LENNOX INTERNATIONAL INC
REVISED EMPLOYMENT CONTRACT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>ex10-1.txt
<DESCRIPTION>REVISED EMPLOYMENT CONTRACT
<TEXT>


                                                        EXHIBIT 10.1

                                  July 31, 2000

Employee
Address


Dear ______:

Lennox International Inc. ("Lennox") recognizes you as a key employee, important
to its future profitability,  growth and financial strength. Accordingly, Lennox
proposes to enter into an agreement with you to establish  certain terms of your
employment,  including a specified duration or term of employment, the basis for
your compensation and assignments, certain post-employment covenants, mechanisms
to resolve  disputes  and  certain  benefits  and income to you in the event you
leave  the  employ  of  Lennox  under  certain  specified   circumstances   (the
"Agreement").  We  believe  the  Agreement  benefits  both  you  and  Lennox  by
clarifying your employment relationship so that we all understand its terms. The
Agreement  provides you with greater certainty and security with various aspects
of your  employment  relationship,  as well as provides you with  information to
assist you with future financial  planning.  In that same regard,  the Agreement
assists Lennox in its own financial and business  planning.  The purpose of this
letter  is to  describe  the  terms of your  employment  with  Lennox  after the
effective date of this Agreement.  You had originally entered into an employment
agreement with Lennox,  dated  _____________ (the "Original  Agreement"),  which
both you and Lennox now wish to amend and restate as provided in this Agreement.
The  term  "Employee"  will be  used to  refer  to you in this  Agreement  where
appropriate.  The controlling  terms of this Agreement are set forth in the body
of this letter  Agreement as well as in the Exhibits to this Agreement which are
incorporated  by reference.  The specific terms of the Exhibits are  controlling
should there be any confusion or conflict between them and this letter. With the
signing by both  parties of this  Agreement,  you and Lennox will have agreed to
the following:

1.   NATURE OF  EMPLOYMENT.  You and  Lennox  have agreed  that your  employment
     relationship  with  Lennox  will no longer be "at will" and  terminable  by
     either party at any time.  Instead,  this employment  relationship  will be
     governed by the terms of this Agreement for as long as it remains in effect
     and even after its  termination  for any  provisions,  which by their terms
     survive.  The terms agreed upon by you and Lennox provide the consideration
     and  inducement  for each  party  to  enter  into  this  Agreement  and are
     described more fully throughout the body of this Agreement and the attached
     Exhibits A through C.


<PAGE>

2.   TERM OF AGREEMENT; TERMINATION DATE.  This  Agreement will become effective
     on the date of signing  this  Agreement  by both  parties  (the  "Effective
     Date") and the Original Agreement,  as now amended and restated, will be in
     effect  until  December  31 of that  year and  thereafter  for a series  of
     one-year terms.

3.   TERMINATION OF EMPLOYMENT.  Your employment with  Lennox  may be terminated
     for a  number  of  reasons  prior  to the  expiration  of any  term of this
     Agreement  as  described  below.  The  rights  of  each  party  under  each
     circumstance  will vary and are  described in the attached  Exhibits.  More
     specifically,  if Lennox  terminates  your  employment for any reason other
     than for  "Cause",  as  defined  in  Section  B.3 of Exhibit A, you will be
     entitled to receive,  in  addition  to any other  compensation  or benefits
     described in Section B.2 of Exhibit A,  severance  benefits  consisting  of
     either the Normal  Severance  Payment  defined in Section 2 of Exhibit C or
     the  Enhanced  Severance  Payment  defined  in  Section  3 of  Exhibit C as
     determined  by  those  provisions.  However,  the  provisions  of  Sections
     C.2(a)-(d) of Exhibit A will continue to be effective after the termination
     of this Agreement regardless of the reason for your termination.

     a.   TERMINATION BY EMPLOYEE. You may terminate your employment at any time
          upon 30 days  notice to Lennox  (or a lesser  period  if  approved  by
          Lennox) of your  intent to  terminate  or not to renew this  Agreement
          and, in that event,  Lennox  shall be  obligated  only to pay you your
          Base Salary and other  applicable  benefits  provided to  employees in
          your  position  that  are  effective  at the  time  of  the  voluntary
          resignation up to the effective date of the termination only.

     b.   TERMINATION FOR CAUSE. Lennox  may  terminate  your employment, at any
          time,  for  Cause,  as  defined  in  Section  B.3 of  Exhibit A, to be
          effective  immediately  upon delivery to you of notice of termination.
          If Lennox  terminates you for Cause,  you are only entitled to receive
          your Base Salary and other applicable  benefits  provided to employees
          in your  position  that are  effective at the time of  termination  up
          through the effective date of termination.

     c.   TERMINATION  OTHER  THAN  FOR  CAUSE.  Your  employment  may  also  be
          terminated  by  Lennox  other  than for  Cause at any time  (including
          Lennox'  non-renewal of the  Agreement)  but such a decision  triggers
          certain  defined  benefits  for you.  In the  event  Lennox  elects to
          terminate  you under this  provision,  Lennox agrees to pay either the
          Normal  Severance  Payment  as  defined  in Section 2 of Exhibit C or,
          solely at your option,  the Enhanced  Severance  Payment as defined in
          Section 3 of Exhibit C,  provided  you  comply  with all  requirements
          described in Section 3 of Exhibit C. These benefits are  contractually
          defined by this  Agreement and are not dependent on the other benefits
          policies of Lennox at the time of your termination.

     d.   TERMINATION AS A RESULT OF DISABILITY OR  DEATH.  Should  you  die  or
          become permanently disabled  (completely unable to perform your duties
          as defined in the

                                        2
<PAGE>

          benefit  plans of  Lennox)  during  the term of this  Agreement,  your
          employment  will be terminated  effective as of the date of your death
          or permanent disability.

     e.   WITHHOLDINGS FROM  PAYMENT/OFFSET.  Any  payments  made  by  Lennox to
          you under Section 3 will be subject to all  applicable  local,  state,
          federal or foreign taxes, including,  without limitation,  income tax,
          withholding tax, and social security tax.  Further,  to the extent you
          have, on the date of termination,  any outstanding  debts or financial
          obligations  to  Lennox,   including,   but  not  limited  to,  loans,
          overpayment  of wages,  bonuses or other forms of incentive  payments,
          unauthorized travel or purchasing expenses,  or theft of Lennox' funds
          or  property,  you agree  that  Lennox  shall be  entitled  to set off
          against  and  withhold  from such  payments  due you for such debts or
          obligations.

4.   NONPAYMENT UPON BREACH.  Notwithstanding  anything  in  this  Agreement  to
     the  contrary,  at any time after the date of  termination,  if you, by any
     intentional  or grossly  negligent  action or omission  to act,  breach any
     covenant,  agreement,  condition or obligation contained herein,  Lennox is
     entitled to cease  making any payments  and to cease  providing  any of the
     benefits to you under this  Agreement.  Additionally,  Lennox  reserves the
     right to seek repayment of any amounts previously paid hereunder along with
     recovery of any other damages caused by you.

5.   RESOLUTION  OF  DISPUTES.  In  the  event  that any  employment  dispute as
     defined in Section A of Exhibit B arises  between  Lennox and any Employee,
     the parties  involved  will make all  efforts to resolve  any such  dispute
     through  informal  means.  If these informal  attempts at resolution  fail,
     Lennox and the Employee  agree to and shall submit the dispute to final and
     binding arbitration pursuant to the policy and terms outlined in Exhibit B,
     to which the parties  expressly  agree to be bound.  The parties  fully and
     completely understand and agree that arbitration is the exclusive forum for
     all such arbitrable  disputes and that the parties are giving up all rights
     to a court trial or jury trial;  however,  the parties,  by agreeing to the
     policy for resolution of disputes outlined in Exhibit B are not waiving any
     substantive rights or remedies to which they would otherwise be entitled.

6.   WAIVER, MODIFICATION, AND  INTEGRATION. The  waiver  by any party hereto of
     a breach  of any  provision  of this  Agreement  shall  not  operate  or be
     construed  as a  waiver  of  any  subsequent  breach  by  any  party.  This
     Agreement,  which includes all Exhibits  referenced or attached,  expresses
     the entire agreement of the parties concerning matters contained herein and
     supersedes all prior and  contemporaneous  representations,  understandings
     and agreement,  either oral or in writing,  between the parties hereto with
     respect   to  such   matters   and  all  such   prior  or   contemporaneous
     representations,  understandings and agreements, both oral and written, are
     hereby terminated.  This Agreement may not be modified,  altered or amended
     except  by  written  agreement  of the  Employee  and the  Chief  Executive
     Officer,  except when the Chief Executive Officer is involved,  and in that
     event, an official designated by the Board of Directors for Lennox.

                                        3

<PAGE>


7.   BINDING  EFFECT.  This  Agreement  shall  be  binding  and  effective  upon
     Lennox and its  successors  and permitted  assigns,  and upon the Employee,
     Employee's heirs and  representatives.  The Employee hereby  represents and
     warrants to Lennox that Employee has not previously assumed any obligations
     inconsistent  with those  contained in this Agreement,  including,  but not
     limited to, covenants not to compete with another person, firm, corporation
     or other entity.

8.   GOVERNING LAW, VENUE AND PERSONAL  JURISDICTION.  It  is  the  intention of
     the parties that the laws of the State of Texas should  govern the validity
     of this Agreement, the construction of its terms, and the interpretation of
     the rights and duties of the parties  hereto.  The parties agree that venue
     for all disputes  shall be in Dallas  County,  Texas.  The parties  further
     agree to submit to personal jurisdiction in Dallas County, Texas.

                                         Sincerely,

                                         LENNOX INTERNATIONAL INC.


                                         By:      ______________________________
                                                       Robert E. Schjerven



ACCEPTED AND AGREED this ______ day of _______________, 2000.



EMPLOYEE

------------------------------
Signature

------------------------------
Printed Name


                                        4




<PAGE>


                                    EXHIBIT A

                               TERMS OF EMPLOYMENT


The following are the specific  agreements of Lennox and the Employee  providing
the  details  and  basis  for this  Agreement  and are  intended  by each as its
consideration to induce the other party to enter into this Agreement. Each party
agrees  that  the  consideration  provided  by the  other  is  adequate  for its
agreements to the following terms:

A.   RENEWAL.  On January 1  of  each  year (the  "Anniversary  Date") after the
     end of the first term and for each year thereafter,  this Agreement will be
     automatically  renewed for an additional year, unless either party notifies
     the other, in writing, at least 30 days prior to the Anniversary Date, that
     it does not wish to renew the Agreement.  No reason need be given by either
     party for the non-renewal of the Agreement.  If Lennox elects not to renew,
     however, Employee is nevertheless entitled to the benefits provided in this
     Agreement,  subject to all of its  provisions.  If  Employee  elects not to
     renew,  Employee will receive only those  benefits  provided upon voluntary
     termination as described in Section 3(a) of the letter agreement.

B.   AGREEMENTS BY LENNOX.

     1.   EMPLOYEE DUTIES. Lennox  will  assign  to the Employee such duties and
          responsibilities  that would appropriately be performed by an employee
          holding  Employee's  position and/or job title on a permanent basis as
          it deems consistent with the Employee's  qualifications and experience
          provided,  however, that Lennox can assign other duties on a temporary
          basis.  Lennox  retains  the right to change such duties and to change
          the  location  of the  Employee's  assignment  as and  when  it  deems
          appropriate.


     2.   EMPLOYEE  COMPENSATION.   Employee  shall  receive  a  salary  of that
          amount in effect at the initial effective or subsequent  renewal dates
          of  this  Agreement  (as may  be,  from  time  to  time,  adjusted  in
          accordance  with  Lennox'  applicable  salary  policies  which  may be
          changed by Lennox in its sole discretion),  payable in accordance with
          the then applicable  payroll  policies and subject to all required and
          authorized   withholdings  and  deductions   ("Base   Salary").   When
          calculated  on an annual  basis,  this is  referred  to as Annual Base
          Salary, and when calculated on a monthly basis, this is referred to as
          Monthly Base Salary.  The Base Salary will be set in  accordance  with
          Lennox' policy  regarding  salaries and will not be reduced during the
          annual term of the Agreement unless Employee's job duties are changed,
          in which  circumstance  Lennox reserves the right to lessen Employee's
          compensation by no more than ten percent for the remainder of the year
          without  such  change  amounting  to a breach or  termination  of this
          Agreement. Employee is also entitled to such short

                                       A1
<PAGE>

          term bonuses, stock options,  long-term incentive program payments and
          fringe  benefits  as are  applicable  to  employees  in your  position
          pursuant to Lennox' then applicable  policies and plans.  Benefits may
          be subject to periodic review and may be changed by Lennox in its sole
          discretion.

     3.   TERMINATION  FOR  CAUSE  DEFINED.  Lennox  may   terminate  Employee's
          employment, at any time, for Cause as set forth in Section 3(b) of the
          body of the Letter Agreement.  "Cause" is defined as (a) any violation
          by an  Employee  of Lennox'  written  policies as they may exist or be
          created or  modified  from time to time in the future,  including,  as
          examples and not as a limitation  of the policies to which an Employee
          may be  subject,  those  policies  prohibiting  discrimination  in the
          workplace,  including the prohibition of harassment,  on the ground of
          race, sex, religion,  age or any other prohibited basis; (b) any state
          or federal criminal conviction,  including,  but not limited to, entry
          of a plea of nolo contendere or deferred adjudication upon a felony or
          misdemeanor charge; (c) the commission by Employee of any material act
          of misconduct or dishonesty;  (d) any intentional or grossly negligent
          action or  omission to act which  breaches  any  covenant,  agreement,
          condition or obligation contained in this Agreement;  or (e) acts that
          in any way have a direct,  substantial  and adverse  effect on Lennox'
          reputation.

          Lennox'   termination  for  Cause  determination  is  subject  to  the
          Employee's  rights to a resolution of a dispute of that  determination
          as provided in Exhibit B of this Agreement.

     4.   PAYMENTS UPON  DISABILITY OR DEATH.  In  the event  Employee  dies  or
          becomes  permanently  disabled  during  the  term  of  the  Agreement,
          Employee or Employee's  designated  beneficiaries  will be entitled to
          the payments described in Section 3(c) of the Agreement, together with
          any other benefits provided to employees in an equivalent  position in
          effect at that time.  Should Employee die during the severance period,
          all  payments  of  severance  amounts  shall  cease  upon the later of
          Employee's  death or the expiration of the  twenty-fourth  month after
          the date of  Employee's  termination  in the  event the  employee  has
          agreed to the terms of the enhanced  severance  benefit.  Any payments
          after  Employee's  death  that  may be due  hereunder  will be paid to
          Employee's  beneficiary  named in  connection  with  Exhibit D of this
          Agreement,  or if no such designation has been made by Employee,  then
          to   Employee's    executors,    administrators,    heirs,    personal
          representatives, successors, or assigns, as the case may be.

C.   AGREEMENTS BY EMPLOYEE.

     1.   EFFORT AND  COOPERATION.  Employee  agrees  to  devote his or her full
          efforts and time to the  performance  of this Agreement and shall not,
          without the prior written consent of the Chief Executive  Officer,  or
          in the event the Chief Executive Officer is

                                        A2
<PAGE>


          involved, a designee assigned by the Board of Directors, engage in any
          other  employment,  business or other  activity that would  materially
          interfere  with  the  performance  of  his or her  duties  under  this
          Agreement.   Employee   further  agrees  that  following  his  or  her
          termination   from  employment,   Employee  will  provide   reasonable
          cooperation with and assistance to Lennox in all respects,  including,
          but  not  limited  to,  the  transition  of  his  or  her  duties  and
          responsibilities,  cooperation on any project for a reasonable  period
          not to exceed six months,  or any litigation  involving Lennox related
          to your  employment at Lennox at any time such  litigation  may occur.
          Lennox will reimburse the Employee any reasonable expenses incurred.

     2.   PROTECTIVE COVENANTS. Employee  recognizes  that Employee's employment
          by Lennox is one of the highest  trust and  confidence.  In return for
          the Employee's  agreement to the protective  covenants herein,  Lennox
          agrees that the (i)  Employee  will become  fully  familiar  with many
          aspects of Lennox'  business,  including  future  changes  customarily
          related to the performance of the duties of Employee's position during
          the term of the  Agreement,  (ii)  Employee  will be given  access  to
          proprietary  confidential  information  of Lennox or its customers and
          other  information  which is of special  and  peculiar  commercial  or
          competitive  value to Lennox or its  customers  for use in  connection
          with Lennox' business,  which proprietary  confidential information is
          for the sole and exclusive  benefit of Lennox,  (iii) Employee will be
          given  all  specialized  training  necessary  to  perform  his  or her
          assigned  duties,  and (iv)  Employee  will be provided  with  Lennox'
          goodwill in dealing with  customers,  vendors and  potential  business
          contacts.

          Employee  acknowledges  and agrees  that if any such  proprietary  and
          confidential  information  of either Lennox or its  customers  were to
          become known by any persons outside of Lennox with a need to have such
          information,  hardship,  loss or  irreparable  injury and damage could
          result to Lennox or its  customers  which  would be  difficult  if not
          impossible  to  measure.  Therefore,  Employee  agrees  that (i) it is
          necessary for Lennox to protect its business and that of its customers
          from such  damage,  (ii)  that the  information  is of a  confidential
          nature, (iii) that the following covenants constitute a reasonable and
          appropriate means, consistent with the best interests of both Employee
          and Lennox,  to protect  Lennox and its customers  against such damage
          and  to   protect   the  value  of  their   confidential   proprietary
          information, (iv) that the following covenants are agreed to as a term
          and condition of Employee's  continued  employment with Lennox and are
          supported by adequate  consideration  from Lennox, and (v) shall apply
          to and be binding upon Employee as provided herein:


               a.   TRADE SECRETS,  PROPRIETARY AND CONFIDENTIAL INFORMATION.
                    Employee will have access to, and contact with certain trade
                    secrets and  confidential  and  proprietary  information  of
                    Lennox,  including,   without  limitation,   unique  skills,
                    concepts, sales presentations, marketing programs, marketing
                    strategy,

                                        A3
<PAGE>


                    business  practices,  methods of operation,  systems,  sales
                    methods,   proposals,   customer   lists,   customer  leads,
                    documents  identifying  past,  present and future customers,
                    hiring and training  methods,  financial and other  customer
                    data, lists of agents,  and other  confidential  information
                    ("Trade Secrets").  Employee agrees to protect and safeguard
                    the Trade Secrets,  business practices, and confidential and
                    proprietary  information of Lennox.  Employee further agrees
                    and covenants  that,  except as may be required by Lennox in
                    connection  with this  Agreement,  or with the prior written
                    consent of Lennox,  Employee shall not, either during his or
                    her  employment  with  Lennox  or  thereafter,  directly  or
                    indirectly,  use  for  Employee's  own  benefit  or for  the
                    benefit of another, disclose,  disseminate, or distribute to
                    another,   any   Trade   Secret,   business   practice,   or
                    confidential  or  proprietary  information  (whether  or not
                    acquired,  learned, obtained, or developed by Employee alone
                    or in  conjunction  with others) of Lennox or of others with
                    whom Lennox has a business relationship. Such Trade Secrets,
                    business   practices,   and   confidential  and  proprietary
                    information   include,  but  are  not  limited  to,  Lennox'
                    patents,  trademarks,  licenses  and  technical  information
                    concerning  its  operations,   data  bases,   Lennox'  sales
                    information  and  marketing  strategy,   the  identities  of
                    Lennox' customers,  contractors,  suppliers, and others with
                    whom Lennox has a business relationship, Lennox arrangements
                    with such parties, Lennox' customer list and Lennox' pricing
                    policies  and  strategy.  All  memoranda,   notes,  records,
                    drawings,  documents,  or other  writings  whatsoever  made,
                    compiled,  acquired, or received by Employee during the term
                    of  Employee's  employment  with Lennox,  arising out of, in
                    connection  with,  or related to any activity or business of
                    Lennox,  including,  but not limited to, Lennox'  customers,
                    contractors,  suppliers,  or others  with whom  Lennox has a
                    business   relationship,   Lennox'  arrangements  with  such
                    parties, and Lennox' pricing policies and strategy, are, and
                    shall  continue  to be, the sole and  exclusive  property of
                    Lennox, and shall,  together with all copies thereof and all
                    advertising literature,  be returned and delivered to Lennox
                    by   Employee   immediately,   without   demand,   upon  the
                    termination  of the  Employee's  employment  with  Lennox or
                    shall be returned at any time upon Lennox demand.

               b.   RESTRICTIONS  ON  DIVERTING  EMPLOYEES  OF  LENNOX. Employee
                    agrees that during employment with Lennox,  and for a period
                    of 24 complete  calendar months following the termination of
                    employment,   Employee   will  not,   either   directly   or
                    indirectly,  call on,  solicit,  induce or attempt to induce
                    any of the employees or officers of Lennox that Employee had
                    knowledge   of  or   association   with  during   Employee's
                    employment with Lennox to terminate their  association  with
                    Lennox  either  personally  or through the efforts of his or
                    her subordinates.

                                        A4

<PAGE>


               c.   RESTRICTIONS ON DIVERTING VENDORS OR  CONTRACTORS.  Employee
                    agrees that during his or her  employment  with Lennox,  and
                    for a period of 24 complete calendar months following his or
                    her  termination  of employment,  Employee will not,  either
                    directly or indirectly,  call on, solicit,  or induce any of
                    Lennox' vendors or suppliers that Employee had contact with,
                    direct knowledge of through his or her position with Lennox,
                    or associated  with in the course of employment  with Lennox
                    to terminate their association with Lennox either personally
                    or through the efforts of his or her subordinates.

               d.   RESTRICTIONS  ON  SOLICITING  CUSTOMERS.  For a period of 24
                    calendar  months  following the  termination  of employment,
                    Employee will not directly or indirectly  call on,  service,
                    or solicit competing business or provide consulting services
                    regarding  the same from  customers of Lennox that  Employee
                    had (i) direct  contact  with or (ii) access to  information
                    and files  about as part of  Employee's  duties  with Lennox
                    within the previous 24 months.  This restriction is limited,
                    by  geography,   to  the  specific  places,   addresses,  or
                    locations where a covered  customer is present and available
                    for solicitation or servicing.

                    A competing  business  is defined as a business  that is the
                    same or so  substantially  similar in nature to Lennox so as
                    to have the possibility to affect or usurp Lennox'  business
                    opportunities.

               e.   REMEDIES.  In the  event of breach or  threatened  breach by
                    Employee of any  provision of Paragraph  C.2 hereof,  Lennox
                    shall be  entitled  to (i) cease  any  payments  under  this
                    Agreement  as set  forth  in  Section  4 of the  body of the
                    Agreement,  (ii)  relief  by  temporary  restraining  order,
                    temporary  injunction,  and/or permanent  injunction,  (iii)
                    recovery of all attorneys  fees and costs incurred by Lennox
                    in  obtaining  such  relief,  and (iv) any  other  legal and
                    equitable relief to which it may be entitled,  including any
                    and all  monetary  damages.  Lennox  has the right to pursue
                    partial   enforcement  and/or  to  seek  declaratory  relief
                    regarding the  enforceable  scope of this Agreement  without
                    penalty  and  without  waiving  Lennox'  right to pursue any
                    other available remedy.

               f.   SURVIVAL OF COVENANTS.  Each  covenant of Employee set forth
                    in Paragraph C.2 shall survive the termination of Employee's
                    employment. The existence of any claim or cause of action by
                    Employee  against Lennox,  whether related to this Agreement
                    or  otherwise,   shall  not  constitute  a  defense  to  the
                    enforcement  of the covenants in Paragraph C.2. In the event
                    an enforcement  remedy is necessary under Paragraph C.2, the
                    restricted time periods  provided for in Paragraph C.2 shall
                    commence on the date  enforcement  is

                                        A5

<PAGE>

                    ordered and complied  with by Employee and shall be extended
                    by the period of noncompliance.

               g.   ACKNOWLEDGMENT  OF ANCILLARY  AGREEMENTS AND  CONSIDERATION.
                    Employee  acknowledges that his or her agreement to be bound
                    by the  protective  covenants  set forth in Paragraph C.2 is
                    the  inducement for Lennox (i) to enter into the other terms
                    of  this  Agreement  (ii)  to  modify  existing   employment
                    agreements  or other  contracts,  if any,  affected  by this
                    Agreement,  (iii) to initiate or continue the  employment of
                    Employee  pursuant to the terms of this  Agreement,  (iv) to
                    provide  Employee with initial or continued use or access to
                    confidential  proprietary  information of Lennox, and (v) to
                    provide the Employee  with unique and  specialized  training
                    regarding  Lennox'  Trade  Secrets,  business  practices and
                    marketing  strategy,   to  provide  use  of  goodwill  as  a
                    representative of Lennox and to ensure business expertise in
                    developing  relations  with third parties.  Employee  agrees
                    that each agreement set forth in this Agreement is otherwise
                    enforceable and independently  sufficient to support all the
                    protective covenants in Paragraph C.2.

D.   SEVERABILITY. If any provision contained in this Agreement is determined to
     be Void,  illegal or  unenforceable,  in whole or in part,  then it will be
     treated as though it never was  contained  herein and all other  provisions
     shall remain in full force and effect.

E.   NOTICES.  All  communications  required  or allowed  under  this  Agreement
     shall be in writing and shall be deemed to have been  delivered on the date
     personally  delivered or on the date  deposited in the United States Postal
     Service,  postage  prepaid,  by certified mail,  return receipt  requested,
     addressed to you at the address provided above and to Lennox at:

                              Lennox International Inc.
                              2140 Lake Park Blvd.
                              Richardson, Texas 75080-2254
                              Attn: General Counsel

                                        A6
<PAGE>

                                    EXHIBIT B

                        POLICY FOR RESOLUTION OF DISPUTES


A.   AGREEMENT TO ARBITRATE.

     1.   ARBITRABLE  DISPUTES.  This Policy  covers any legal  dispute  between
          the  parties,  as set forth below,  except for Lennox's  right to seek
          enforcement of Employee's  protective covenants set forth in Paragraph
          C.2 of Exhibit A or Employee's claims related to workers  compensation
          and/or unemployment insurance. The disputes subject to this policy are
          all those  disputes  between  the parties  arising  from any breach or
          alleged breach of this Agreement or as to Employee's termination or as
          to any  allegation by the Employee that Lennox has violated any of the
          Employee's  rights under state or federal  employment  or civil rights
          laws,  or any  other  laws,  statutes  or  constitutional  provisions,
          including, but not limited to, the following:  unlawful discrimination
          or  harassment;  claims based on any purported  breach of  contractual
          obligations;  claims based on any purported  breach of duty arising in
          tort,  including  violations of public policy;  as well as any actions
          recognized under common law or the combination of any of these claims;
          and any claims  against  supervisors or agents of Lennox for which the
          supervisors  or agents  were  acting in the  course and scope of their
          employment or making any decisions or comments related to or connected
          with employment, even if the supervisor or agent was not acting within
          the course and scope of  employment,  shall be resolved in  accordance
          with the  provisions of this Policy for  Resolution of Disputes as set
          forth  herein.  All  arbitrable  disputes  are  subject to  applicable
          statutes of limitations and other affirmative  defenses  recognized by
          law.  Employee  or Lennox may seek a court  order to enforce or compel
          arbitration pursuant to the terms of this Policy.

     2.   ACCEPTANCE OF  POLICY.  By  accepting  or  continuing  employment with
          Lennox, for the provision of a term of employment  provided by Lennox,
          for  Lennox'  agreement  to pay a severance  package,  and for Lennox'
          agreement  to provide  Employee  access to  confidential  information,
          Employee and Lennox agree that arbitration is the exclusive remedy for
          all arbitrable disputes.

     3.   GOVERNING LAW/WAIVER OF RIGHTS. THIS POLICY AND AGREEMENT TO ARBITRATE
          IS MADE PURSUANT TO THE FEDERAL  ARBITRATION ACT AND APPLICABLE  STATE
          LAWS REGARDING  ARBITRATION  AND IS A FULL AND COMPLETE  WAIVER OF THE
          PARTIES' RIGHTS TO A CIVIL COURT ACTION AND RIGHTS TO A TRIAL BY JURY.

                                        B1
<PAGE>


B.   REQUEST FOR ARBITRATION.

     1.   ATTEMPT AT INFORMAL RESOLUTION OF DISPUTES.

          a.   Prior  to submission  of any  dispute to arbitration,  Lennox and
               the Employee  shall attempt to resolve the dispute  informally as
               set forth below.

          b.   Lennox  and  the  Employee  will  select  a  mutually  acceptable
               mediator  from  a  list  provided  by  an  American   Arbitration
               Association  Employment  Dispute Division or other similar agency
               who will assist the parties in  attempting  to reach a settlement
               of the dispute.  The mediator may make settlement  suggestions to
               the parties  but shall not have the power to impose a  settlement
               upon them.  If the dispute is resolved in  mediation,  the matter
               shall  be  deemed  closed.  If the  dispute  is not  resolved  in
               mediation  and goes to the next step (binding  arbitration),  any
               proposals  or  compromises  suggested by either of the parties or
               the mediator  shall not be referred to or have any bearing on the
               arbitration  procedure.  The  mediator  cannot  also serve as the
               arbitrator  in  the  subsequent  proceeding  unless  all  parties
               expressly agree in writing.

     2.   ARBITRATION PROCEDURES. The  Employee  or his/her representative  must
          submit a "Request for  Arbitration"  in writing to the Chief Executive
          Officer  of Lennox  within the  greater of 300 days or the  applicable
          statute of  limitation  that would apply if the claim had been brought
          in court of (i) the termination of employment (including resignation),
          (ii) the incident giving rise to the dispute or claim, or (iii) in the
          case of unlawful  discrimination,  including  sexual or other unlawful
          harassment,  the alleged  conduct.  This time  limitation  will not be
          extended for any reason and shall not be subject to tolling, equitable
          or  otherwise.  If the "Request for  Arbitration"  is not submitted in
          accordance with the aforementioned time limitations, the Employee will
          not be able to bring  his/her  claim to this or any other  forum.  The
          Employee  can obtain a "Request for  Arbitration"  form from the Human
          Resource  Department  of  Lennox  International  Inc.  or other  party
          designated by the Chief Executive Officer. Alternatively, the Employee
          can create his/her own "Request for  Arbitration"  form, as long as it
          clearly states "Request for Arbitration" at the beginning of the first
          page.  The  "Request  for  Arbitration"  must  include  the  following
          information:

          a.   A factual description  of the  dispute  in  sufficient  detail to
               advise Lennox of the nature of the dispute;

          b.   The date when the dispute first arose;

          c.   The names, work locations, telephone numbers of any co-workers or
               supervisors with knowledge of the dispute; and

                                        B2
<PAGE>


          d.   The relief requested by the Employee.

          Lennox  will  respond  in  a  timely   manner  to  this  "Request  for
          Arbitration,"  so that the parties can begin the process of  selecting
          an arbitrator. Such response may include any counterclaims that Lennox
          chooses to bring against the Employee.

     3.   SELECTION  OF THE ARBITRATOR.  All  disputes  will  be  resolved  by a
          single arbitrator.  The arbitrator will be mutually selected by Lennox
          and the Employee. If the parties cannot agree on an arbitrator, then a
          list of seven arbitrators, experienced in employment matters, shall be
          provided by the American Arbitration Association.  The arbitrator will
          be selected by the parties who will alternately  strike names from the
          list.  The last  name  remaining  on the list  will be the  arbitrator
          selected to resolve the dispute. Upon selection,  the arbitrator shall
          set an appropriate  time, date, and place for the  arbitration,  after
          conferring with the parties to the dispute.

     4.   ARBITRATOR'S AUTHORITY.The arbitrator shall have the powers enumerated
          below:

          a.   Ruling on motions regarding  discovery,  and ruling on procedural
               and evidentiary issues arising during the arbitration;

          b.   Issuing  protective orders on  the  motion of any party  or third
               party witness  (such  protective  orders may include,  but not be
               limited to, sealing the record of the arbitration, in whole or in
               part (including discovery  proceedings and motions,  transcripts,
               and the  decision  and  award),  to protect  the privacy or other
               constitutional or statutory rights of parties and/or witnesses);

          c.   Determining  only  the   issue(s)  submitted   to   him/her  (the
               issue(s) must be identified in the "Request for  Arbitration"  or
               counterclaims,  and  any  issue(s)  not so  identified  in  those
               documents  shall be deemed to be and is/are  outside the scope of
               the  arbitrator's  jurisdiction,  and any award  involving  those
               issue(s) shall be subject to a motion to vacate);

          d.   Shall have no authority to violate state or federal law; and

          e.   Issuing written opinions on the issues raised in the Arbitration.

5.   PLEADINGS.

          a.   A copy of the "Request for Arbitration" shall be forwarded to the
               arbitrator  within five calendar days of his/her selection.


          b.   Within 10 calendar days following submission of the  "Request for
               Arbitration" to the arbitrator, Lennox shall respond  in  writing
               to  the   "Request

                                        B3
<PAGE>


               for  Arbitration"  to the  arbitrator,  Lennox  shall  respond in
               writing  to  the  "Request  for  Arbitration"  by  answer  and/or
               demurrer.   The  answer  or  demurrer  shall  be  served  on  the
               arbitrator and the Employee.

          c.   The answer  to  the  "Request for Arbitration"  shall include the
               following information:

               (1)  a response, by admission or denial,to each claim setforth in
                    the "Request for Arbitration";

               (2)  all affirmative  defenses  asserted by Lennox to each claim;
                    and

               (3)  all  counterclaims  Lennox  asserts against the Employee and
                    any related third party claims.

          d.   If Lennox contends that some or all of the Employee's  claims set
               forth in the "Request for  Arbitration" are barred as a matter of
               law,  it  may  respond  by  demurrer   setting  forth  the  legal
               authorities in support of its position.  If Lennox demurs to less
               than the entire  "Request  for  Arbitration,"  Lennox must answer
               those  claims to which it does not demur at the same time that it
               submits its demurrer.

          e.   The  Employee  shall  have  20  calendar  days to oppose  Lennox'
               demurrer.  Any  opposition  must be in writing  and served on the
               arbitrator and Lennox.

          f.   If the answer alleges a counterclaim,  within  20 days of service
               of the answer,  the  Employee  shall  answer  and/or demur to the
               counterclaim  in writing and serve the answer and/or  demurrer on
               the  arbitrator  and  Lennox.  If  the  Employee  demurs  to  any
               counterclaim, Lennox shall have 20 calendar days from its receipt
               of the demurrer to submit a written opposition to the demurrer to
               the Employee and the arbitrator.

          g.   The  arbitrator  shall  rule  on demurrer(s) to any claims and/or
               counterclaims  within 15  calendar  days of service of the moving
               and opposition papers.

          h.   If any demurrer is overruled, the moving party  must answer those
               claims to which it  demurred  within  five  calendar  days of the
               receipt of the arbitrator's  ruling. The answer must be served on
               the arbitrator and the opposing party.

          i.   When  all  claims  and  counterclaims  have  been  answered,  the
               arbitrator  shall set a time and place for hearing which shall be
               no earlier  than three  months  from the day on which the parties
               are notified of the date of hearing and no

                                        B4
<PAGE>


               later than 12 months from the date on  which  the arbitrator sets
               the date for the hearing.

     6.   DISCOVERY.  The  discovery  process  shall  proceed and be governed as
          follows:

          a.   Parties may obtain discovery by any of the following methods:

               (1)  depositions upon oral examination, one per side as of right,
                    with  more  permitted  if  leave  is   obtained   from   the
                    arbitrator;

               (2)  written interrogatories,  up to a  maximum combined total of
                    20, with the responding party having 20 days to respond;

               (3)  request for production of documents or things or  permission
                    to enter upon land or other  property for  inspection,  with
                    the responding party having 20 days to produce the documents
                    and allow entry or to file objections to the request; and

               (4)  physical  and  mental  examination,  in  accordance with the
                    Federal Rules of Civil Procedure, Rule 35(a).

          b.   Any  motion  to  compel production, answers to interrogatories or
               entry onto land or property must be made to the arbitrator within
               15 days of receipt of objections.

          c.   All  discovery  requests  shall be submitted no less than 60 days
               before the hearing date.

          d.   The  scope  of  discoverable evidence shall be in accordance with
               Federal Rule of Civil Procedure 26(b)(1).

          e.   The   arbitrator   shall   have   the   power  to   enforce   the
               aforementioned discovery rights and obligations by the imposition
               of  the  same  terms,  conditions,   consequences,   liabilities,
               sanctions,  and  penalties  as  can or may  be  imposed  in  like
               circumstances  in a civil  action  by a federal  court  under the
               Federal Rules of Civil  Procedure,  except the power to order the
               arrest or imprisonment of a person.

     7.   HEARING  PROCEDURE.  The  hearing   shall  proceed  according  to  the
          American  Arbitration   Association's   Rules   with   the   following
          amendments:

          a.   The  arbitrator  shall  rule  at the outset of the arbitration on
               procedural issues that bear on whether the arbitration is allowed
               to proceed.

                                        B5
<PAGE>


          b.   Each  party  has  the burden of proving each element of its claim
               or counterclaims, and each party has the burden of proving any of
               its affirmative defenses.

          c.   In addition  to, or  in  lieu of, closing arguments, either party
               shall have the right to present  post-hearing briefs, and the due
               date for exchanging  post-hearing briefs shall be mutually agreed
               on by the parties and the arbitrator.

     8.   SUBSTANTIVE LAW. The  applicable  substantive  law shall be the law of
          the State of Texas or federal law. If both federal and state law speak
          to a cause of  action,  the  Employee  shall  have the  right to elect
          his/her  choice of law.  However,  choice of law in no way affects the
          procedural aspects of the arbitration,  which are exclusively governed
          by the provisions of this Policy.

     9.   OPINION  AND  AWARD.  The arbitrator shall issue a written opinion and
          award, in conformance with the following requirements:

          a.   The opinion and award must be signed and dated by the arbitrator.

          b.   The  arbitrator's  opinion  and  award  shall  decide  all issues
               submitted.

          c.   The  arbitrator's  opinion  and  award  shall set forth the legal
               principles supporting each part of the opinion.

          d.   The  arbitrator  shall  have the same authority to award remedies
               and  damages as provided  to a judge  and/or jury under  parallel
               circumstances.

     10.  ENFORCEMENT  OF  ARBITRATOR'S  AWARD.  Following  the  issuance of the
          arbitrator's  decision,  any party may  petition  a court to  confirm,
          enforce,  correct or vacate the  arbitrator's  opinion and award under
          the Federal Arbitration Act, and/or applicable state law.

     11.  FEES AND COSTS.  Fees  and  costs  shall be allocated in the following
          manner:

          a.   Each  party  shall  be responsible  for its own attorneys'  fees,
               except as provided by law.

          b.   The  Employee  will  pay  a $150  filing  fee to  be  paid to the
               arbitration  agency.  Lennox  will  bear  the  remainder  of  the
               arbitrator's  fees and any costs  associated  with the facilities
               for the arbitration.

          c.   Lennox  and  the  Employee  shall each bear an equal  one-half of
               any  court  reporters'   fees,   assuming  both  parties  want  a
               transcript of the proceeding. If

                                        B6
<PAGE>


               one party elects not to receive a transcript of the  proceedings,
               the  other  party  will  bear all of the  court  reporters'  fee.
               However,  such an election must be made when the arrangements for
               the court reporter are being made.

          d.   Each  party shall  be  responsible for its costs  associated with
               discovery.

C.   SEVERABILITY.  In  the  event  that  any   provision  of   this  Policy  is
     determined by a court of competent jurisdiction to be illegal,  invalid, or
     unenforceable  to any extent,  such term or provision  shall be enforced to
     the extent permissible under the law and all remaining terms and provisions
     of this Policy shall continue in full force and effect.

                                        B7

<PAGE>


                                    EXHIBIT C

                                 SEVERANCE TERMS


1.   EFFECT  OF  PROTECTIVE  COVENANTS.  The  provisions of Paragraphs C2(a)-(d)
     of  Exhibit A of this  Agreement  will  continue  in full  force and effect
     regardless  of whether  Employee  continues  to be  employed  by Lennox and
     regardless of the reason Employee's employment is terminated and regardless
     of the severance  compensation  to which  Employee is entitled as set forth
     below, if any.

2.   NORMAL SEVERANCE  COMPENSATION.  Should  Employee  be  terminated by Lennox
     prior to the  expiration of the term  specified in Section 2 of the body of
     the  Agreement  or the  Agreement  is not  renewed by Lennox for any reason
     other than for Cause as defined in Section  B.3 of Exhibit A, and  provided
     the Employee does not elect and qualify for the Enhanced  Severance Payment
     described  in  Section 3 of  Exhibit C set forth  below,  Employee  will be
     entitled  to receive  monthly  payments  of the  greater of the  Employee's
     Monthly  Base Salary for the  remainder  of the  Agreement's  term or three
     months  of  Employee's  Monthly  Base  Salary  in  addition  to  any  other
     compensation or benefits  applicable to an employee at Employee's  level to
     the extent the Employee would be eligible for such compensation or benefits
     under the  terms of those  formal  programs  which  are  applicable  to all
     employees at Employee's level in effect at the time of termination and, for
     any benefits which continue after termination,  subject to any modification
     which is made to such programs applicable to the all of the participants at
     such time.

3.   ENHANCED  SEVERANCE  BENEFITS. If  Lennox terminates an Employee other than
     for  Cause  (including  Lennox'  non-renewal  of the  Agreement)  and  that
     Employee  elects and meets the conditions of this Paragraph 3 of Exhibit C,
     Lennox  agrees to pay an Enhanced  Severance  Payment and provide the other
     benefits described below ("Enhanced Severance Benefits"). The Employee must
     agree to execute a written  General  Release of any and all possible claims
     against  Lennox  existing at the time of  termination in exchange for which
     Lennox agrees to the following severance provisions:

     (i)  SEVERANCE  PAYMENT.  Lennox agrees  to  pay  Employee's  Monthly  Base
          Salary for a period of 24 months following the date of termination. In
          addition,  Lennox  agrees  to pay to the  Employee,  within 45 days of
          termination, in a lump sum, the total of any short-term bonus payments
          actually paid to the Employee over the  twenty-four  (24) month period
          prior to the date of termination.  The severance payments will be paid
          in installments  in accordance  with the regular  payroll  policies of
          Lennox then in effect and each  installment will be subject to regular
          payroll deductions and all applicable taxes.

                                         C1

<PAGE>
     (ii) PERQUISITES.  Within  45  days  following  the  date  of  termination,
          the Employee  will receive in addition to (i) above,  in a lump sum, a
          payment of a sum equal to 10% of the Employee's  Annual Base Salary in
          effect at the time of  termination in lieu of the  continuation  of or
          payment   for  any   perquisites,   including,   without   limitation,
          automobile, club membership, tax preparation,  physical examination or
          others being received by the Employee at the time of termination.

     (iii)COBRA CONTINUATION. Lennox  agrees  to  pay  COBRA  premiums  to allow
          Employee to continue to participate in Lennox group health plan on the
          same  terms  as  other  Lennox  employees  for up to 18  months  while
          Employee  is  unemployed  and not  eligible  for  other  group  health
          insurance coverage. Should Employee remain unemployed at the end of 18
          months,  the  equivalent  of the  COBRA  premium  will  be paid to the
          employee on a month-to-month basis for up to six additional months for
          his or her use in  obtaining  health  insurance  coverage  outside the
          group health plan.

     (iv) OUTPLACEMENT. Lennox  agrees  to  provide  Employee  with outplacement
          services in accordance with Lennox' then applicable policy. In lieu of
          such outplacement  services,  Lennox agrees to pay Employee a lump sum
          payment  of 10% of  Employee's  Annual  Base  Salary  within  45  days
          following the date of termination should Employee elect not to receive
          outplacement services.

     (v)  DEATH BENEFIT.  Employee's beneficiary, as  set  forth  in  Exhibit D,
          will receive,  in a lump sum, a death benefit equivalent to six months
          of  Employee's  Monthly  Base  Salary in the event  that the  Employee
          should die during the period in which the  Employee is entitled to any
          severance payment described above.

     Nothing herein shall be construed to limit  Employee's right to receive any
     benefits and  entitlements  under Lennox' ERISA or other  employee  benefit
     plans,  with all such benefits  being  received by the Employee only to the
     extent  allowed by and subject to the terms of any such plan as it may from
     time to time exist or be modified.  Further, this Agreement is not intended
     and the  parties  agree that it will not be  interpreted  as  creating  any
     obligation  for  Lennox  to  create  or  maintain  any  employee   benefit,
     compensation, perquisite or other plan, policy or program for its employees
     and Lennox retains the sole  discretion to eliminate or modify any existing
     plan, program or policy as it deems to be appropriate.

                                        C2

<PAGE>

                                    EXHIBIT D

                           DESIGNATION OF BENEFICIARY


The following  represent the  designation of Beneficiary  for the Employee named
below:

                  EMPLOYEE:                 _________________________


PRIMARY BENEFICIARY(S):

_____________________         ________________________               _________%*
Name                                Relationship                      Percent

_____________________         ________________________               _________%*
Name                                Relationship                      Percent

                         *The total should add to 100%

CONTINGENT BENEFICIARY(S):

_____________________         ________________________               _________%*
Name                                 Relationship                     Percent

_____________________         ________________________               _________%*
Name                                 Relationship                     Percent

                         *The total should add to 100%


This is to confirm the designation of my  Beneficiary(s) to receive any benefits
provided  under this  Agreement  which are not  otherwise  covered  by  Employee
benefit plans with other designations of beneficiary which I intend to supersede
any designation made above.

                                                  EMPLOYEE

                                                  ------------------------------
                                                  Signature
                                                  ------------------------------
                                                  Printed Name
                                                  ------------------------------
                                                  Date


</TEXT>
</DOCUMENT>
