CFO during their certification
process for the Form 10-K and Form 10-Q about any significant
deficiencies in the design or operation of internal controls or
material weaknesses therein and any fraud involving management or other
employees who have a significant role in the Company's internal
controls and discuss with the independent accountants any issues that
arise from the attesting to the annual certifications.

Review of Process for Company Compliance with Laws, Regulations and Policies

- Review with the Company's counsel any contingent liabilities and/or
legal matters that could have a significant impact on the Company's
financial statements or the Company's compliance policies.

- Review the Company's process for determining risks and exposures from
asserted and unasserted litigation and claims.

- Review the Company's program for monitoring compliance with policies
and review any recurring events of non-compliance of a material nature.

- Discuss with management and the independent accountant any
correspondence with regulators or governmental agencies and any
published reports that raise material issues regarding the Company's
financial statements or accounting policies.

- Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal
accounting controls or auditing matters, and the confidential,
anonymous submission by employees of concerns regarding questionable
accounting or auditing matters.

- Obtain reports from the independent accountants, the internal auditors
and/or management regarding insider and affiliated party transactions
and regarding conformity by the Company and its subsidiaries with the
Company's code of business conduct and ethics.

- Obtain from the independent accountant assurance that Section 10A(b) of
the Exchange Act has not been implicated.

Internal Audit

- Review the appointment and replacement of the senior internal auditing
executive.

- Evaluate and approve the process for establishing the annual internal
audit plan and review such plan to determine that the plan is
sufficiently linked to the Company's overall business objectives and
associated risks.

March, 2003
A-3

- Review with the senior internal auditing executive and management the
following:

1. The Internal Audit Department Charter.

2. The Department structure, budget, staffing level and qualifications.

3. A summary of activities and significant findings during the year.

4. Any changes required in the scope of the audit plan.

- Review the overall effectiveness of the internal audit function and
review a summary of the significant reports to management prepared by
the internal auditing department and management's responses.

Independent Accountants

- Ensure that the independent accountants are ultimately accountable to
the Audit Committee and that the Audit Committee has the sole authority
to appoint or replace the independent accountants (subject, if
applicable, to shareholder ratification), approve the compensation of
the independent accountants for performing the annual audit, preapprove
all non-audit services with the independent accountants, and direct the
dismissal of the independent accountants when circumstances warrant
Committee action. The Company shall provide for appropriate funding, as
determined by the Audit Committee, for payment of compensation to the
independent accountant for the purpose of rendering or issuing an audit
report.

- Review the scope and approach of the annual audit with the independent
accountants, including their process for identifying and responding to
key audit and internal control risks.

- Review and evaluate the lead partner of the independent accountants
team.

- Obtain and review a report from the independent accountant at least
annually regarding (a) the independent accountants' internal
quality-control procedures, (b) any material issues raised by the most
recent internal quality-control review, or peer review, of the firm, or
by any inquiry or investigation by governmental or professional
authorities within the preceding five years respecting one or more
independent audits carried out by the firm, (c) any steps taken to deal
with any such issues, and (d) all relationships between the independent
accountants and the Company. Evaluate the qualifications, performance
and independence of the independent accountants, including considering
whether the accountants' quality controls are adequate and the
provision of permitted non-audit services is compatible with
maintaining the accountants' independence, and taking into account the
opinions of management and senior internal auditing director. The Audit
Committee shall present its conclusions with respect to the independent
accountants to the Board.

- Ensure the rotation as required by law of audit partners who are
members of the audit engagement team who have responsibility for
decision making on significant auditing, accounting, and reporting
matters that affect the financial statements of the Company, or who
maintain regular contact with management and the Audit Committee.

- Recommend to the Board policies for the Company's hiring of employees
or former employees of the independent accountants who participated in
any capacity in the audit of the Company.

- Discuss any issues that the independent accountant's audit team
conferred with the national office of the independent accountant.

March, 2003
A-4

REPORTING RESPONSIBILITIES

To satisfy its reporting responsibilities, the Audit Committee shall:

- Affirm annually, in writing, to the New York Stock Exchange that the
Audit Committee has:

1. Met and will continue to meet, the membership requirements.

2. Adopted a written charter.

3. Annually reviewed and reassessed the adequacy of the charter.

- Disclose in the Company's proxy statement that:

1. All Audit Committee members are independent.

2. The Audit Committee is governed by a written charter, and includes a
copy of the charter in the proxy as required by law.

3. Identify the Financial Expert(s) serving as Audit Committee
members(s), or state that there is no such member.

- Include in the Company's proxy statement a report from the Audit
Committee that states that it has:

1. Reviewed and discussed the Company's audited financial statements with
management and the independent accountant.

2. Discussed the quarterly financial statements, including the quality of
accounting principles, with management and the independent
accountants.

3. Received the required written independence disclosures from the
independent accountants.

4. Recommended to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K.

SPECIAL AUTHORITIES

The Audit Committee shall also have the power to conduct or authorize
investigations into any matters within the Committee's scope of responsibility.
The Committee shall have unrestricted access to members of management,
independent accountants and all information relevant to its responsibilities.
The Committee shall be empowered to retain independent counsel, accountants or
other advisors, as they deem appropriate from time to time. The Company shall
provide for appropriate funding, as determined by the Audit Committee, for
payment of compensation to any such independent counsel, accountant or other
advisor retained by the Audit Committee.

LIMITATION OF AUDIT COMMITTEE'S ROLE

While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Company's financial statements and disclosures
are complete and accurate and are in accordance with generally accepted
accounting principles and applicable rules and regulations of the Securities and
Exchange Commission and the New York Stock Exchange. These are the
responsibilities of management and the independent accountants.

March, 2003
A-5

LENNOX INTERNATIONAL INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 16, 2003
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The signatory of this Proxy, by execution on the reverse side of this Proxy,
hereby appoints and constitutes John W. Norris, Jr. and Carl E. Edwards, Jr.,
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
Common Stock entitled to be voted by the signatory at the Annual Meeting of
Stockholders to be held at 9:00 a.m., local time, on May 16, 2003, 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.

IMPORTANT - PLEASE SIGN AND DATE ON THE REVERSE SIDE AND RETURN PROMPTLY.

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 AND "AGAINST" PROPOSAL 2.

------------------------------------------------------------------------
ADDRESS CHANGE/COMMENTS (MARK THE CORRESPONDING BOX ON THE REVERSE SIDE)
------------------------------------------------------------------------

------------------------------------------------------------------------

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* FOLD AND DETACH HERE *

YOU CAN NOW ACCESS YOUR LENNOX INTERNATIONAL INC. ACCOUNT ONLINE.

Access your Lennox International Inc. shareholder account online via Investor
ServiceDirect(R)(ISD).

Mellon Investor Services LLC, agent for Lennox International Inc., now makes it
easy and convenient to get current information on your shareholder account.
After a simple, and secure process of establishing a Personal Identification
Number (PIN), you are ready to log in and access your account to:

o View account status

o View certificate history

o View book-entry information

o View payment history for dividends

o Make address changes

o Obtain a duplicate 1099 tax form

o Establish/change your PIN

VISIT US ON THE WEB AT http://www.melloninvestor.com
AND FOLLOW THE INSTRUCTIONS SHOWN ON THIS PAGE.

STEP 1: FIRST TIME USERS - ESTABLISH A PIN

You must first establish a Personal Identification Number (PIN) online by
following the directions provided in the upper right portion of the web screen
as follows. You will also need your Social Security Number (SSN) or Investor ID
available to establish a PIN.

THE CONFIDENTIALITY OF YOUR PERSONAL INFORMATION IS PROTECTED USING SECURE
SOCKET LAYER (SSL) TECHNOLOGY.

o SSN or Investor ID

o PIN

o Then click on the ESTABLISH PIN button

Please be sure to remember your PIN, or maintain it in a secure place for future
reference.

STEP 2: LOG IN FOR ACCOUNT ACCESS

You are now ready to log in. To access your account please enter your:

o SSN or Investor ID

o PIN

o Then click on the SUBMIT button

If you have more than one account, you will now be asked to select the
appropriate account.

STEP 3: ACCOUNT STATUS SCREEN

You are now ready to access your account information. Click on the appropriate
button to view or initiate transactions.

o Certificate History

o Book-Entry Information

o Issue Certificate

o Payment History

o Address Change

o Duplicate 1099

FOR TECHNICAL ASSISTANCE CALL 1-877-978-7778 BETWEEN
9AM-7PM MONDAY-FRIDAY EASTERN TIME

THIS PROXY WILL BE VOTED AS DIRECTED BELOW, OR IF NO DIRECTION IS
INDICATED, WILL BE VOTED "FOR" ALL NOMINEES LISTED IN PROPOSAL 1 AND
"AGAINST" PROPOSAL 2. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
PROPOSAL 1 AND "AGAINST" PROPOSAL 2.

Please [ ]
Mark Here
for Address
Change or
Comments
SEE REVERSE SIDE

1. Election of the following nominees to serve as directors for a term
expiring in 2006:

01 Linda G. Alvarado, 02 Steven R. Booth, 03 David V. Brown,
04 John E. Major and 05 Walden W. O'Dell

INSTRUCTIONS: To withhold authority to vote for any individual nominee mark the
"Exceptions" box and write that nominee's name in the space provided below.

--------------------------------------------------------------------------------

FOR WITHHOLD AUTHORITY
all nominees to vote for all
listed nominees listed EXCEPTIONS

[ ] [ ] [ ]

2. Proposal by Stockholders that the Board adopt an executive compensation
policy that all future stock option grants to senior executives shall be
indexed to industry performance.

FOR AGAINST ABSTAIN

[ ] [ ] [ ]

3. At the discretion of such Proxies on any other matter that may properly
come before the meeting or any adjournment thereof.

Please disregard if you have previously provided your consent decision.

I (WE) PLAN TO ATTEND THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 16, [ ]
2003.

By checking the box to the right, I consent to future delivery of [ ]
annual reports, proxy statements, prospectuses and other materials and
shareholder communications electronically via the Internet at a
webpage which will be disclosed to me. I understand that the Company
may no longer distribute printed materials to me from any future
shareholder meeting until such consent is revoked. I understand that I
may revoke my consent at any time by contacting the Company's transfer
agent, Mellon Investor Services LLC, Ridgefield Park, NJ and that
costs normally associated with electronic delivery, such as usage and
telephone charges as well as any costs I may incur in printing
documents, will be my responsibility.

Dated: , 2003
-------------------------------------------------------------------

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Signature

Please sign exactly as your name appears hereon. Executors, administrators,
guardians, and others signing in a fiduciary capacity should indicate such
capacity when signing. If shares are held jointly, each holder should sign. If a
corporation, please sign in full corporate name by duly authorized officer. If a
partnership, please sign in partnership name by authorized person.

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* FOLD AND DETACH HERE *

VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK

INTERNET AND TELEPHONE VOTING IS AVAILABLE THROUGH 11 PM EASTERN TIME
THE DAY PRIOR TO ANNUAL MEETING DAY.

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.

INTERNET
http://www.eproxy.com/lii

Use the Internet to vote your proxy. Have your proxy card in hand when you
access the web site. You will be prompted to enter your control number, located
in the box below, to create and submit an electronic ballot.

TELEPHONE
1-800-435-6710

Uses any touch-tone telephone to vote your proxy. Have your proxy card in hand
when you call. You will be prompted to enter your control number, located in
the box below, and then follow the directions given.

MAIL

Mark, sign and date your proxy card and return it in the
enclosed postage-paid envelope.

IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE,
YOU DO NOT NEED TO MAIL BACK YOUR PROXY CARD.

YOU CAN VIEW THE ANNUAL REPORT AND PROXY STATEMENT
ON THE INTERNET AT www.lennoxinternational.com
(http://www.lennoxinternational.com)
AND SELECT SEC FILINGS FROM THE FINANCIALS MENU.