AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 31, 2003
REGISTRATION NOS. 333-__________
333-__________-01
333-__________-02
333-__________-03
333-__________-04
333-__________-05
333-__________-06
333-__________-07
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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LENNOX INTERNATIONAL INC.
LENNOX INDUSTRIES INC.
ARMSTRONG AIR CONDITIONING INC.
EXCEL COMFORT SYSTEMS INC.
SERVICE EXPERTS INC.
LENNOX GLOBAL LTD.
LENNOX TRUST I
LENNOX TRUST II
(Exact name of registrant as specified in its charter)
DELAWARE 42-0991521
IOWA 42-0377110
OHIO 34-1601572
DELAWARE 75-2836408
DELAWARE 62-1639453
DELAWARE 75-2600663
DELAWARE 13-7354105
DELAWARE 13-7354106
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
CARL E. EDWARDS, JR.
2140 LAKE PARK BOULEVARD EXECUTIVE VICE PRESIDENT, CHIEF LEGAL OFFICER
RICHARDSON, TEXAS 75080 AND SECRETARY
(972) 497-5000 LENNOX INTERNATIONAL INC.
(Address, including zip code, and telephone number, 2140 LAKE PARK BOULEVARD
including area code, of registrant's principal executive offices) RICHARDSON, TEXAS 75080
(972) 497-5000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
DOUGLASS M. RAYBURN
BAKER BOTTS L.L.P.
2001 ROSS AVENUE
DALLAS, TEXAS 75201
(214) 953-6500
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Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED PRICE(1), (2), (3) REGISTRATION FEE
--------------------------------- ------------------ ----------------
Senior Debt Securities and Subordinated Debt Securities of Lennox
International Inc..........................................................
Common Stock, $.01 par value per share, of Lennox International Inc.(4)....
Preferred Stock of Lennox International Inc................................
Warrants of Lennox International Inc. .....................................
Depositary Shares of Lennox International Inc. ............................
Stock Purchase Contracts of Lennox International Inc.......................
Stock Purchase Units of Lennox International Inc...........................
Prepaid Stock Purchase Contracts of Lennox International Inc. .............
Preferred Securities of Lennox Trust I and Lennox Trust II.................
Guarantees of Preferred Securities of Lennox Trust I and Lennox Trust II..
Guarantees of Senior and Subordinated Debt Securities of Lennox
International Inc. by Lennox Industries Inc., Armstrong Air Conditioning
Inc., Excel Comfort Systems Inc., Service Experts Inc. and Lennox Global
Ltd. ......................................................................
Total.................................................................. $250,000,000 $23,000
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act and exclusive of accrued
interest, distributions and dividends, if any. The aggregate initial
offering price of all securities issued from time to time pursuant to this
registration statement shall not exceed $250,000,000 or the equivalent
thereof in foreign currencies, foreign currency units or composite
currencies. If any debt securities are issued at an original issue
discount, then the offering price shall be in such greater principal amount
as shall result in an aggregate initial offering price of up to
$250,000,000 or the equivalent thereof in foreign currencies, foreign
currency units or composite currencies, less the dollar amount of any
securities previously issued hereunder. Any securities registered hereunder
may be sold separately or as units with other securities registered
hereunder.
(2) There is being registered hereunder such indeterminate number or amount of
senior and subordinated debt securities, common stock, preferred stock,
warrants, depositary shares, stock purchase contracts, stock purchase units
and prepaid stock purchase contracts of Lennox International Inc. and
preferred securities of Lennox Trust I and Lennox Trust II as may from time
to time be issued at indeterminate prices and as may be issuable upon
conversion, redemption, exchange, exercise or settlement of any securities
registered hereunder, including any applicable antidilution provisions.
Senior and subordinated debt securities of Lennox International Inc. may be
issued and sold to Lennox Trust I and Lennox Trust II, in which event such
debt securities may later be distributed to the holders of preferred
securities upon a dissolution of Lennox Trust I and Lennox Trust II and the
distribution of their respective assets.
(3) Lennox International Inc. is also registering under this registration
statement all guarantees and other obligations that it may have with
respect to preferred securities that may be issued by Lennox Trust I and
Lennox Trust II. Lennox Industries Inc., Armstrong Air Conditioning Inc.,
Excel Comfort Systems Inc., Service Experts Inc. and Lennox Global Ltd. are
registering under this registration statement all guarantees and other
obligations that they may have with respect to the senior and subordinated
debt securities that may be issued by Lennox International Inc. No separate
consideration will be received for the guarantees or any other such
obligations. Pursuant to Rule 457(n) under the Securities Act, no
registration fee is required with respect to such guarantees or
obligations.
(4) Each share of common stock includes one preferred share purchase right. No
separate consideration is payable for the preferred share purchase rights.
The registration fee for these securities is included in the fee for the
common stock.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and, it is not soliciting an offer to buy these
securities, in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED JANUARY 31, 2003
PROSPECTUS
$250,000,000
LENNOX INTERNATIONAL INC. LENNOX TRUST I
LENNOX TRUST II
SENIOR DEBT SECURITIES
SUBORDINATED DEBT SECURITIES TRUST PREFERRED SECURITIES
COMMON STOCK GUARANTEED AS DESCRIBED IN THIS PROSPECTUS, BY
PREFERRED STOCK LENNOX INTERNATIONAL INC.
WARRANTS
DEPOSITARY SHARES
STOCK PURCHASE CONTRACTS
STOCK PURCHASE UNITS
PREPAID STOCK PURCHASE CONTRACTS
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We will provide the specific terms of the securities in
supplements to this prospectus. You should read this prospectus and any
supplement carefully before you invest.
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Our common stock is traded on the New York Stock Exchange under
the trading symbol "LII."
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CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 4.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR
DETERMINED WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this prospectus is , 2003.
TABLE OF CONTENTS
Page
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About This Prospectus.............................................................................................2
Lennox International Inc..........................................................................................3
Lennox Trust I And Lennox Trust II................................................................................3
Risk Factors......................................................................................................4
A Warning About Forward-Looking Statements........................................................................8
Use Of Proceeds...................................................................................................9
Ratio Of Earnings To Fixed Charges and Earnings To Combined Fixed Charges
and Preferred Stock Dividends..................................................................................9
Recent Accounting Pronouncements..................................................................................9
Accounting Treatment Relating To Trust Preferred Securities......................................................10
Description Of Debt Securities...................................................................................10
Description Of Capital Stock.....................................................................................18
Description Of Warrants..........................................................................................25
Description Of Depositary Shares.................................................................................26
Description Of Stock Purchase Contracts And Stock Purchase Units.................................................28
Description Of Trust Preferred Securities........................................................................29
Certain Relationships And Related Party Transactions.............................................................35
Plan Of Distribution.............................................................................................35
Legal Opinions...................................................................................................37
Experts..........................................................................................................37
Where You Can Find More Information..............................................................................37
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with
the SEC utilizing a "shelf" registration process. Under the shelf process, we
may offer any combination of the securities described in this prospectus in one
or more offerings with a total initial offering price of up to $250,000,000.
This prospectus provides you with a general description of the securities we may
offer. Each time we use this prospectus to offer securities, we will provide a
prospectus supplement and, if applicable, a pricing supplement that will contain
specific information about the terms of that offering. The prospectus supplement
and any pricing supplement may also add to, update or change information
contained in this prospectus. Please carefully read this prospectus, the
prospectus supplement and any pricing supplement, in addition to the information
contained in the documents we refer to under the heading "Where You Can Find
More Information."
Generally, whenever we use the terms "we," "our," "us," and "Lennox,"
we are referring to Lennox International Inc. and its subsidiaries. However, for
purposes of the "Description of Debt Securities," the "Description of Capital
Stock," the "Description of Warrants," the "Description of Depositary Shares,"
the "Description of Stock Purchase Contracts and Stock Purchase Units" and the
"Description of Trust Preferred Securities" sections of this prospectus, and
when the context otherwise requires, the terms "we," "our," "us," and "Lennox"
refer only to Lennox International Inc.
2
LENNOX INTERNATIONAL INC.
We are a leading global provider of climate control solutions. We
design, manufacture, market, install, service and repair a broad range of
products for the heating, ventilation, air conditioning and refrigeration, or
"HVACR," markets. Our products are sold under well-established brand names
including "Lennox," "Armstrong Air," "Ducane," "Bohn," "Larkin," "Advanced
Distributor Products," "Heatcraft," "Service Experts" and others. Historically,
we have sold our "Lennox" brand of residential heating and air conditioning
products directly to a network of installing dealers, which currently numbers
approximately 6,500, making us one of the largest wholesale distributor of these
products in North America. In September 1998, we initiated a program to acquire
dealers or service centers in metropolitan areas in the United States and Canada
so that we can provide heating and air conditioning products and services
directly to consumers. We greatly expanded this program with the acquisition of
Service Experts Inc. in January 2000.
Lennox Industries Inc., Armstrong Air Conditioning Inc., Excel Comfort
Systems Inc., Service Experts Inc. and Lennox Global Ltd. are all wholly owned
subsidiaries of Lennox.
Our principal executive offices are located at 2140 Lake Park
Boulevard, Richardson, Texas 75080. Our telephone number at that location is
972-497-5000.
LENNOX TRUST I AND LENNOX TRUST II
We have formed two Delaware statutory trusts, Lennox Trust I and Lennox
Trust II, to raise capital for us by issuing preferred securities under this
prospectus and investing the proceeds in our debt securities. Unless we inform
you otherwise in the prospectus supplement relating to an offering of trust
preferred securities, each trust will exist solely for the purposes of:
o issuing and selling its trust preferred securities and trust
common securities;
o investing the proceeds from the sale of those securities in a
specific series of our debt securities; and
o engaging in only such other activities as are necessary or
incidental to issuing its securities and purchasing and
holding our debt securities.
The trust preferred securities and the trust common securities of each
trust will represent undivided beneficial interests in the assets of that trust.
We will directly or indirectly own all of the common securities of each trust.
The common securities of each trust will represent an aggregate liquidation
amount equal to at least three percent of the total capital of that trust. The
common securities of each trust will rank equally with, and each trust will make
payments on its common securities in proportion to, the trust preferred
securities it issues. If, however, an event of default occurs under the
declaration of trust of any of the trusts, including a default under the related
series of our debt securities, our right to payments on the common securities of
that trust will be subordinated to your rights as holder of its trust preferred
securities.
The business and affairs of each trust will be conducted by its
trustees. As the holder of the common securities of each trust, we are entitled,
except in limited circumstances, to appoint, and may remove or replace, the
trustees. We may increase or decrease the number of trustees for each trust, but
each trust must have at least five trustees.
The duties and obligations of the trustees of each trust are governed
by its declaration of trust. Prior to the issuance of any trust preferred
securities by a trust, we will ensure that at least three of our officers,
employees or affiliates act as regular trustees and that a financial institution
unaffiliated with us acts as property trustee and indenture trustee for purposes
of the Trust Indenture Act of 1939. In addition, unless the property trustee of
a trust maintains a principal place of business in Delaware and meets the other
requirements of applicable law, another trustee of that trust will have its
principal place of business or reside in Delaware. We will appoint The Bank of
New York to serve as property trustee for the trusts and The Bank of New York
(Delaware) to serve as Delaware trustee for the trusts.
3
We will pay all of the fees and expenses of each trust, including those
related to any offering of trust preferred securities. In addition, we will
provide a guarantee with respect to each series of trust preferred securities
issued by a trust under which we will unconditionally and irrevocably agree to
make certain payments to the holders of that series of trust preferred
securities. That guarantee may, however, be subject to applicable subordination
provisions and will apply only when the relevant trust has sufficient
immediately available funds but fails to make the payments.
We will provide further information about the trusts in the prospectus
supplement relating to an offering of trust preferred securities.
The principal office of each trust is c/o Lennox International Inc.,
2140 Lake Park Boulevard, Richardson, Texas 75080. The telephone number at that
location is 972-497-5000.
RISK FACTORS
You should carefully consider all of the information contained or
incorporated by reference in this prospectus or any prospectus supplement. These
and other risks could materially and adversely affect our business operating
results or financial condition.
OUR BUSINESS CAN BE HURT BY AN ECONOMIC DOWNTURN.
Our business is affected by a number of economic factors, including the
level of economic activity in the markets in which we operate. A decline in
economic activity in the United States could materially affect our financial
condition and results of operation. Sales in the residential and commercial new
construction market correlate closely to the number of new homes and buildings
that are built, which in turn is influenced by cyclical factors such as interest
rates, inflation, consumer spending habits, employment rates and other
macroeconomic factors over which we have no control. In the HVACR business, a
decline in economic activity, such as that experienced in 2001, as a result of
these cyclical or other factors typically results in a decline in new
construction and replacement purchases, which would result in a decrease in our
sales volume and profitability.
COOLER THAN NORMAL SUMMERS AND WARMER THAN NORMAL WINTERS MAY DEPRESS OUR SALES.
Demand for our products and for our services is strongly affected by
the weather. Cooler than normal summers depress our sales of replacement air
conditioning and refrigeration products and warmer than normal winters have the
same effect on our heating products. Because a high percentage of our overhead
and operating expenses is relatively fixed throughout the year, operating
earnings and net earnings tend to be lower in quarters with lower sales.
WE MAY INCUR MATERIAL COSTS AS A RESULT OF WARRANTY AND PRODUCT LIABILITY CLAIMS
WHICH WOULD NEGATIVELY AFFECT OUR PROFITABILITY.
The development, manufacture, sale and use of our products involve a
risk of warranty and product liability claims. In addition, because we own
installing heating and air conditioning dealers in the United States and Canada,
we incur the risk of liability claims for the installation and service of
heating and air conditioning products. Our product liability insurance policies
have limits that if exceeded, may result in material costs that would have an
adverse effect on our future profitability. In addition, warranty claims are not
covered by our product liability insurance and there may be types of product
liability claims that are also not covered by our product liability insurance.
WE MAY NOT BE ABLE TO SUCCESSFULLY INTEGRATE THE BUSINESSES THAT WE HAVE
ACQUIRED.
We have completed approximately 110 acquisitions since the beginning of
1998. The success of our business will depend in part on our ability to
integrate and operate the acquired businesses profitably and to identify and
implement opportunities for cost savings.
4
OUR SUBSTANTIAL INDEBTEDNESS WILL LIMIT CASH FLOW AVAILABLE FOR OUR OPERATIONS
AND COULD ADVERSELY AFFECT OUR ABILITY TO SERVICE DEBT OR OBTAIN ADDITIONAL
FINANCING, IF NECESSARY.
As of September 30, 2002, we had $410.0 million of consolidated
indebtedness outstanding and $468.4 million of consolidated stockholders'
equity. In addition, we had $120.0 million of additional credit available under
our credit facility.
Our significant level of indebtedness will have several important
consequences to our operations, including:
o we will need to use a large portion of our consolidated cash
flow to pay principal and interest on our indebtedness, which
will reduce the amount of money available to finance our
operations and other business activities;
o we may have difficulty borrowing money in the future for
working capital, capital expenditures, acquisitions or other
purposes;
o we may have a much higher level of debt than some of our
competitors, which may put us at a competitive disadvantage;
o our debt level will make us more vulnerable to economic
downturns and adverse developments in our business;
o we are exposed to the risk of increasing interest rates
because some of our debt, including debt under our senior
credit facility, has variable rates of interest;
o our debt level will reduce our flexibility to respond to
changing business and economic conditions, including increased
competition in our industry; and
o our debt level will limit our ability to pursue other business
opportunities, borrow more money for operations or capital in
the future and implement our business strategy.
Our ability to make payments with respect to the notes will depend on
our future operating performance, which will be affected by prevailing economic
conditions and financial, business, competitive and other factors. We will not
be able to control many of these factors, such as the economic conditions in the
markets in which we operate and initiatives taken by our competitors. We cannot
be certain that our cash flow will be sufficient to allow us to pay principal
and interest on our debt and to meet our other obligations. If we do not have
enough money to do so, we may be required to refinance all or part of our
existing debt, sell assets or borrow more money. We may not be able to do so on
commercially reasonable terms, if at all. In addition, the terms of our existing
or future debt arrangements, including our credit facility, may restrict us from
adopting any of these alternatives.
THE CONSOLIDATION OF DISTRIBUTORS AND DEALERS COULD FORCE US TO LOWER OUR PRICES
OR HURT OUR BRAND NAMES WHICH WOULD RESULT IN LOWER SALES.
There is currently an effort underway in the United States by several
companies to purchase independent distributors and dealers and consolidate them
into large enterprises. These large enterprises may be able to exert pressure on
us to reduce prices. Additionally, these new enterprises tend to emphasize their
company name, rather than the brand of the manufacturer, in their promotional
activities, which could lead to dilution of the importance and value of our
brand names. Future price reductions and the brand dilution caused by the
consolidation among HVAC distributors and dealers could have an adverse effect
on our business and results of operation.
WE MAY NOT BE ABLE TO COMPETE FAVORABLY IN THE HIGHLY COMPETITIVE HVACR
BUSINESS.
Competition in our various markets could cause us to reduce our prices
or lose market share, or could negatively affect our cash flow, which could have
an adverse effect on our future financial results. Substantially all
5
of the markets in which we participate are highly competitive. The most
significant competitive factors we face are product reliability, product
performance, service and price, with the relative importance of these factors
varying among our product lines. Other factors that affect competition in the
HVACR market include the development and application of new technologies and an
increasing emphasis on the development of more efficient HVACR products.
Moreover, new product introductions are an important factor in the market
categories in which our products compete. Several of our competitors have
greater financial and other resources than we have, allowing them to invest in
more extensive research and development. In addition, our company-owned dealers
face competition from independent dealers and dealers owned by consolidators and
utility companies, some of whom may be able to provide their products or
services at lower prices than we can. We may not be able to compete successfully
against current and future competition and current and future competitive
pressures faced by us may materially adversely affect our business and results
of operations.
WE MAY NOT BE ABLE TO SUCCESSFULLY DEVELOP AND MARKET NEW PRODUCTS.
Our future success will depend upon our continued investment in
research and new product development and our ability to continue to realize new
technological advances in the HVACR industry. Our inability to continue to
successfully develop and market new products or our inability to achieve
technological advances on a pace consistent with that of our competitors could
lead to a material adverse effect on our business and results of operations.
WE MAY BE ADVERSELY AFFECTED BY PROBLEMS IN THE AVAILABILITY OF OR INCREASES IN
THE PRICES OF COMPONENTS AND RAW MATERIALS.
Increases in the prices of raw materials or components or problems in
their availability could depress our sales or increase the costs of our
products. We are dependent upon components purchased from third parties as well
as raw materials such as copper, aluminum and steel. We enter into contracts
each year for the supply of key components at fixed prices. However, if a key
supplier is unable or unwilling to meet our supply requirements, we could
experience supply interruptions or cost increases, either of which could have an
adverse effect on our gross profit. In addition, we regularly pre-purchase a
portion of our raw materials at a fixed price each year to hedge against price
fluctuations, but a large increase in raw materials prices could significantly
increase our cost of goods sold.
SINCE A SIGNIFICANT PERCENTAGE OF OUR WORKFORCE IS UNIONIZED, WE FACE RISKS OF
WORK STOPPAGES AND OTHER LABOR RELATIONS PROBLEMS.
We are subject to a risk of work stoppage and other labor relations
matters because a significant percentage of our workforce is unionized. As of
June 2002, approximately 24% of our workforce was unionized. As we expand our
operations, we are subject to increased unionization of our workforce. The
results of future negotiations with these unions, including the effects of any
production interruptions or labor stoppages, could have an adverse effect on our
future financial results.
Moreover, our ability to provide high-quality mechanical and electrical
services on a timely basis requires an adequate supply of skilled technicians.
Many companies in our industry are currently experiencing shortages of qualified
technicians. We may not be able to maintain an adequate skilled labor force or
our labor expenses could increase. A shortage of skilled labor would require us
to curtail our planned internal growth or may require us to use less-skilled
labor which could adversely affect our financial performance.
EXPOSURE TO ENVIRONMENTAL LIABILITIES COULD ADVERSELY AFFECT OUR RESULTS OF
OPERATIONS.
Our future profitability could be adversely affected by current or
future environmental laws. We are subject to extensive and changing federal,
state and local laws and regulations designed to protect the environment in the
United States and in other parts of the world. These laws and regulations could
impose liability for remediation costs and often result in civil or criminal
penalties in cases of non-compliance. Compliance with environmental laws
increases our costs of doing business. Because these laws are subject to
frequent change, we are unable to predict the future costs resulting from
environmental compliance.
6
The United States and other countries have established programs for
limiting the production, importation and use of certain ozone depleting
chemicals, including refrigerants that we use in most of our air conditioning
and refrigeration products. Some categories of these refrigerants have been
banned completely and others are currently scheduled to be phased out in the
United States by the year 2030. The United States is under pressure from the
international environmental community to accelerate the current 2030 deadline.
In Europe, this phase out may occur even sooner. The industry's failure to find
suitable replacement refrigerants for substances that have been or will be
banned or the acceleration of any phase out schedules for these substances by
governments could have an adverse effect on our future financial results.
THE NORRIS FAMILY WILL BE ABLE TO EXERCISE SIGNIFICANT CONTROL OVER OUR COMPANY.
As of March 1, 2002, approximately 110 descendants of or persons
otherwise related to D.W. Norris, one of our original owners, collectively
control over 50% of the outstanding shares of our common stock. Accordingly, if
the Norris family were to act together it would have the ability to determine
the outcome of any action requiring the approval of the holders of our common
stock, including the election of all of our board of directors. Circumstances
may occur in which the interests of the Norris family could conflict with your
interests as a holder of our securities.
OUR STOCKHOLDER RIGHTS PLAN AND SOME PROVISIONS IN OUR CERTIFICATE OF
INCORPORATION AND OUR BYLAWS COULD DELAY OR PREVENT A CHANGE IN CONTROL.
Our stockholder rights plan and our governing documents contain
provisions that make it more difficult to implement corporate actions that may
have the effect of delaying, deterring or preventing a change in control. A
stockholder might consider a change in control in his or her best interest
because he or she might receive a premium for his or her common stock. Examples
of these provisions include:
o a vote of more than 80% of the outstanding voting stock is
required for stockholders to amend specified provisions of the
governing documents;
o our board of directors is divided into three classes, each
serving three-year terms;
o members of our board of directors may be removed only for
cause and only upon the affirmative vote of at least 80% of
the outstanding voting stock; and
o a vote of more than 80% of the outstanding voting stock is
required to approve specified transactions between us and any
person or group that owns at least 10% of our voting stock.
Our board of directors has the ability, without stockholder action, to
issue shares of preferred stock that could, depending on their terms, delay,
discourage or prevent a change in control of Lennox. In addition, the Delaware
General Corporation Law, under which we are incorporated, contains provisions
that impose restrictions on business combinations such as mergers between us and
a holder of 15% or more of our voting stock. See "Description of Capital Stock"
for a more complete description of these provisions.
OUR FORMER USE OF ARTHUR ANDERSEN LLP AS OUR INDEPENDENT AUDITORS MAY POSE RISK
TO US AND WILL LIMIT YOUR ABILITY TO SEEK POTENTIAL RECOVERIES FROM THEM RELATED
TO THEIR WORK.
On June 15, 2002, Arthur Andersen LLP, our former independent auditor,
was convicted on a federal obstruction of justice charge, and as of August 30,
2002, Arthur Andersen ceased practicing before the SEC. Some investors,
including institutional investors, may choose not to invest in our hold
securities of a company whose financial statements were audited by Arthur
Andersen, which may serve to, among other things, suppress the price of our
securities. On May 20, 2002, our board of directors decided to no longer engage
Arthur Andersen and engaged KPMG LLP to serve as our independent auditors.
SEC rules require us to present our audited financial statements in
various SEC filings, along with Arthur Andersen's consent to our inclusion of
its audit report in those filings. The SEC has provided regulatory relief
designed to allow companies that file reports with the SEC to dispense with the
requirement to file a consent of
7
Arthur Andersen in certain circumstances. We have been unable to obtain, after
reasonable efforts, the written consent of Arthur Andersen to our naming it as
an expert and as having audited the consolidated financial statements
incorporated by reference into this prospectus. Notwithstanding the SEC's
regulatory relief, the inability of Arthur Andersen to provide its consent or to
provide assurance services to us could negatively affect our ability to, among
other things, access the public capital markets. Any delay or inability to
access the public markets as a result of this situation could have a material
adverse impact on our business. Also an investor's ability to seek potential
recoveries from Arthur Andersen will be limited significantly in the absence of
a consent and may be further limited by the diminished amount of assets of
Arthur Andersen that are or may in the future be available for claims.
ANY FUTURE DETERMINATION THAT A SIGNIFICANT IMPAIRMENT OF THE VALUE OF OUR
INTANGIBLE ASSETS HAS OCCURRED COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
RESULTS OF OPERATIONS.
We had intangible assets, net of accumulated amortization, of
approximately $437.6 million on our balance sheet as of September 30, 2002. Any
future determination that a significant impairment of the value of intangible
assets has occurred would require a write-down of the impaired portion of
unamortized goodwill to fair value, which would reduce our assets and
shareholders' equity and could have a material adverse effect on our results of
operations.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
This prospectus includes "forward-looking statements," within the
meaning of federal securities laws, that are based upon our beliefs as well as
assumptions made by us based on the information currently available to us. All
statements other than statements of historical fact included or incorporated by
reference in this prospectus and the accompanying prospectus supplement
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including, but not limited to,
statements identified by the words "may," "will," "should," "plan," "predict,"
"anticipate," "believe," "intend," "estimate," "potential," "continue" and
"expect" or the negative of such terms and similar expressions. Such statements
reflect our current views with respect to future events, based on what we
believe are reasonable assumptions; however, such statements are subject to
certain risks, uncertainties and assumptions. In particular, we urge you to
fully consider the cautionary statements described in "Risk Factors" beginning
on page 4, which identify many important factors that could cause actual results
to differ materially from our forward-looking statements. These include, but are
not limited to:
o general economic conditions in the United States and abroad;
o the impact of the weather on our business;
o warranty and product liability claims;
o our ability to successfully complete and integrate
acquisitions;
o our substantial indebtedness;
o our ability to manage new lines of business;
o the consolidation trend in the HVACR industry;
o competition in the HVACR business;
o our ability to successfully develop and manage new products;
o increases in the prices of components and raw materials;
o labor relations problems; and
o environmental risks.
8
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may differ
materially from those in the forward-looking statements. All forward-looking
statements included in this prospectus speak only as of the date hereof, and we
disclaim any intention or obligation to update or review any forward-looking
statements or information, whether as a result of new information, future events
or otherwise.
USE OF PROCEEDS
Except as otherwise provided in the related prospectus supplement, we
will use the net proceeds from the sale of the offered securities for general
corporate purposes. These purposes may include repayment or refinancing of debt,
acquisitions, working capital, capital expenditures and repurchases and
redemptions of securities. Pending any specific application, we may initially
invest funds in short-term marketable securities or apply them to the reduction
of other short-term indebtedness. Each trust will use all the proceeds received
from the sale of its trust preferred securities and trust common securities to
purchase debt securities issued by Lennox.
RATIO OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth our ratio of earnings to fixed charges
for the periods indicated. We had no preferred stock outstanding for any period
presented, and accordingly, our ratio of earnings to combined fixed charges and
preferred stock dividends is the same as our ratio of earnings to fixed charges.
NINE MONTHS ENDED
SEPTEMBER 30, FISCAL YEARS ENDED DECEMBER 31,
----------------- ---------------------------------------------------------------
2002 2001 2000 1999 1998 1997
----------------- ---------- ----------- ----------- ----------- ---------
2.97x -- 2.23x 3.53x 3.94x --
Earnings consist of income (loss) before income taxes and fixed
charges, excluding minority interest. Fixed charges consist of the total of
interest expense, amortization of loan origination costs and that portion of
rental expense considered to represent interest cost. Due to restructuring
charges in 2001 of $73.2 million of which $7.8 million was included in costs of
goods sold, additional earnings of $44.3 million would have been necessary to
cover fixed charges. Due to product inspection charges in 1997 of $140.0
million, additional earnings of $45.7 million would have been necessary to cover
fixed charges.
RECENT ACCOUNTING PRONOUNCEMENTS
On January 1, 2002, we adopted Statement of Financial Accounting
Standards No. 142 "Goodwill and Other Intangible Assets" ("SFAS No. 142"), and
recorded a $285.7 million impairment of goodwill (249.2 million, net of taxes).
The adoption of SFAS No. 142 requires that goodwill and other intangible assets
with an indefinite useful life no longer be amortized as expenses of operations
but rather tested for impairment at least annually using a fair-value-based
test. The impairment charge relates primarily to the 1998 to 2000 acquisitions
of our retail and hearth products operations, where lower than expected
operating results occurred. Our estimates of fair value for our reporting units
were determined based on a combination of the future earnings forecasts using
discounted values of projected cash flows and market values of comparable
businesses.
As a result of the adoption of SFAS No. 142 on January 1, 2002, we have
discontinued the amortization of our goodwill and trademark intangible assets.
The following table reconciles reported net (loss) income and (loss) earnings
per share amounts to adjusted net (loss) income and (loss) earnings per share
amounts as if SFAS No. 142 had been in effect for each of the three years ended
December 31, 2001 (in thousands, except per share amounts):
9
FOR THE TWELVE MONTHS ENDED
DECEMBER 31,
------------------------------------------
2001 2000 1999
---------- ---------- ----------
Reported net (loss) income ............................ $ (42,398) $ 59,058 $ 73,154
Add back: goodwill amortization ....................... 18,473 16,335 8,038
Add back: trademark amortization ...................... 165 165 165
Income tax effect of discontinued amortization ........ (2,111) (2,021) (549)
---------- ---------- ----------
Adjusted net (loss) income ............................ $ (25,871) $ 73,537 $ 80,808
========== ========== ==========
BASIC (LOSS) EARNINGS PER SHARE:
Reported net (loss) income ............................ $ (0.75) $ 1.06 $ 1.85
Add back: goodwill amortization ....................... 0.33 0.29 0.20
Add back: trademark amortization ...................... -- -- --
Income tax effect of discontinued amortization ........ (0.04) (0.04) (0.01)
---------- ---------- ----------
Adjusted net (loss) income ............................ $ (0.46) $ 1.31 $ 2.04
========== ========== ==========
DILUTED (LOSS) EARNINGS PER SHARE:
Reported net (loss) income ............................ $ (0.75) $ 1.05 $ 1.81
Add back: goodwill amortization ....................... 0.33 0.29 0.20
Add back: trademark amortization ...................... -- -- --
Income tax effect of discontinued amortization ........ (0.04) (0.04) (0.01)
---------- ---------- ----------
Adjusted net (loss) income ............................ $ (0.46) $ 1.30 $ 2.00
========== ========== ==========
ACCOUNTING TREATMENT RELATING TO TRUST PREFERRED SECURITIES
The financial statements of any trust issuing securities will be
consolidated with our financial statements, with the trust preferred securities
shown on our consolidated financial statements as Lennox-obligated mandatorily
convertible preferred capital trust securities of a subsidiary trust. Our
financial statements will include a footnote that discloses, among other things,
that the assets of the trust consist of our debt securities and will specify the
designation, principal amount, interest rate and maturity date of the debt
securities.
DESCRIPTION OF DEBT SECURITIES
The debt securities covered by this prospectus will be our general
unsecured obligations. The debt securities will be either senior debt securities
or subordinated debt securities. We will issue the debt securities under one or
more separate indentures between us and a trustee named in the indentures.
Senior debt securities will be issued under a senior indenture, and subordinated
debt securities will be issued under a subordinated indenture. We sometimes call
the senior indenture and the subordinated indenture the "indentures."
We have summarized selected provisions of the indentures and the debt
securities below. This summary is not complete. We have filed the forms of the
indentures with the SEC as exhibits to the registration statement, and you
should read the indentures for provisions that may be important to you.
GENERAL
The senior debt securities will constitute senior debt and will rank
equally with all our unsecured and unsubordinated debt. The subordinated debt
securities will be subordinated to, and thus have a junior position to, any
senior debt securities and all our other senior debt. In some cases, and as
would be described in a prospectus supplement, a series of our subordinated debt
may also be junior in some respects to a different series of subordinated debt.
The indentures will not limit the amount of debt we may issue under the
indentures, and, unless we inform you otherwise in the prospectus supplement,
they will not limit the amount of other debt or securities we may incur or
issue. We may issue debt securities under either indenture from time to time in
one or more series, each in an amount we authorize prior to issuance.
Substantially all of our operations are conducted through our
subsidiaries, and our subsidiaries generate substantially all of our operating
income and cash flow. As a result, distributions or advances from our
subsidiaries are important sources of funds to meet our debt service
obligations. Contractual provisions or laws, as well as our subsidiaries'
financial condition and operating requirements, may limit our ability to obtain
from our subsidiaries cash that we need to pay our debt service obligations,
including payments on the debt securities.
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Unless we inform you otherwise in the prospectus supplement, the
indentures and the debt securities will not contain:
o any covenants or other provisions designed to protect holders
of the debt securities in the event we participate in a highly
leveraged transaction; or
o provisions that give holders of the debt securities the right
to require us to repurchase their securities in the event of a
decline in our credit rating resulting from a takeover,
recapitalization or similar restructuring or otherwise.
The prospectus supplement relating to any series of debt securities
being offered will include specific terms relating to the offering. These terms
will include some or all of the following:
o the title of the debt securities;
o the total principal amount of the debt securities;
o whether the debt securities are senior debt securities or
subordinated debt securities;
o whether a series of subordinated debt is junior in any respect
to another series of subordinated debt;
o whether we will issue the debt securities in individual
certificates to each holder or in the form of temporary or
permanent global securities held by a depository on behalf of
holders;
o the date or dates on which the principal of and any premium on
the debt securities will be payable;
o any interest rate, the date from which interest will accrue,
interest payment dates and record dates for interest payments;
o any right to extend or defer the interest payment periods and
the duration of the extension;
o whether and under what circumstances any additional amounts
with respect to the debt securities will be payable;
o the place or places where payments on the debt securities will
be payable;
o whether the debt securities will be guaranteed by any of our
subsidiaries;
o any provisions for optional redemption or early repayment;
o any sinking fund or other provisions that would obligate us to
redeem, purchase or repay the debt securities prior to
maturity;
o the denominations in which we may issue the debt securities;
o whether payments on the debt securities will be payable in
foreign currency or currency units or another form, and
whether payments will be payable by reference to any index or
formula;
o the portion of the principal amount of the debt securities
that will be payable if the maturity is accelerated, if other
than the entire principal amount;
o any additional means of defeasance of the debt securities, any
additional conditions or limitations to defeasance of the debt
securities or any changes to those conditions or limitations;
o any changes or additions to the events of default or covenants
described in this prospectus;
11
o any restrictions or other provisions relating to the transfer
or exchange of the debt securities;
o any terms for the conversion or exchange of the debt
securities for other securities issued by Lennox or any other
entity;
o with respect to the subordinated indenture, any changes to the
subordination provisions for the subordinated debt securities;
and
o any other terms of the debt securities.
We may sell the debt securities at a discount, which may be
substantial, below their stated principal amount. Those debt securities may bear
no interest or interest at a rate that at the time of issuance is below market
rates.
If we sell any of the debt securities for any foreign currency or
currency unit or if payments on the debt securities are payable in any foreign
currency or currency unit, we will describe in the prospectus supplement the
restrictions, elections, material tax consequences, specific terms and other
information relating to those debt securities and the foreign currency or
currency unit.
SUBSEQUENT DISTRIBUTION TO HOLDERS OF TRUST SECURITIES. If we issue
debt securities to a Lennox trust in connection with the issuance of trust
preferred securities and trust common securities by that trust, those debt
securities subsequently may be distributed to the holders of those securities
either:
o upon the dissolution of the trust; or
o upon the occurrence of events that we will describe in the
prospectus supplement.
OUR SENIOR DEBT SECURITIES
Generally speaking, our senior debt securities will rank equally with
all of our other senior debt, except to the extent any such debt is secured by
our assets.
"Senior debt" is defined to include all debt, not expressed to be
subordinate or junior in right of payment to any other indebtedness of Lennox.
Unless we inform you otherwise in the prospectus supplement, the term
"debt" means:
o indebtedness for borrowed money;
o obligations evidenced by bonds, debentures, notes or similar
instruments;
o obligations, including reimbursement obligations, relating to
letters of credit or similar instruments;
o obligations to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued
expenses incurred in the ordinary course of business;
o capitalized lease obligations;
o debt of a third party secured by a lien on any asset of
Lennox;
o debt of others guaranteed by Lennox to the extent of the
guarantee; and
o obligations for claims under derivative products.
12
Any senior debt securities offered pursuant to the senior indenture
will be senior in right of payment to our subordinated debt securities.
OUR SUBORDINATED DEBT SECURITIES
Our subordinated debt securities will have a junior position to all of
our senior debt. Under the subordinated indenture, payment of the principal,
interest and any premium on the subordinated debt securities will generally be
subordinated and junior in right of payment to the prior payment in full of all
senior debt. Further, a series of subordinated debt may be junior in some
respects to another series of subordinated debt. The subordinated indenture will
provide that no payment of principal, interest and any premium on the
subordinated debt securities may be made in the event:
o we fail to pay the principal, interest, premium or any other
amounts on any senior debt when due; or
o we default in performing any other covenant (a "covenant
default") in any senior debt if the covenant default allows
the holders of that senior debt to accelerate the maturity of
the senior debt they hold.
The subordinated indenture will not limit the amount of senior debt
that we may incur.
Unless we inform you otherwise in the prospectus supplement, a covenant
default will prevent us from making payments on the subordinated debt securities
only for up to 180 days after holders of the senior debt give the trustee for
the subordinated debt securities notice of a covenant default.
The subordinated indenture will prohibit us from making for a specified
time period any payment of principal of or premium, if any, or interest on, or
sinking fund requirements for, the subordinated debt securities during the
continuance of any default in respect of senior debt, unless and until the
default on the senior debt is cured or waived.
Upon any distribution of our assets in connection with any dissolution,
winding up, liquidation, reorganization, bankruptcy or other similar proceeding
relative to us, our creditors or our property, the holders of our senior debt
will first be entitled to receive payment in full of the principal thereof and
premium, if any, and interest due on the senior debt securities before the
holders of the subordinated debt securities are entitled to receive any payment
of the principal of and premium, if any, or interest on the subordinated debt
securities. Because of this subordination, if we become insolvent, our creditors
who are holders of our subordinated debt securities may recover less, ratably,
than holders of our senior debt securities.
The subordination does not affect our obligation, which is absolute and
unconditional, to pay, when due, principal of, premium, if any, and interest on
the subordinated debt securities. In addition, the subordination does not
prevent the occurrence of any default under the indenture.
GLOBAL CERTIFICATES
The debt securities of a series may be issued in whole or in part in
the form of one or more global certificates that will be deposited with a
depository identified in a prospectus supplement. The specific terms of the
depository arrangements with respect to any debt securities of a series will be
described in a prospectus supplement.
Unless otherwise specified in a prospectus supplement, debt securities
issued in the form of a global certificate to be deposited with a depository
will be represented by a global certificate registered in the name of the
depository or its nominee. Upon the issuance of a global certificate in
registered form, the depository for the global certificate will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the debt securities represented by the global certificate to the accounts of
institutions that have accounts with the depository or its nominee. The
depository or its nominee are referred to in this prospectus as participants.
The accounts to be credited shall be designated by the underwriters or agents of
the debt securities, or by us if the debt securities are offered and sold
directly by us.
13
Ownership of beneficial interests in a global certificate will be
limited to participants or persons that may hold interests through participants.
Ownership of beneficial interests by participants in a global certificate will
be shown on, and the transfer of that ownership interest will be effected only
through, records maintained by the depository or its nominee for the global
certificate. Ownership of beneficial interests in a global certificate by
persons that hold through participants will be shown on, and the transfer of
that ownership interest within a participant will be effected only through,
records maintained by that participant. The laws of some jurisdictions require
that some purchasers of securities take physical delivery of their securities in
definitive form. These limits and laws may impair your ability to transfer
beneficial interests in a global certificate.
So long as the depository for a global certificate in registered form,
or its nominee, is the registered owner of the global certificate, the
depository or its nominee, as the case may be, will be considered the sole owner
or holder of the debt securities of the series represented by the global
certificate for all purposes under the indentures. Except as set forth below,
owners of beneficial interests in a global certificate will not be entitled to
have debt securities of the series represented by the global certificate
registered in their names, will not receive or be entitled to receive physical
delivery of debt securities in definitive form, and will not be considered the
owners or holders of the global certificate under the applicable indenture.
Payment of principal of, premium, if any, and any interest on debt
securities of a series registered in the name of or held by a depository or its
nominee will be made to the depository or its nominee, as the case may be, as
the registered owner or the holder of a global certificate representing the debt
securities. None of us, the trustee, any paying agent, or the applicable debt
security registrar for the debt securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a global certificate for debt securities or
for maintaining, supervising or reviewing any records relating to beneficial
ownership interests.
We expect that the depository for debt securities of a series, upon
receipt of any payment of principal, premium or interest in respect of a
permanent global certificate, will credit immediately participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of the global certificate as shown on the records of the
depository. We also expect that payments by participants to owners of beneficial
interests in a global certificate held through those participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in street name, and those payments will be the responsibility of the
participants. However, we have no control over the practices of the depository
and/or the participants and there can be no assurance that these practices will
not be changed.
Unless it is exchanged in whole or in part for debt securities in
definitive form, a global certificate may generally be transferred only as a
whole unless it is being transferred to particular nominees of the depository.
Unless otherwise stated in any prospectus supplement, The Depository
Trust Company, New York, New York will act as depository. Beneficial interests
in global certificates will be shown on, and transfers of global certificates
will be effected only through, records maintained by The Depository Trust
Company and its participants.
EVENTS OF DEFAULT
Under the indentures an event of default, unless a prospectus
supplement provides otherwise, will mean any of the following:
o our failure to pay principal of or any premium on any debt
securities of that series when due, regardless of whether such
payment became due because of maturity, redemption,
acceleration or otherwise, or is required by any sinking fund
established with respect to such series;
o our failure to pay interest or any required additional amounts
on any debt securities of that series for 30 days;
o our failure to comply with any of our covenants or agreements
in the debt securities of that series or the applicable
indenture, other than an agreement or covenant that we have
included in that indenture
14
solely for the benefit of other series of debt securities, for
the period of days specified in the applicable prospectus
supplement after written notice by the trustee or by the
holders of at least 25% in principal amount of all the
outstanding debt securities issued under that indenture that
are affected by that failure;
o certain defaults with respect to our debt (other than the debt
securities of that series) in an aggregate principal amount in
excess of that dollar amount specified in the related
prospectus supplement and supplemental indenture for the debt
securities, which consists of the failure to make any payment
at maturity or that results in acceleration of the maturity of
such debt;
o specified events involving our bankruptcy, insolvency or
reorganization; or
o any other event of default provided for that series of debt
securities.
An event of default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under an indenture. The trustee may withhold notice to the
holders of debt securities of any default (except in the payment of principal or
interest) if it considers on good faith that the withholding of notice is in the
best interests of the holders.
If an event of default for any series of debt securities occurs and is
continuing, the trustee or the holders of at least 25% in principal amount of
the outstanding debt securities of the series affected by the default (or, in
some cases, 25% in principal amount of all senior debt securities or
subordinated debt securities affected, voting as one class) may declare the
principal of and all accrued and all unpaid interest on those debt securities to
be due and payable. If an event of default relating to events of bankruptcy,
insolvency or reorganization occurs, the principal of and all accrued and unpaid
interest on all the debt securities will become immediately due and payable
without any action on the part of the applicable trustee or any holder. The
holders of a majority in principal amount of the outstanding debt securities of
the series affected by the default (or of all senior debt securities or
subordinated debt securities affected, voting as one class) may in some cases
rescind this accelerated payment requirement. Depending on the terms of our
other indebtedness, an event of default under either of the indentures may give
rise to cross defaults on our other indebtedness.
The indentures will limit the right to institute legal proceedings. No
holder of any debt securities will have the right to bring a claim under an
indenture unless:
o the holder has given written notice of a continuing default
for that series to the trustee;
o the holders of not less than 25% of the aggregate principal
amount of debt securities of the series shall have made a
written request to the trustee to bring the claim and
furnished the trustee reasonable indemnification as the
trustee may require;
o the trustee has not commenced an action within 60 days of
receipt of the notice and indemnification; and
o during the 60-day period following receipt of the notice and
indemnification, no direction inconsistent with the request
has been given to the trustee by the holders of not less than
a majority of the aggregate principal amount of the debt
securities of the series then outstanding.
Subject to applicable law and any applicable subordination provisions, the
holders of debt securities may enforce payment of the principal of or premium,
if any, or interest on their debt securities.
Except as provided in the next sentence, the holders of a majority in
aggregate principal amount of any series of debt securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
trustee or exercising any power conferred on the trustee. The trustee may
decline to follow the holders' direction if, being advised by counsel, the
trustee determines that the action is not lawful, or if the trustee in
15
good faith determines that the action would unduly prejudice the holders of the
debt securities not taking part in the action or would impose personal liability
on the trustee.
Each indenture will provide that, in case an event of default in
respect of a particular series of debt securities has occurred, the trustee must
use the degree of care of a prudent man in the conduct of his own affairs.
Subject to these provisions, the trustee is under no obligation to exercise any
of its rights or power under the indenture at the request of any of the holders
of the debt securities of any series unless they have furnished to the trustee
reasonable security or indemnity.
We will be required to furnish to the trustee an annual statement as to
our fulfillment of all of our obligations under the relevant indenture.
DEFEASANCE
When we use the term "defeasance," we mean discharge from some or all
of our obligations under an indenture. If we deposit with the applicable trustee
funds or government securities sufficient to make payments on the debt
securities of a series on the dates those payments are due and payable, then, at
our option, either of the following will occur:
o we will be discharged from our obligations with respect to the
debt securities of that series ("legal defeasance"); or
o we will no longer have any obligation to comply with the
restrictive covenants under the applicable indenture, and the
related events of default will no longer apply to us, but some
of our other obligations under the indenture and the debt
securities of that series, including our obligation to make
payments on those debt securities, will survive ("covenant
defeasance").
If we effect a covenant defeasance of a series of debt securities, the
holders of the debt securities of the series affected will not be entitled to
the benefits of the applicable indenture, except for our obligations to:
o register the transfer or exchange of debt securities;
o replace stolen, lost or mutilated debt securities; and
o maintain paying agencies and hold moneys for payment in trust.
Unless we inform you otherwise in the prospectus supplement, we will be
required to deliver to the applicable trustee an opinion of counsel that the
deposit and related defeasance would not cause the holders of the debt
securities to recognize income, gain or loss for United States federal income
tax purposes. If we elect legal defeasance, that opinion of counsel must be
based on a ruling from the United States Internal Revenue Service or a change in
law to that effect.
CONSOLIDATION, MERGER OR SALE OF ASSETS
Each indenture will generally permit us to consolidate or merge with
another entity. The indentures will also permit us to sell all or substantially
all of our property and assets. However, we will only consolidate or merge with
or into any other entity, or sell all or substantially all of our assets, in
accordance with the terms and conditions of the indentures. The indentures
provide that we may consolidate with another entity to form a new entity, or
merge into any other entity, or transfer or dispose of our assets substantially
as an entirety to any other entity only if:
o the resulting or surviving entity assumes the due and punctual
payments on the debt securities and the performance of our
covenants and obligations under the applicable indenture and
the debt securities; and
16
o immediately after giving effect to the transaction, no default
or event of default would occur and be continuing.
The remaining or acquiring entity will be substituted for us in the
indentures with the same effect as if it had been an original party to the
indentures. Thereafter, the successor entity may exercise our rights and powers
under any indenture, in our name or in its own name. Any act or proceeding
required or permitted to be done by our board of directors or any of our
officers may be done by the board or officers of the successor entity.
MODIFICATION AND WAIVER
We may amend or supplement either indenture if the holders of a
majority in principal amount of the outstanding debt securities of all series
issued under the applicable indenture and affected by the amendment or
supplement, acting as one class, consent to it. Without the consent of the
holder of each debt security affected, however, no amendment or supplement may:
o reduce the amount of debt securities whose holders must
consent to an amendment, supplement or waiver;
o reduce the rate of or change the time for payment of interest
on any debt security;
o reduce the principal of, premium on or any mandatory sinking
fund payment for any debt security;
o change the stated maturity of any debt security;
o reduce any premium payable on the redemption of any debt
security or change the time at which any debt security may or
must be redeemed;
o change any obligation to pay additional amounts on any debt
security;
o make the payments on any debt security payable in any currency
or currency unit other than as the debt security originally
states;
o impair the holder's right to institute suit for the
enforcement of any payment on any debt security;
o make any change in the percentage of principal amount of debt
securities necessary to waive compliance with specified
provisions of the applicable indenture or to make any change
in the applicable indenture's provisions for modification;
o waive a continuing default or event of default regarding any
payment on any debt security; or
o with respect to the subordinated indenture, modify the
provisions relating to the subordination of any subordinated
debt security in a manner adverse to the holder of that
security.
We and the applicable trustee may agree to amend or supplement either
indenture or waive any provision of either indenture without the consent of any
holders of debt securities in some circumstances, including:
o to cure any ambiguity, omission, defect or inconsistency;
o to provide for the assumption of our obligations under the
indenture by a successor upon any merger, consolidation or
asset transfer;
o to provide for uncertificated debt securities in addition to
or in place of certificated debt securities or to provide for
bearer debt securities;
o to provide any security for or add guarantees of any series of
debt securities;
17
o to comply with any requirement to effect or maintain the
qualification of the indenture under the Trust Indenture Act
of 1939;
o to add covenants that would benefit the holders of any debt
securities or to surrender any rights we have under the
indenture;
o to add events of default with respect to any debt securities;
o to make any change that does not adversely affect any
outstanding debt securities of any series in any material
respect;
o to facilitate the defeasance or discharge of any series of
debt securities if that change does not adversely affect the
holders of debt securities of that series or any other series
under the indenture in any material respect; and
o to provide for the acceptance of a successor or another
trustee.
The holders of a majority in principal amount of the outstanding debt
securities of any series, or of all senior debt securities or subordinated debt
securities affected, voting as one class, may waive any existing or past default
or event of default with respect to those debt securities. Those holders may
not, however, waive any default or event of default in any payment on any debt
security or compliance with a provision that cannot be amended or supplemented
without the consent of each holder affected.
CERTIFICATES AND OPINIONS TO BE FURNISHED TO THE TRUSTEE
Each indenture will provide that, in addition to other certificates or
opinions that may be specifically required by other provisions of an indenture,
every time we ask the trustee to take action under the indenture, we must
provide a certificate of some of our officers and an opinion of counsel (who may
be our counsel) stating that, in the opinion of the signers, all conditions
precedent to the action have been complied with.
THE TRUSTEE
The Bank of New York will initially serve as the trustee under both our
senior and subordinated indentures. The Bank of New York is also the trustee
under our indenture dated May 8, 2002 relating to our $143,750,000 aggregate
principal amount of our 6.25% Convertible Subordinated Notes due June 1, 2009.
If an event of default occurs and is continuing, the trustee must use
the degree of care and skill of a prudent person in the conduct of his own
affairs. The trustee will become obligated to exercise any of its powers under
the indentures at the request of any of the holders of any debt securities only
after those holders have offered the trustee indemnity reasonably satisfactory
to it.
Each indenture limits the right of the trustee, if it is one of our
creditors, to obtain payment of claims or to realize on certain property
received for any such claim, as security or otherwise. The trustee may engage in
other transactions with us. If it acquires any conflicting interest, however, it
must eliminate that conflict or resign.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 200,000,000 shares of common
stock, par value $.01 per share, and 25,000,000 shares of preferred stock, par
value $.01 per share. Of the 200,000,000 shares of common stock authorized,
57,771,858 were outstanding as of September 30, 2002, 3,009,656 shares were held
in treasury and 13,481,635 shares have been reserved for issuance under our
incentive plans and employee stock purchase program. None of the preferred stock
was outstanding as of September 30, 2002.
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COMMON STOCK
The holders of our common stock are entitled to one vote per share on
all matters to be voted on by stockholders. Generally, all matters to be voted
on by stockholders must be approved by a majority (or, in the case of election
of directors, by a plurality) of the votes entitled to be cast by all shares of
common stock present in person or represented by proxy, voting together as a
single class, except as may be required by law and subject to any voting rights
granted to holders of any preferred stock. However, the removal of a director
from office, the approval and authorization of specified business combinations
and amendments to specified provisions of our certificate of incorporation each
require the approval of not less than 80% of the combined voting power of our
outstanding shares of stock entitled to vote generally in the election of
directors, voting together as a single class. See "-- Certificate of
Incorporation and Bylaw Provisions." The common stock does not have cumulative
voting rights.
Subject to the prior rights of the holders of any shares of our
preferred stock, the holders of our common stock shall be entitled to receive,
to the extent permitted by law, such dividends as may be declared from time to
time by our board of directors. On our liquidation, dissolution or winding up,
after payment in full of the amounts required to be paid to holders of preferred
stock, if any, all holders of common stock are entitled to share ratably in any
assets available for distribution to holders of shares of common stock.
The outstanding shares of our common stock are legally issued, fully
paid and nonassessable. The common stock does not have any preemptive,
subscription or conversion rights. Additional shares of authorized common stock
may be issued, as authorized by our board of directors from time to time,
without stockholder approval, except as may be required by applicable stock
exchange requirements.
PREFERRED STOCK
As of the date of this offering memorandum, no shares of preferred
stock are outstanding. Our board of directors may authorize the issuance of
preferred stock in one or more series and may determine, for the series, the
designations, powers, preferences and rights of such series, and the
qualifications, limitations and restrictions of the series, including:
o the designation of the series;
o the consideration for which the shares of any such series are
to be issued;
o the rate or amount per annum, if any, at which holders of the
shares of such series shall be entitled to receive dividends,
the dates on which such dividends shall be payable, whether
the dividends shall be cumulative or noncumulative, and if
cumulative, the date or dates from which such dividends shall
be cumulative;
o the redemption rights and price or prices, if any, for shares
of the series;
o the amounts payable on and the preferences, if any, of shares
of the series in the event of dissolution or upon distribution
of our assets;
o whether the shares of the series will be convertible into or
exchangeable for other of our securities, and the price or
prices or rate or rates at which conversion or exchange shall
be exercised;
o the terms and amounts of any sinking fund provided for the
purchase or redemption of shares of the series;
o the voting rights, if any, of the holders of shares of the
series; and
o such other preferences and rights, privileges and restrictions
applicable to any such series as may be permitted by law.
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Although our board of directors has no intention at the present time of
doing so, it could issue a series of preferred stock that could, depending on
the terms of such series, impede the completion of a merger, tender offer or
other takeover attempt. Our board of directors will make any determination to
issue such shares based on its judgment as to our best interests and the best
interests of our stockholders. Our board of directors, in so acting, could issue
preferred stock having terms that could discourage a potential acquiror from
making, without first negotiating with our board of directors, an acquisition
attempt through which such acquiror may be able to change the composition of our
board of directors, including a tender offer or other transaction that some, or
a majority, of our stockholders might believe to be in their best interests or
in which stockholders might receive a premium for their stock over the then
current market price of such stock.
BUSINESS COMBINATION STATUTE
As a corporation organized under the laws of the State of Delaware, we
are subject to Section 203 of the Delaware General Corporation Law, which
restricts specified business combinations between us and an "interested
stockholder" or its affiliates or associates for a period of three years
following the time that the stockholder becomes an "interested stockholder." In
general, an "interested stockholder" is defined as a stockholder owning 15% or
more of our outstanding voting stock. The restrictions do not apply if:
o prior to an interested stockholder becoming such, our board of
directors approved either the business combination or the
transaction which resulted in the stockholder becoming an
interested stockholder;
o upon completion of the transaction which resulted in any
person becoming an interested stockholder, such interested
stockholder owns at least 85% of our voting stock outstanding
at the time the transaction commenced, excluding shares owned
by employee stock ownership plans and persons who are both
directors and officers of Lennox; or
o at or subsequent to the time an interested stockholder becomes
such, the business combination is both approved by our board
of directors and authorized at an annual or special meeting of
our stockholders, not by written consent, by the affirmative
vote of at least 662/3% of the outstanding voting stock not
owned by the interested stockholder.
Under some circumstances, Section 203 makes it more difficult for a
person who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period, although the
stockholders may elect to exclude a corporation from the restrictions imposed
under Section 203. Our certificate of incorporation does not exclude us from the
restrictions imposed under Section 203.
CERTIFICATE OF INCORPORATION AND BYLAW PROVISIONS
The summary below describes provisions of our certificate of
incorporation and bylaws. The provisions of our certificate of incorporation and
bylaws discussed below may have the effect, either alone or in combination with
the provisions of Section 203 discussed above, of making more difficult or
discouraging a tender offer, proxy contest or other takeover attempt that is
opposed by our board of directors but that a stockholder might consider to be in
such stockholder's best interest. Those provisions include:
o restrictions on the rights of stockholders to remove
directors;
o prohibitions against stockholders calling a special meeting of
stockholders or acting by unanimous written consent in lieu of
a meeting;
o requirements for advance notice of actions' proposed by
stockholders for consideration at meetings of the
stockholders; and
o restrictions on business combination transactions with any
person, entity or group that beneficially owns at least 10% of
our aggregate voting stock -- such person, entity or group is
sometimes referred to as a "Related Person."
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CLASSIFIED BOARD OF DIRECTORS; REMOVAL; NUMBER OF DIRECTORS, FILLING
VACANCIES
Our certificate of incorporation and bylaws provide that our board of
directors shall be divided into three classes, designated Class I, Class II and
Class III, with the classes to be as nearly equal in number as possible. The
term of office of each class shall expire at the third annual meeting of
stockholders for the election of directors following the election of such class.
Each director is to hold office until his or her successor is duly elected and
qualified, or until his or her earlier resignation or removal.
Our bylaws provide that the number of directors will be fixed from time
to time by a resolution adopted by our board of directors; provided that the
number so fixed shall not be more than 15 nor less than three directors. Our
bylaws also provide that any vacancies will be filled only by the affirmative
vote of a majority of the remaining directors, even if less than a quorum.
Accordingly, absent an amendment to the bylaws, our board of directors could
prevent any stockholder from enlarging our board of directors and filling the
new directorships with such stockholder's own nominees. Moreover, our
certificate of incorporation and bylaws provide that directors may be removed
only for cause and only upon the affirmative vote of holders of at least 80% of
our voting stock at a special meeting of stockholders called expressly for that
purpose.
The classification of directors could have the effect of making it more
difficult for stockholders to change the composition of our board of directors.
At least two annual meetings of stockholders, instead of one, are generally
required to effect a change in a majority of our board of directors. Such a
delay may help ensure that our directors, if confronted by a holder attempting
to force a proxy contest, a tender or exchange offer, or an extraordinary
corporate transaction, would have sufficient time to review the proposal as well
as any available alternatives to the proposal and to act in what they believe to
be the best interest of the stockholders. The classification provisions will
apply to every election of directors, however, regardless of whether a change in
the composition of our board of directors would be beneficial to us and our
stockholders and whether or not a majority of our stockholders believe that such
a change would be desirable.
The classification provisions could also have the effect of
discouraging a third party from initiating a proxy contest, making a tender
offer or otherwise attempting to obtain control of us, even though such an
attempt might be beneficial to us and our stockholders. The classification of
our board of directors could thus increase the likelihood that incumbent
directors will retain their positions. In addition, because the classification
provisions may discourage accumulations of large blocks of our stock by
purchasers whose objective is to take control of us and remove a majority of our
board of directors, the classification of our board of directors could tend to
reduce the likelihood of fluctuations in the market price of the common stock
that might result from accumulations of large blocks. Accordingly, stockholders
could be deprived of opportunities to sell their shares of common stock at a
higher market price than might otherwise be the case.
NO STOCKHOLDER ACTION BY WRITTEN CONSENT, SPECIAL MEETINGS
Our certificate of incorporation and bylaws provide that stockholder
action can be taken only at an annual or special meeting of stockholders and
stockholder action may not be taken by written consent in lieu of a meeting.
Special meetings of stockholders can be called only by our board of directors by
a resolution adopted by a majority of our board of directors, or by the chairman
of the board, vice chairman or the president. Moreover, the business permitted
to be conducted at any special meeting of stockholders is limited to the
business brought before the meeting under the notice of meeting given by us.
The provisions of our certificate of incorporation and bylaws
prohibiting stockholder action by written consent and permitting special
meetings to be called only by the chairman, vice chairman or president, or at
the request of a majority of our board or directors, may have the effect of
delaying consideration of a stockholder proposal until the next annual meeting.
The provisions would also prevent the holders of a majority of our voting stock
from unilaterally using the written consent procedure to take stockholder
action. Moreover, a stockholder could not force stockholder consideration of a
proposal over the opposition of the chairman, vice chairman or president, or a
majority of our board of directors, by calling a special meeting of stockholders
prior to the time such parties believe such consideration to be appropriate.
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ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS AND STOCKHOLDER
PROPOSALS
Our bylaws establish an advance notice procedure for stockholders to
make nominations of candidates for election as directors or bring other business
before an annual meeting of stockholders.
The stockholder notice procedure provides that only persons who are
nominated by, or at the direction of, our board of directors, or by a
stockholder who has given timely written notice containing specified information
to our secretary prior to the meeting at which directors are to be elected, will
be eligible for election as our directors. The stockholder notice procedure also
provides that at an annual meeting only such business may be conducted as has
been brought before the meeting by, or at the direction of, the chairman of the
board of directors, or in the absence of the chairman of the board, the
president, or by a stockholder who has given timely written notice containing
specified information to our secretary of such stockholder's intention to bring
such business before such meeting. Under the stockholder notice procedure, for
notice of stockholder nominations or proposals to be made at an annual meeting
to be timely, such notice must be received by us not less than 60 days nor more
than 90 days in advance of such meeting. For notice of stockholder nominations
or proposals to be made at a special meeting of stockholders to be timely, such
notice must be received by us not later than the close of business on the tenth
day following the date on which notice of such meeting is first given to
stockholders. However, in the event that less than 70 days notice or prior
public disclosure of the date of the meeting of stockholders is given or made to
the stockholders, to be timely, notice of a nomination or proposal delivered by
the stockholder must be received by our secretary not later than the close of
business on the tenth day following the day on which notice of the date of the
meeting of stockholders was mailed or such public disclosure was made to the
stockholders. If our board of directors or, alternatively, the presiding officer
at a meeting, in the case of a stockholder proposal, or the chairman of the
meeting, in the case of a stockholder nomination to our board of directors,
determines at or prior to the meeting that business was not brought before the
meeting or a person was not nominated in accordance with the stockholder notice
procedure, such business will not be conducted at such meeting, or such person
will not be eligible for election as a director, as the case may be.
By requiring advance notice of nominations by stockholders, the
stockholder notice procedure will afford our board of directors an opportunity
to consider the qualifications of the proposed nominees and, to the extent
considered necessary or desirable by our board of directors, to inform
stockholders about such qualifications. By requiring advance notice of other
proposed business, the stockholder notice procedure will also provide a more
orderly procedure for conducting annual meetings of stockholders and, to the
extent considered necessary or desirable by our board of directors, will provide
our board of directors with an opportunity to inform stockholders, prior to such
meetings, of any business proposed to be conducted at such meetings, together
with any recommendations as to our board of directors' position regarding action
to be taken regarding such business, so that stockholders can better decide
whether to attend such a meeting or to grant a proxy regarding the disposition
of any such business.
Although our bylaws do not give our board of directors any power to
approve or disapprove stockholder nominations for the election of directors or
proposals for action, they may have the effect of precluding a contest for the
election of directors or the consideration of stockholder proposals if the
proper procedures are not followed, and of discouraging or deterring a third
party from conducting a solicitation of proxies to elect its own slate of
directors or to approve its own proposal, without regard to whether
consideration of such nominees or proposals might be harmful or beneficial to us
and our stockholders.
FAIR PRICE PROVISION
Our certificate of incorporation contains a "fair price" provision that
applies to specified business combination transactions involving any person,
entity or group that beneficially owns at least 10% of our aggregate voting
stock -- such person, entity or group is sometimes referred to as a "related
person." This provision requires the affirmative vote of the holders of not less
than 80% of our voting stock to approve specified transactions between a related
person and us or our subsidiaries, including:
o any merger, consolidation or share exchange;
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o any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of our assets, or the assets of any of our
subsidiaries having a fair market value of more than 10% of
our total consolidated assets, or assets representing more
than 10% of our earning power and our subsidiaries taken as a
whole, which is referred to as a "substantial part";
o any sale, lease, exchange, mortgage, pledge, transfer or other
disposition to or with us or any of our subsidiaries of all or
a substantial part of the assets of a related person;
o the issuance or transfer of any of our securities or any of
our subsidiaries by us or any of our subsidiaries to a related
person;
o any reclassification of securities, recapitalization, or any
other transaction involving us or any of our subsidiaries that
would have the effect of increasing the voting power of a
related person;
o the adoption of a plan or proposal for our liquidation or
dissolution proposed by or on behalf of a related person;
o the acquisition by or on behalf of a related person of shares
constituting a majority of our voting power; and
o the entering into of any agreement, contract or other
arrangement providing for any of the transactions described
above.
This voting requirement will not apply to certain transactions,
including:
o any transaction approved by a two-thirds vote of the
continuing directors; or
o any transaction in which:
o the consideration to be received by the holders of
common stock, other than the related person involved
in the business combination, is not less in amount
than the highest per share price paid by the related
person in acquiring any of its holdings of common
stock; and
o if necessary, a proxy statement complying with the
requirements of the Securities Exchange Act of 1934
shall have been mailed at least 30 days prior to any
vote on such business combination to all of our
stockholders for the purpose of soliciting
stockholder approval of such business combination.
This provision could have the effect of delaying or preventing a change
in control of us in a transaction or series of transactions that did not satisfy
the "fair price" criteria.
LIABILITY OF DIRECTORS, INDEMNIFICATION
Our certificate of incorporation provides that a director will not be
personally liable for monetary damages to us or our stockholders for breach of
fiduciary duty as a director, except for liability:
o for any breach of the director's duty of loyalty to us or our
stockholders;
o for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
o for paying a dividend or approving a stock repurchase in
violation of Section 174 of the Delaware General Corporation
Law; or
o for any transaction from which the director derived an
improper personal benefit.
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Any amendment or repeal of such provision shall not adversely affect
any right or protection of a director existing under such provision for any act
or omission occurring prior to such amendment or repeal.
Our bylaws provide that each person who at any time serves or served as
one of our directors or officers, or any person who, while one of our directors
or officers, is or was serving at our request as a director or officer of
another corporation, partnership, joint venture, trust or other enterprise,
shall be entitled to indemnification and the advancement of expenses from us,
and to the fullest extent, permitted by Section 145 of the Delaware General
Corporation Law or any successor statutory provision. We will indemnify any
person who was or is a party to any threatened, pending or completed action,
suit or proceeding because he or she is or was one of our directors or officers,
or is or was serving at our request as a director or officer of another
corporation, partnership or other enterprise. However, as provided in Section
145, this indemnification will only be provided if the indemnitee acted in good
faith and in a manner he or she reasonably believed to be in, or not opposed to,
our best interests.
AMENDMENTS
Our certificate of incorporation provides that we reserve the right to
amend, alter, change, or repeal any provision contained in our certificate of
incorporation, and all rights conferred to stockholders are granted subject to
such reservation. The affirmative vote of holders of not less than 80% of our
voting stock, voting together as a single class, shall be required to alter,
amend, adopt any provision inconsistent with or repeal specified provisions of
our certificate of incorporation, including those provisions discussed in this
section. In addition, the 80% vote described in the prior sentence shall not be
required for any alteration, amendment, adoption of inconsistent provision or
repeal of the "fair price" provision discussed under "-- Fair Price Provision"
above which is recommended to the stockholders by two-thirds of our continuing
directors and such alteration, amendment, adoption of inconsistent provision or
repeal shall require the vote, if any, required under the applicable provisions
of the Delaware General Corporation Law and our certificate of incorporation. In
addition, our certificate of incorporation provides that stockholders may only
adopt, amend or repeal our bylaws by the affirmative vote of holders of not less
than 80% of our voting stock, voting together as a single class. Our bylaws may
be amended by our board of directors.
RIGHTS PLAN
On July 27, 2000, our board of directors declared a dividend of one
preferred stock purchase right (individually, a "right" and collectively, the
"rights") to stockholders of record at the close of business on August 7, 2000
and approved the further issuance of rights with respect to all shares of common
stock that are subsequently issued. The rights expire on July 27, 2010. Each
right entitles the holder, under certain circumstances, to purchase from us one
one-hundredth of a share of our Series A Junior Participating Preferred Stock at
an exercise price of $75.00 per fractional share subject to certain adjustments.
Initially, the rights are attached to outstanding certificates
representing our common stock, and no separate certificates representing the
rights are distributed. The rights will separate from our common stock and will
become exercisable upon the earlier of
o ten days following a public announcement or disclosure that a
person or group (an "acquiring person") becomes the beneficial
owner of 15% or more of our outstanding common stock; or
o ten days following the commencement of a tender offer or
exchange offer which would result in the offeror becoming an
acquiring person.
Lineal descendants of D.W. Norris (and their spouses) and trusts
established primarily for the benefit of such lineal descendants (and their
spouses) will not become an acquiring person and will not be counted as
affiliates or associates of any other person in determining whether such person
is an acquiring person, in each case as long as the primary purpose for holding
shares in us is not to effect an extraordinary corporate transaction. In
addition, holders of 1% or more of our common stock which are identified in the
prospectus relating to our initial public offering are also excluded from
becoming an acquiring person.
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If the rights become exercisable, each right (other than rights held by
the acquiring person) will entitle the holder to purchase, at a price equal to
the exercise price of the right, a number of shares of our common stock having a
then-current market value of twice the exercise price of the right. If at any
time from and after the time an acquiring person becomes such we agree to merge
into another entity or we sell more than 50% of our assets, each right (other
than rights held by the acquiring person) will entitle the holder to purchase,
at a price equal to the exercise price of the right, a number of shares of
common stock of such entity having a then-current market value of twice the
exercise price.
We will generally be entitled to redeem the rights at a price of $0.01
per right at any time prior to the day a person becomes an acquiring person. The
description and terms of the rights are set forth in a Rights Agreement dated as
of July 27, 2000 entered into between us and the rights agent named therein. The
Rights Agreement was filed as an exhibit to our Current Report on Form 8-K dated
July 27, 2000, filed with the SEC.
The Rights Agreement approved by our board of directors is designed to
protect and maximize the value of our outstanding equity interests in the event
of an unsolicited attempt to acquire us in a manner or on terms not approved by
our board of directors and that prevent our stockholders from realizing the full
value of their shares of our common stock. However, the rights may have the
effect of rendering more difficult or discouraging an acquisition of us that is
deemed undesirable by our board of directors. The rights may cause substantial
dilution to a person or group that attempts to acquire us on terms or in a
manner not approved by our board of directors, except pursuant to an offer
conditioned upon the negation, purchase or redemption of the rights.
RIGHTS TO PURCHASE SECURITIES AND OTHER PROPERTY
Our certificate of incorporation authorizes our board of directors to
create and issue rights, warrants and options entitling the holders of them to
purchase from us shares of any class or classes of our capital stock or other
securities or property upon such terms and conditions as our board of directors
may deem advisable.
LISTING
Our common stock is listed on the New York Stock Exchange under the
trading symbol "LII."
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is Mellon
Investor Services LLC.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase any combination of debt securities,
common stock, preferred stock, rights or other securities of Lennox or any other
entity. We may issue warrants independently or together with other securities.
Warrants sold with other securities may be attached to or separate from the
other securities. We will issue warrants under one or more warrant agreements
between us and a warrant agent that we will name in the prospectus supplement.
The prospectus supplement relating to any warrants we are offering will
include specific terms relating to the offering. We will file the form of any
warrant agreement with the SEC, and you should read the warrant agreement for
provisions that may be important to you. The prospectus supplement will include
some or all of the following terms:
o the title of the warrants;
o the aggregate number of warrants offered;
o the designation, number and terms of the debt securities,
common stock, preferred stock, rights or other securities
purchasable upon exercise of the warrants, and procedures by
which the number of securities purchasable may be adjusted;
o the exercise price of the warrants;
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o the dates or periods during which the warrants are
exercisable;
o the designation and terms of any securities with which the
warrants are issued;
o if the warrants are issued as a unit with another security,
the date, if any, on and after which the warrants and the
other security will be separately transferable;
o if the exercise price is not payable in U.S. dollars, the
foreign currency, currency unit or composite currency in which
the exercise price is denominated;
o any minimum or maximum amount of warrants that may be
exercised at any one time; and
o any terms, procedures and limitations relating to the
transferability, exchange or exercise of the warrants.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
We may elect to offer shares of our preferred stock represented by
depositary shares. The shares of any series of the preferred stock underlying
the depositary shares will be deposited under a separate deposit agreement
between Lennox and a bank or trust company we will name in the prospectus
supplement.
Subject to the terms of the deposit agreement, each holder of a
depositary share will be entitled, proportionately, to all the rights,
preferences and privileges of the preferred stock represented by that depositary
share, including dividend, voting, redemption, conversion, exchange and
liquidation rights. The depositary shares will be evidenced by depositary
receipts issued under the deposit agreement. Each receipt will represent the
applicable interest in a number of shares of a particular series of the
preferred stock, which we will describe in the prospectus supplement.
We have summarized below selected provisions of the deposit agreement,
the related depositary shares and depositary receipts evidencing those shares.
This summary is not complete. We will file the form of deposit agreement and the
form of depositary receipts with the SEC before we issue any depositary shares,
and you should read those documents for provisions that may be important to you.
A holder of depositary shares will be entitled to receive the whole
number of shares of preferred stock underlying those depositary shares. Holders
will not be entitled to receive fractional shares. If the depositary receipts
delivered by the holder evidence a number of depositary shares in excess of the
whole number of shares to be withdrawn, the depositary will deliver to that
holder at the same time a new depositary receipt for the excess number of
depositary shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
The depositary will distribute all cash dividends or other cash
distributions received with respect to the preferred stock to the record holders
of depositary receipts in proportion to the number of depositary shares owned by
those holders.
If there is a distribution other than in cash, the depositary will
distribute property received by it to the record holders of depositary receipts
in proportion, insofar as possible, to the number of depositary shares owned by
those holders. If the depositary determines that it is not feasible to make such
a distribution, it may, with our approval, adopt any method that it deems
equitable and practicable to effect the distribution, including a sale of the
property and distribution of the net proceeds from the sale to the holders.
The amount distributed in any of the above cases will be reduced by any
amount we or the depositary is required to withhold on account of taxes.
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CONVERSION AND EXCHANGE
If any preferred stock underlying the depositary shares is subject to
provisions relating to its conversion or exchange as described in the prospectus
supplement, each record holder of depositary shares will have the right or
obligation to convert or exchange those depositary shares in accordance with
those provisions.
REDEMPTION OF DEPOSITARY SHARES
Whenever we redeem a share of preferred stock held by the depositary,
the depositary will redeem on the same redemption date a proportionate number of
depositary shares representing the shares of preferred stock redeemed. The
redemption price per depositary share will be equal to the aggregate redemption
price payable with respect to the number of shares of preferred stock underlying
the depositary shares. If fewer than all the depositary shares are to be
redeemed, the depositary shares to be redeemed will be selected by lot or
proportionately as we may determine.
VOTING
Upon receipt of notice of any meeting at which the holders of the
preferred stock underlying the depositary shares are entitled to vote, the
depositary will mail the information contained in the notice to the record
holders of the depositary receipts. Each record holder of the depositary
receipts on the record date, which will be the same date as the record date for
the preferred stock, may then instruct the depositary as to the exercise of the
voting rights pertaining to the number of shares of preferred stock underlying
that holder's depositary shares. The depositary will try, as far as practicable,
to vote the number of shares of preferred stock underlying the depositary shares
in accordance with the instructions, and Lennox will agree to take all
reasonable action that the depositary deems necessary to enable the depositary
to do so. The depositary will abstain from voting the preferred stock to the
extent that it does not receive specific written instructions from holders of
depositary shares representing the preferred stock.
RECORD DATE
Whenever:
o any cash dividend or other cash distribution becomes payable,
any distribution other than cash is made, or any rights,
preferences or privileges are offered with respect to the
preferred stock, or
o the depositary receives notice of any meeting at which holders
of preferred stock are entitled to vote or of which holders of
preferred stock are entitled to notice, or of the mandatory
conversion of or any election by Lennox to call for the
redemption of any preferred stock,
the depositary will in each instance fix a record date, which will be the same
as the record date for the preferred stock, for the determination of the holders
of depositary receipts:
o who will be entitled to receive the dividend, distribution,
rights, preferences or privileges or the net proceeds of any
sale, or
o who will be entitled to give instructions for the exercise of
voting rights at any such meeting or to receive notice of the
meeting or the redemption or conversion.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
We and the depositary may at any time agree to amend the form of
depositary receipt and any provision of the deposit agreement. However, any
amendment that adversely alters the rights of holders of depositary shares in
any material respect will not be effective unless the amendment has been
approved by the holders of at least a majority of the depositary shares then
outstanding. The deposit agreement may be terminated by Lennox or by the
depositary only if all outstanding depositary shares have been redeemed or if a
final distribution on the underlying preferred stock has been made to the
holders of the depositary shares in connection with the liquidation, dissolution
or winding up of Lennox.
CHARGES OF DEPOSITARY
We will pay all charges of the depositary, including:
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o charges in connection with the initial deposit of the
preferred stock;
o the initial issuance of the depositary receipts;
o the distribution of information to the holders of depositary
receipts with respect to matters on which preferred stock is
entitled to vote; and
o withdrawals of the preferred stock by the holders of
depositary receipts or upon redemption or conversion of the
preferred stock.
Holders of depositary shares will pay taxes (including any transfer taxes) and
other governmental charges and any other charges expressly provided in the
deposit agreement to be at the expense of those holders.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may at any time resign or be removed by Lennox. Any
resignation or removal will become effective upon the acceptance by the
depositary's successor of its appointment. If Lennox has not appointed a
successor depositary and the successor depositary has not accepted its
appointment within 60 days after the depositary delivered a resignation notice
to Lennox, the depositary may terminate the deposit agreement.
DESCRIPTION OF STOCK PURCHASE
CONTRACTS AND STOCK PURCHASE UNITS
We may issue stock purchase contracts, including contracts obligating
holders to purchase from us, and us to sell to the holders, or for us to issue
in exchange for other securities, a specified number of shares of our common
stock or preferred stock (or a range of numbers of shares in accordance with a
predetermined formula) at a future date or dates or upon the occurrence of
specified events. The price per share of common stock or preferred stock may be
fixed at the time the stock purchase contracts are issued or may be determined
by reference to a specific formula set forth in the stock purchase contracts.
We may issue the stock purchase contracts separately or as a part of
units, often known as stock purchase units, consisting of a stock purchase
contract and any combination of:
o our senior debt securities or subordinated debt securities,
o debt obligations of third parties, including U.S. Treasury
securities, or
o trust preferred securities of a Lennox trust,
securing the holder's obligations to purchase the common stock or preferred
stock under the stock purchase contracts.
The stock purchase contracts may require us to make periodic payments
to the holders of the stock purchase units or vice versa, and those payments may
be unsecured or prefunded on some basis. The stock purchase contracts may
require holders to secure their obligations in a specified manner, and in
specified circumstances we may deliver newly issued prepaid stock purchase
contracts, often known as prepaid securities, upon release to a holder of any
collateral securing that holder's obligations under the original stock purchase
contract.
The applicable prospectus supplement will describe the terms of any
stock purchase contracts or stock purchase units and, if applicable, prepaid
securities. That description will not be complete. For more information, you
should review the stock purchase contracts and, if applicable, the collateral
arrangements and depositary arrangements relating to those stock purchase
contracts or stock purchase units and any prepaid securities and the document
under which the prepaid securities will be issued. We will file forms of these
documents with the SEC before we issue any stock purchase contracts or stock
purchase units and, if applicable, prepaid securities.
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DESCRIPTION OF TRUST PREFERRED SECURITIES
TRUST PREFERRED SECURITIES
GENERAL
Each Lennox trust may issue only one series of trust preferred
securities. The amended and restated declaration of trust of each trust will
authorize that trust to issue one series of trust preferred securities of that
trust. We have summarized selected provisions of the trust preferred securities
below. This summary is not complete. We have filed the form of amended and
restated declaration of trust providing for the trust preferred securities with
the SEC as an exhibit to the registration statement, and you should read that
document for provisions that may be important to you. Please read "Lennox Trust
I and Lennox Trust II" for additional information about the trusts.
The prospectus supplement relating to trust preferred securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following:
o the designation of the trust preferred securities;
o the number of trust preferred securities issued by the trust;
o the annual distribution rate (or the method for determining
the rate), the distribution payment dates, the record dates
for distribution payments and the additional amounts, if any,
that may be payable with respect to the trust preferred
securities;
o whether distributions will be cumulative and, if so, the dates
from which distributions will be cumulative;
o the amounts that will be paid out of the assets of the trust
to the holders of trust preferred securities upon dissolution,
winding-up or termination of the trust;
o any repurchase or redemption provisions;
o any additional voting rights of the trust preferred
securities;
o terms for any conversion or exchange of the trust preferred
securities or the debt securities of Lennox held by that trust
into other securities;
o terms for any distribution of the debt securities to the
holders of the trust preferred securities; and
o any rights to defer distributions on the trust preferred
securities by extending the interest payment period on the
debt securities.
We also will describe in the prospectus supplement the material United
States federal income tax considerations applicable to any offering of trust
preferred securities.
Lennox will guarantee the trust preferred securities to the extent
described under "-- Trust Preferred Securities Guarantees."
VOTING
Holders of trust preferred securities will have limited voting rights,
relating only to the modification of the trust preferred securities and the
exercise of a trust's rights as holder of the debt securities and the preferred
securities guarantee. Holders of trust preferred securities will not be able to
appoint, remove or replace trustees, except in limited circumstances, or to
increase or decrease the number of trustees, because these rights will be vested
in the holder of the common securities of the trust. Lennox will own, directly
or indirectly, all of the common securities of each trust.
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DISTRIBUTIONS
Under each declaration of trust, the property trustee must make
distributions on the trust preferred securities of a trust to the extent that
the property trustee has cash on hand in the applicable property account to
permit such payment. The only funds available for distribution to the holders of
the trust preferred securities of a trust will be those received by the property
trustee on the debt securities held by the trust. If Lennox does not make
payments on the debt securities, the property trustee will not make
corresponding distributions on the trust preferred securities. Under each
declaration of trust, if and to the extent Lennox does make payments on the debt
securities, the property trustee will be obligated to make distributions on the
preferred and common securities of such trust on a pro rata basis.
Lennox will guarantee payment of distributions on the trust preferred
securities of a trust as and to the extent described under "--Trust Preferred
Securities Guarantees." A guarantee covers distributions and other payments on
the applicable trust preferred securities only if and to the extent that Lennox
has made a payment to the property trustee on the applicable debt securities. If
an event of default under the related declaration of trust has occurred and is
continuing, any funds available to make payments will be paid first to the
holders of the trust preferred securities pro rata based on the aggregate
liquidation amount of trust preferred securities held by those holders in
relation to the aggregate liquidation amount of all the outstanding trust
preferred securities. In that case, Lennox, as the holder of common securities
of a trust, would receive payments only after satisfaction of all amounts owed
to the holders of trust preferred securities.
EVENTS OF DEFAULT
If an event of default under the declaration of trust has occurred and
is continuing, the holders of a majority in liquidation amount of the trust
preferred securities may direct the property trustee to enforce the available
rights under the related declaration of trust, including rights available to the
property trustee as a holder of the applicable series of debt securities. If the
property trustee fails to enforce those rights, any holder of the related trust
preferred securities may provide written notice to the property trustee that the
holder will enforce those rights and, 30 days after submitting that request, the
holder may enforce those rights directly against Lennox to the fullest extent
permitted by law without first instituting any legal proceeding against the
property trustee or any other person.
If an event of default under the applicable declaration of trust has
occurred and is continuing and results from Lennox's failure to make payments on
the applicable series of debt securities when due, then any holder of the trust
preferred securities may directly institute a proceeding to enforce those
payments on the debt securities in an amount corresponding to the aggregate
liquidation amount of that holder's trust preferred securities. If a holder
brings a direct action, Lennox will be entitled to that holder's rights under
the applicable declaration of trust to the extent of any payment made by Lennox
to that holder. EXCEPT AS EXPRESSLY PROVIDED IN THE PRECEDING SENTENCES OR IN
THE APPLICABLE PROSPECTUS SUPPLEMENT, THE HOLDERS OF THE TRUST PREFERRED
SECURITIES WILL NOT BE ABLE TO EXERCISE DIRECTLY ANY OTHER REMEDY AVAILABLE TO
THE HOLDERS OF THE APPLICABLE SERIES OF DEBT SECURITIES.
TRUST PREFERRED SECURITIES GUARANTEES
Lennox will fully and unconditionally guarantee payments on the trust
preferred securities as described in this section. This guarantee covers the
following payments:
o periodic cash distributions on the trust preferred securities
out of funds held by the property trustee of the trust;
o payments on liquidation of each trust; and
o payments on redemption of trust preferred securities of each
trust.
Lennox will appoint The Bank of New York, as guarantee trustee, to hold
the guarantee for the benefit of the holders of trust preferred securities. We
have summarized selected provisions of the guarantees below. This summary is not
complete. We have filed the form of guarantee with the SEC as an exhibit to the
registration statement, and you should read that document for provisions that
may be important to you.
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Lennox will irrevocably and unconditionally agree to pay holders of
trust preferred securities in full the following amounts to the extent not paid
by the trust:
o any accumulated and unpaid distributions on the trust
preferred securities and any redemption price for trust
preferred securities called for redemption by the trust, if
and to the extent that Lennox has made corresponding payments
on the debt securities to the property trustee of the trust;
o payments upon the dissolution, winding-up or termination of
the trust equal to the lesser of:
o the liquidation amount plus all accumulated and
unpaid distributions on the trust preferred
securities to the extent the trust has funds legally
available for those payments, and
o the amount of assets of the trust remaining legally
available for distribution to the holders of trust
preferred securities in liquidation of the trust.
Lennox will not be required to make these liquidation payments if:
o the trust distributes the debt securities to the holders of
trust preferred securities in exchange for their trust
preferred securities; or
o the trust redeems the trust preferred securities in full upon
the maturity or redemption of the debt securities.
Lennox may satisfy its obligation to make a guarantee payment either by
making payment directly to the holders of trust preferred securities or to the
guarantee trustee for remittance to the holders or by causing the applicable
trust to make the payment to them.
Each guarantee is a guarantee from the time of issuance of the
applicable series of trust preferred securities. THE GUARANTEE ONLY COVERS,
HOWEVER, DISTRIBUTIONS AND OTHER PAYMENTS ON TRUST PREFERRED SECURITIES IF AND
TO THE EXTENT THAT LENNOX HAS MADE CORRESPONDING PAYMENTS ON THE DEBT SECURITIES
TO THE APPLICABLE PROPERTY TRUSTEE. IF LENNOX DOES NOT MAKE THOSE CORRESPONDING
PAYMENTS ON THE DEBT SECURITIES, THE TRUST WILL NOT HAVE FUNDS AVAILABLE FOR
PAYMENTS AND THAT TRUSTEE WILL NOT MAKE DISTRIBUTIONS ON THE TRUST PREFERRED
SECURITIES.
Lennox's obligations under the declaration of trust for each trust, the
guarantees, the debt securities and the associated indenture taken together will
provide a full and unconditional guarantee of payments due on the trust
preferred securities.
COVENANTS OF LENNOX
In each guarantee, Lennox will agree that, as long as any trust
preferred securities issued by the applicable trust are outstanding, Lennox will
not make the payments and distributions described below if:
o it is in default on its guarantee payments or other payment
obligations under the related guarantee;
o any event of default under the applicable declaration of trust
has occurred and is continuing; or
o Lennox has elected to defer payments of interest on the
related debt securities by extending the interest payment
period and that deferral period is continuing.
In these circumstances, Lennox will agree that it will not:
o make any payments on or repay, repurchase or redeem any debt
security of Lennox that ranks equally with or junior to the
debt securities;
o make any guarantee payments on any guarantee by Lennox of the
debt securities of any of its subsidiaries if that guarantee
ranks equally with or junior to the debt securities; or
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o declare or pay any dividends on, or redeem, purchase, acquire
or make a distribution or liquidation payment with respect to,
any capital stock of Lennox, other than:
o dividends or distributions in its capital stock or
options, warrants or rights to subscribe for or
purchase its capital stock;
o transactions relating to Lennox's stockholder rights
plan;
o as a result of a reclassification of its capital
stock or the exchange or conversion of one class or
series of its capital stock for another class or
series of its share capital;
o purchases of fractional interests in shares of its
capital stock pursuant to the conversion or exchange
provisions of the capital stock or the security being
converted or exchanged; and
o purchases or acquisitions of its capital stock in
connection with the satisfaction by it of its
obligations under any employee stock-based
compensation or benefit plan, dividend reinvestment
plan or stock purchase plan.
In addition, as long as trust preferred securities issued by any trust
are outstanding, Lennox will agree that it will:
o remain the sole direct or indirect owner of all the
outstanding common securities of that trust, except as
permitted by the applicable declaration of trust;
o permit the common securities of that trust to be transferred
only as permitted by the declaration of trust; and
o use reasonable efforts to cause that trust to continue to be
treated as a grantor trust for United States federal income
tax purposes, except in connection with a distribution of debt
securities to the holders of trust preferred securities as
provided in the declaration of trust, in which case the trust
would be dissolved.
AMENDMENTS AND ASSIGNMENT
Lennox and the guarantee trustee may amend each guarantee without the
consent of any holder of trust preferred securities if the amendment does not
adversely affect the rights of the holders in any material respect. In all other
cases, Lennox and the guarantee trustee may amend each guarantee only with the
prior approval of the holders of a majority in liquidation amount of the trust
preferred securities issued by the applicable trust. The manner in which Lennox
will obtain that approval will be described in the prospectus supplement.
Lennox may assign its obligations under the guarantees only in
connection with a consolidation, merger or asset sale involving Lennox permitted
under the indenture governing the debt securities.
TERMINATION OF THE GUARANTEE
Each guarantee will terminate upon:
o full payment of the redemption price of all trust preferred
securities of the applicable trust;
o distribution of the debt securities, or any securities into
which those debt securities are convertible, to the holders of
the trust preferred securities and common securities of that
trust in exchange for all the securities issued by that trust;
or
o full payment of the amounts payable upon liquidation of that
trust.
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Each guarantee will, however, continue to be effective or will be
reinstated if any holder of trust preferred securities must repay any amounts
paid on those trust preferred securities or under the guarantee.
STATUS OF THE GUARANTEE
Lennox' obligations under each guarantee will be unsecured and
effectively junior to all debt and preferred stock of its subsidiaries. We will
specify in the prospectus supplement the ranking of each guarantee with respect
to Lennox' capital stock and other liabilities, including other guarantees. BY
YOUR ACCEPTANCE OF THE TRUST PREFERRED SECURITIES, YOU AGREE TO ANY
SUBORDINATION PROVISIONS AND OTHER TERMS OF THE RELATED GUARANTEE.
Each guarantee will be deposited with the guarantee trustee to be held
for the benefit of the holders of the trust preferred securities. The guarantee
trustee will have the right to enforce the guarantee on behalf of those holders.
In most cases, the holders of a majority in liquidation amount of the trust
preferred securities issued by the applicable trust will have the right to
direct the time, method and place of:
o conducting any proceeding for any remedy available to the
applicable guarantee trustee; or
o exercising any trust or other power conferred upon that
guarantee trustee under the applicable guarantee.
Each guarantee will constitute a guarantee of payment and not merely of
collection. This means that the guarantee trustee may institute a legal
proceeding directly against Lennox to enforce the payment rights under the
guarantee without first instituting a legal proceeding against any other person
or entity.
If the guarantee trustee fails to enforce the guarantee or Lennox fails
to make a guarantee payment, a holder of trust preferred securities may
institute a legal proceeding directly against Lennox to enforce that holder's
rights under that guarantee without first instituting a legal proceeding against
the applicable trust, the guarantee trustee or any other person or entity.
PERIODIC REPORTS UNDER GUARANTEE
Lennox will be required to provide annually to the guarantee trustee a
statement as to its performance of its obligations and its compliance with all
conditions under the guarantees.
DUTIES OF GUARANTEE TRUSTEE
The guarantee trustee normally will perform only those duties
specifically set forth in the applicable guarantee. The guarantee does not
contain any implied covenants. If a default occurs on a guarantee, the guarantee
trustee will be required to use the same degree of care and skill in exercise of
its powers under the guarantee as a prudent person would exercise or use under
the circumstances in the conduct of that person's own affairs. The guarantee
trustee will exercise any of its rights or powers under the guarantee at the
request or direction of holders of the applicable series of trust preferred
securities only if it is offered security and indemnity satisfactory to it.
GOVERNING LAW
New York law will govern the guarantees.
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, DEBT SECURITIES AND TRUST
PREFERRED SECURITIES GUARANTEE
When taken together, the terms of the trust preferred securities of a
Lennox trust, the debt securities held by that trust and the related preferred
securities guarantee provide a full and unconditional guarantee by Lennox of the
payments due on the trust preferred securities. The following summary briefly
explains the interrelationship between the trust preferred securities, the debt
securities and the guarantee.
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THE TRUST WILL BE ABLE TO MAKE PAYMENTS ON THE TRUST PREFERRED SECURITIES ONLY
IF LENNOX MAKES PAYMENTS ON THE DEBT SECURITIES.
As long as Lennox makes interest and other payments when due on the
debt securities, the trust will have sufficient funds to make distribution and
other payments when due on the trust preferred securities for the following
reasons:
o the trust will hold debt securities in an aggregate principal
amount equal to the sum of the aggregate stated liquidation
amount of the trust preferred securities and the common
securities of the trust;
o the interest rate and payment dates of the debt securities
will match the distribution rate and payment dates of the
trust preferred securities and the common securities of the
trust;
o the trustees may not cause or permit the trust to engage in
any activity that is not consistent with its limited purposes
of:
o issuing and selling the trust preferred securities
and the common securities of the trust;
o investing the proceeds from the sale of those
securities in a specific series of Lennox' debt
securities; and
o engaging in only such other activities as are
necessary or incidental to issuing its securities and
purchasing and holding Lennox' debt securities and as
are otherwise specifically authorized in the
declaration of trust; and
o Lennox has agreed to pay for all of the trust's debts and
obligations, other than with respect to the trust preferred
and trust common securities, and costs and expenses, including
the fees and expenses of the trustees.
LENNOX WILL GUARANTEE THAT PAYMENTS WILL BE MADE ON THE TRUST PREFERRED
SECURITIES IF LENNOX MAKES PAYMENTS ON THE DEBT SECURITIES.
If Lennox makes interest or other payments on the debt securities, the
property trustee will be obligated to make corresponding distribution or other
payments on the trust preferred securities. Lennox will guarantee such payments
if the trust fails to make them. The guarantee only covers distributions and
other payments on the trust preferred securities if and to the extent Lennox has
made corresponding payments on the debt securities. The guarantee trustee will
have the right to enforce the guarantee on behalf of the holders of the trust
preferred securities if Lennox fails to make any required guarantee payments. If
the guarantee trustee fails to enforce the guarantee, you may institute a legal
proceeding directly against Lennox to enforce the guarantee trustee's rights
under the guarantee. If Lennox fails to make a guarantee payment, you may also
institute a legal proceeding directly against Lennox to enforce the guarantee.
THE PROPERTY TRUSTEE MAY INSTITUTE LEGAL PROCEEDINGS AGAINST LENNOX IF LENNOX
FAILS TO MAKE PAYMENTS ON THE DEBT SECURITIES.
If Lennox does not make interest or other payments on the debt
securities, the trust will not have funds available to make the corresponding
distribution or other payments on the trust preferred securities. The property
trustee, as the holder of the debt securities, will have the right to enforce
Lennox' obligations on the debt securities if an event of default under the debt
securities occurs. In addition, the holders of a majority in liquidation amount
of the trust preferred securities will have the right to direct the property
trustee with respect to certain matters under the declaration of trust. If the
property trustee fails to enforce its rights, any holder of trust preferred
securities may, to the fullest extent permitted by law and after a period of 30
days has elapsed from such holder's written request to the property trustee to
enforce such rights, institute a legal proceeding against Lennox to enforce such
rights.
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
John W. Norris, Jr., our Chairman of the Board, David H. Anderson,
Thomas W. Booth, Stephen R. Booth, David V. Brown and John W. Norris III, each
one of our directors, as well as other 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 Investments,
L.L.C. owns 70% of AOC Development II, L.L.C., which owns substantially all of
One Lake Park, L.L.C. We are leasing part of an office building owned by One
Lake Park, L.L.C. for use as our corporate headquarters. The lease has a term of
25 years and the lease payments for 2001, 2000 and 1999 totaled approximately
$2.7 million, $2.7 million and $1.1 million, respectively. We also lease a
portion of Lennox Center, a retail complex owned by AOC Development, L.L.C., for
use as offices. The Lennox Center lease has a term of three years and the lease
payments for 2001 and 2000 totaled approximately $122,580 and $119,200,
respectively. AOC Land Investment, L.L.C., also owns 70% of AOC Development,
L.L.C. We believe that the terms of our lease with One Lake Park, L.L.C. and AOC
Development, L.L.C. are at least as favorable as could be obtained from
unaffiliated third parties.
From time to time we have entered into stock disposition agreements,
which allowed our executive officers, directors, and stockholders to borrow
money from third-parties and use our capital stock held by them as collateral.
The stock disposition agreements provide that in the event of a default on the
underlying loan, we will 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 ourselves. There was never a default under any of
these agreements. As of March 1, 2002 and March 15, 2001, there was one stock
disposition agreement in existence, entered into in 1997, covering approximately
250,000 shares of our common stock. As of March 1, 2000, there were stock
disposition agreements in existence covering 1,809,120 shares of our common
stock. As of December 31, 2002, all stock disposition agreements were
terminated. Lennox 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 us than might have been obtained from unaffiliated third parties.
We do not intend to enter into any future transaction in which our 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 our board of directors and are on terms that are no
less favorable to us than those that we could obtain from unaffiliated third
parties.
PLAN OF DISTRIBUTION
We may sell the offered securities in and outside the United States (1)
through underwriters or dealers, (2) directly to purchasers, including our
affiliates, (3) through agents or (4) through a combination of any of these
methods. The prospectus supplement will include the following information:
o the terms of the offering;
o the names of any underwriters or agents;
o the name or names of any managing underwriter or underwriters;
o the purchase price of the securities from us;
o the net proceeds to us from the sale of the securities;
o any delayed delivery arrangements;
o any underwriting discounts, commissions and other items
constituting underwriters' compensation;
o any initial public offering price;
o any discounts or concessions allowed or reallowed or paid to
dealers; and
35
o any commissions paid to agents.
SALE THROUGH UNDERWRITERS OR DEALERS
If we use underwriters in the sale, the underwriters will acquire the
securities for their own account. The underwriters may resell the securities
from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. Underwriters may offer securities to the public either
through underwriting syndicates represented by one or more managing underwriters
or directly by one or more firms acting as underwriters. Unless we inform you
otherwise in the prospectus supplement, the obligations of the underwriters to
purchase the securities will be subject to certain conditions, and the
underwriters will be obligated to purchase all the offered securities if they
purchase any of them. The underwriters may change from time to time any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers.
During and after an offering through underwriters, the underwriters may
purchase and sell the securities in the open market. These transactions may
include overallotment and stabilizing transactions and purchases to cover
syndicate short positions created in connection with the offering. The
underwriters may also impose a penalty bid, which means that selling concessions
allowed to syndicate members or other broker-dealers for the offered securities
sold for their account may be reclaimed by the syndicate if the offered
securities are repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or otherwise affect the
market price of the offered securities, which may be higher than the price that
might otherwise prevail in the open market. If commenced, the underwriters may
discontinue these activities at any time.
If we use dealers in the sale of securities, we will sell the
securities to them as principals. They may then resell those securities to the
public at varying prices determined by the dealers at the time of resale. The
dealers participating in any sale of the securities may be deemed to be
underwriters within the meaning of the Securities Act of 1933 with respect to
any sale of those securities. We will include in the prospectus supplement the
names of the dealers and the terms of the transaction.
DIRECT SALES AND SALES THROUGH AGENTS
We may sell the securities directly. In this case, no underwriters or
agents would be involved. We may also sell the securities through agents we
designate from time to time. In the prospectus supplement, we will name any
agent involved in the offer or sale of the offered securities, and we will
describe any commissions payable by us to the agent. Unless we inform you
otherwise in the prospectus supplement, any agent will agree to use its
reasonable best efforts to solicit purchases for the period of its appointment.
We may sell the securities directly to institutional investors or
others who may be deemed to be underwriters within the meaning of the Securities
Act of 1933 with respect to any sale of those securities. We will describe the
terms of any such sales in the prospectus supplement.
DELAYED DELIVERY CONTRACTS
If we so indicate in the prospectus supplement, we may authorize
agents, underwriters or dealers to solicit offers from certain types of
institutions to purchase securities from us at the public offering price under
delayed delivery contracts. These contracts would provide for payment and
delivery on a specified date in the future. The contracts would be subject only
to those conditions described in the prospectus supplement. The prospectus
supplement will describe the commission payable for solicitation of those
contracts.
GENERAL INFORMATION
We may have agreements with the agents, dealers and underwriters to
indemnify them against certain civil liabilities, including liabilities under
the Securities Act of 1933, or to contribute with respect to payments that the
agents, dealers or underwriters may be required to make. Agents, dealers and
underwriters may be customers of, engage in transactions with or perform
services for us in the ordinary course of their businesses.
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LEGAL OPINIONS
The validity of the securities will be passed upon for us by Baker
Botts L.L.P., Dallas, Texas and for the Lennox trusts by Richards, Layton &
Finger, P.A., Wilmington, Delaware.
EXPERTS
The financial statements and schedules incorporated by reference in
this prospectus and elsewhere in the registration statement to the extent and
for the periods indicated in their reports have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports. Arthur Andersen LLP has not consented to the
inclusion of their report in this prospectus, and we have dispensed with the
requirement to file their consent in reliance upon Rule 437a of the Securities
Act of 1933. Because Arthur Andersen LLP has not consented to the inclusion of
their report in this prospectus, you will not be able to recover against Arthur
Andersen LLP under Section 11 of the Securities Act for any untrue statements of
a material fact contained in the financial statements audited by Arthur Andersen
LLP or any omissions to state a material fact required to be stated therein.
WHERE YOU CAN FIND MORE INFORMATION
We file reports and other information with the SEC. You may read and
copy any document we file with the SEC at the SEC's public reference room
located at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
further information regarding the operation of the SEC's Public Reference Room
by calling the SEC at 1-800-SEC-0330. Our filings are also available to the
public on the SEC's Internet site located at http://www.sec.gov.
This prospectus is part of a registration statement we have filed with
the SEC relating to the securities we may offer. As permitted by SEC rules, this
prospectus does not contain all of the information we have included in the
registration statement and the accompanying exhibits and schedules we file with
the SEC. You may refer to the registration statement, the exhibits and schedules
for more information about us and our securities. The registration statement,
exhibits and schedules are available at the SEC's public reference room or
through its web site.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference:
o our Annual Report on Form 10-K for the fiscal year ended
December 31, 2001;
o our Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 2002, June 30, 2002 and September 30, 2002;
o our Current Reports on Form 8-K dated April 29, 2002, May 2,
2002, May 20, 2002, August 14, 2002, September 3, 2002 and
October 22, 2002; and
o the description of our common stock contained in our Form 8-A
dated July 12, 1999;
We also incorporate by reference all of our future filings made with
the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 until we sell all of the securities.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address and telephone number:
37
Investor Relations
Lennox International Inc.
2140 Lake Park Boulevard
Richardson, Texas 75080
(972) 497-5000
You should rely only on the information incorporated by reference or provided in
this prospectus or any prospectus supplement. We have not authorized anyone else
to provide you with different information. We are not making an offer of these
securities in any state where the offer is not permitted.
38
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth expenses payable by Lennox in connection
with the issuance and distribution of the securities being registered. All the
amounts shown are estimates, except for the SEC registration fee.
SEC registration fee.............................................. $ 23,000
Trustee's fees and expenses (including legal fees)................ 50,000
Accounting fees and expenses...................................... 25,000
Legal fees and expenses........................................... 75,000
Printing expenses................................................. 10,000
Rating Agency fees................................................ 50,000
Miscellaneous..................................................... 17,000
--------
Total.............................................. $250,000
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
LENNOX INTERNATIONAL INC.
Set forth below is a description of certain provisions of the Restated
Certificate of Incorporation (the "Certificate") of Lennox International Inc.
(the "Company"), the Amended and Restated Bylaws (the "Bylaws") of the Company,
Indemnification Agreements (the "Indemnification Agreements") the Company has
entered into with its directors and certain of its officers (the "Indemnitees")
and the Delaware General Corporation Law (the "DGCL"). This description is
intended as a summary only and is qualified in its entirety by reference to the
Certificate, the Bylaws, the Indemnification Agreements and the DGCL.
Delaware General Corporation Law
Section 145 of the DGCL provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that the person is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership or other enterprise, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by them in connection with such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interest of the corporation and,
with respect to any criminal action or proceeding, if he or she had no
reasonable cause to believe their conduct was unlawful. Section 145 further
provides that a corporation similarly may indemnify any such person serving in
any such capacity who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor, against expenses (including
attorneys' fees) actually and reasonably incurred in connection with the defense
or settlement of the action or suit if he or she acted in good faith and in a
manner he or she reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification may be made against
expenses in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation, unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
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The Certificate
Article Eighth of the Certificate provides that a director of the
Company shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except to the extent such
exemption from liability or limitation thereof is not permitted under the DGCL
as the same exists or may hereafter be amended. Any repeal or modification of
Article Eighth shall not adversely affect any right or protection of a director
of the Company existing thereunder with respect to any act or omission occurring
prior to such repeal or modification.
The Bylaws
Article VI of the Bylaws provides that each person who at any time
shall serve or shall have served as a director or officer of the Company, or any
person who, while a director or officer of the Company, is or was serving at the
request of the Company as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, shall be entitled to (a)
indemnification and (b) the advancement of expenses incurred by such person from
the Company as, and to the fullest extent, permitted by Section 145 of the DGCL
or any successor statutory provision, as from time to time amended. The Company
may indemnify any other person, to the same extent and subject to the same
limitations specified in the immediately preceding sentence, by reason of the
fact that such other person is or was an employee or agent of the Company or
another corporation, partnership, joint venture, trust or other enterprise.
The indemnification and advancement of expenses provided by, or granted
pursuant to, Article VI shall not be deemed exclusive of any other rights to
which any person seeking indemnification or advancement of expenses may be
entitled under any bylaw of the Company, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in such person's
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under Article VI shall be deemed to be
provided by a contract between the Company and the director, officer, employee
or agent who served in such capacity at any time while the bylaws of the Company
and other relevant provisions of the DGCL and other applicable law, if any, are
in effect. Any repeal or modification thereof shall not affect any rights or
obligations then existing. Without limiting the provisions of Article VI, the
Company is authorized from time to time, without further action by the
stockholders of the Company, to enter into agreements with any director or
officer of the Company providing such rights of indemnification as the Company
may deem appropriate, up to the maximum extent permitted by law. Any agreement
entered into by the Company with a director may be authorized by the other
directors, and such authorization shall not be invalid on the basis that similar
agreements may have been or may thereafter be entered into with other directors.
Insurance
The Company may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the Company, or is or
was serving at the request of the Company as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against any liability asserted against such person and incurred by
such person in any such capacity, or arising out of such person's status as
such, whether or not the Company would have the power to indemnify such person
against such liability under the applicable provisions of Article VI of the
Bylaws or the DGCL.
Indemnification Agreements
The Company has entered into indemnification agreements (the
"Indemnification Agreements") with its directors and certain of its executive
officers (collectively, the "Indemnitees"). Under the terms of the
Indemnification Agreements, the Company 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 thereafter permit. In addition, the Indemnification
Agreements contain specific provisions pursuant to which the Company has agreed
to indemnify each Indemnitee (i) if such person is, by reason of his or her
status as a director, nominee for director, officer, agent or fiduciary of the
Company or of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise with which such person was serving at the
request of the Company (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,
II-2
investigation or other proceeding (each, a "Proceeding"), other than a
proceeding by or in the right of the Company; (ii) 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 the Company 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 the Company if applicable law prohibits such
indemnification, unless and only to the extent that a court shall otherwise
determine; (iii) 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; (iv) 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 (v)
against expenses actually and reasonably incurred by such person in any judicial
adjudication of or any award in arbitration to enforce his or her rights under
the Indemnification Agreements.
In addition, under the terms of the Indemnification Agreements, the
Company 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 the Company or otherwise, in advance of any determination with respect to
entitlement to indemnification and within 15 days after the receipt by the
Company 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 the Company 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 the Company 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 thereunder. In some cases, the nature
of the procedures specified in the Indemnification Agreements varies depending
on whether there has occurred a "Change in Control" (as defined in the
Indemnification Agreements) of the Company.
LENNOX TRUSTS
Prior to the issuance of trust preferred securities by a Lennox trust,
the existing declaration of trust pursuant to which such trust is created will
be amended and restated to provide that no trustee, or affiliate of any trustee,
or officer, director, shareholder, member, partner, employee, representative or
agent of any trustee, or employee or agent of such trust or of any of its
affiliates (each, an "Indemnified Person") will be liable for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of such trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by such amended and restated declaration of
trust or by law, except that an Indemnified Person shall be liable for any such
loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the property trustee of such trust, negligence)
or willful misconduct with respect to such acts or omissions.
In addition, such amended and restated declaration of trust shall
provide that, to the fullest extent permitted by applicable law, Lennox shall
indemnify and hold harmless each Indemnified Person from and against any loss,
liability, expense, damage or claim incurred by such Indemnified Person arising
out of or in connection with the acceptance or administration of the trust under
such declaration of trust or by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of such trust and in
a manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by such declaration of trust,
except that no Indemnified Person shall be entitled to be indemnified in respect
of any loss, liability, expense, damage or claim incurred by such Indemnified
Person by reason of gross negligence (or, in the case of the property trustee of
the trust, negligence) or willful misconduct with respect to such acts or
omissions.
II-3
ITEM 16. EXHIBITS*
4.1 Restated Certificate of Incorporation of Lennox
International Inc.) (incorporated by reference to Exhibit
3.1 to the Registration Statement of Lennox International
Inc. on Form S-1 (Registration No. 333-75725)).
4.2 Amended and Restated Bylaws of Lennox International Inc.
(incorporated by Reference to Exhibit 3.2 to the
Registration Statement of Lennox International Inc. on Form
S-1 (Registration No. 333-75725)).
4.3 Specimen Stock Certificate for the Common Stock, par value
$.01 per share, of Lennox International Inc. (incorporated
by reference to Exhibit 4.1 to the Registration Statement on
Form S-1 of Lennox International Inc. (Registration No.
333-75725)).
4.4 Rights Agreement dated as of July 27, 2000 between Lennox
International Inc. and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, which includes as Exhibit A the
form of Certificate of Designations of Series A Junior
Participating Preferred Stock setting forth the terms of the
Preferred Stock, as Exhibit B the form of Rights Certificate
and as Exhibit C the Summary of Rights to Purchase Preferred
Stock (incorporated by reference to Exhibit 4.1 to the
Current Report of Lennox International Inc. on Form 8-K
dated July 27, 2000).
4.5 Form of Indenture between Lennox International Inc. and The
Bank of New York, as trustee, in respect of senior debt
securities of Lennox International Inc. (the "Senior
Indenture").
4.6 Form of Indenture between Lennox International Inc. and The
Bank of New York, as trustee, in respect of subordinated
debt securities of Lennox International Inc. (the
"Subordinated Indenture").
4.7 Declaration of Trust of Lennox Trust I.
4.8 Declaration of Trust of Lennox Trust II.
4.9 Form of Amended and Restated Declaration of Trust.
4.10 Certificate of Trust of Lennox Trust I.
4.11 Certificate of Trust of Lennox Trust II.
4.12 Form of Trust Preferred Security (included in Exhibit 4.9).
4.13 Form of Trust Preferred Securities Guarantee Agreement of
Lennox International Inc.
5.1 Opinion of Baker Botts L.L.P. with respect to legality of
the securities offered hereby (other than the trust
preferred securities of Lennox Trust I and Lennox Trust II)
5.2 Opinion of Richards, Layton & Finger, P.A. with respect to
the legality of the trust preferred securities of Lennox
Trust I.
5.3 Opinion of Richards, Layton & Finger, P.A. with respect to
the legality of the trust preferred securities of Lennox
Trust II.
----------
* Lennox will file as an exhibit to a Current Report on Form 8-K (i) any
underwriting agreement, including any remarketing agreement, relating
to securities offered hereby, (ii) the instruments setting forth the
terms of any debt securities, preferred stock, warrants, stock purchase
contracts or stock purchase units and (iii) any required opinion of
counsel to Lennox as to certain tax matters relative to securities
offered hereby.
II-4
12.1 Computation of Ratio of Earnings to Fixed Charges of Lennox
International Inc.
23.1 Consent of Baker Botts L.L.P. (included in Exhibit 5.1).
23.2 Consent of Richards, Layton & Finger, P.A. (included in
Exhibits 5.2 and 5.3).
23.3 Consent of Arthur Andersen LLP (omitted pursuant to Rule
437a).
24.1 Power of attorney of certain signatories (included on the
signature pages of this Registration Statement).
25.1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as trustee under the Senior Indenture.
25.2 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as trustee under the Subordinated Indenture.
25.3 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as property trustee, relating to Lennox Trust I.
25.4 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as property trustee, relating to Lennox Trust II.
25.5 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as guarantee trustee, relating to Lennox Trust I.
25.6 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as guarantee trustee, relating to Lennox Trust II.
ITEM 17. UNDERTAKINGS
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registrant statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) of the Securities Act of 1933 if, in the aggregate, the
changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form
S-8 and the information required to be included in a
post-effective
II-5
amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the foregoing provisions, or otherwise,
the registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by a registrant
of expenses incurred or paid by a director, officer or controlling person of
such registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, such registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act of 1933 shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Lennox
International Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richardson, State of Texas, on January 31, 2003.
LENNOX INTERNATIONAL INC.
By: /s/ Richard A. Smith
------------------------------------------
Richard A. Smith
Executive Vice President, Chief Financial
Officer and Treasurer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and officers of Lennox International Inc., a Delaware corporation, which is
filing a Registration Statement on Form S-3 with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933, as amended (the
"Securities Act"), hereby constitutes and appoints Carl E. Edwards, Jr. and
Richard A. Smith, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, and in any and all capacities, to sign
and file (i) any and all amendments (including post-effective amendments) to
this Registration Statement, with all exhibits thereto, and other documents in
connection therewith, and (ii) a registration statement, and any and all
amendments thereto, relating to the offering covered hereby filed pursuant to
Rule 462(b) under the Securities Act, with the Securities and Exchange
Commission, it being understood that said attorneys-in-fact and agents, and each
of them, shall have full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person and
that each of the undersigned hereby ratifies and confirms all that said
attorneys-in-fact as agents or any of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert E. Schjerven Chief Executive Officer and January 31, 2003
------------------------------------- Director (Principal Executive
Robert E. Schjerven Officer)
/s/ Richard A. Smith Executive Vice President, Chief January 31, 2003
------------------------------------- Financial Officer and Treasurer
Richard A. Smith (Principal Financial Officer)
/s/ David L. Inman Vice President, Controller and January 31, 2003
------------------------------------- Chief Accounting Officer
David L. Inman (Principal Accounting Officer)
/s/ John W. Norris, Jr. Chairman of the Board and Director January 31, 2003
-------------------------------------
John W. Norris, Jr.
/s/ Linda G. Alvarado Director January 31, 2003
-------------------------------------
Linda G. Alvarado
II-7
SIGNATURE TITLE DATE
--------- ----- ----
Director
-------------------------------------
David H. Anderson
/s/ Stephen R. Booth Director January 31, 2003
-------------------------------------
Stephen R. Booth
/s/ Thomas W. Booth Director January 31, 2003
-------------------------------------
Thomas W. Booth
/s/ David V. Brown Director January 31, 2003
-------------------------------------
David V. Brown
/s/ James J. Byrne Director January 31, 2003
-------------------------------------
James J. Byrne
Director
-------------------------------------
Janet K. Cooper
/s/ C.L. (Jerry) Henry Director January 31, 2003
-------------------------------------
C.L. (Jerry) Henry
/s/ John E. Major Director January 31, 2003
-------------------------------------
John E. Major
/s/ John W. Norris III Director January 31, 2003
-------------------------------------
John W. Norris III
Director
-------------------------------------
William G. Roth
/s/ Terry D. Stinson Director January 31, 2003
-------------------------------------
Terry D. Stinson
/s/ Richard L. Thompson Director January 31, 2003
-------------------------------------
Richard L. Thompson
II-8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Lennox
Industries Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richardson, State of Texas, on January 31, 2003.
LENNOX INDUSTRIES INC.
By: /s/ Richard A. Smith
--------------------------------------
Richard A. Smith
Executive Vice President - Finance and
Treasurer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and officers of Lennox Industries Inc., an Iowa corporation, which is filing a
Registration Statement on Form S-3 with the Securities and Exchange Commission
under the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), hereby constitutes and appoints Carl E. Edwards, Jr. and Richard A.
Smith, and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, and in any and all capacities, to sign and
file (i) any and all amendments (including post-effective amendments) to this
Registration Statement, with all exhibits thereto, and other documents in
connection therewith, and (ii) a registration statement, and any and all
amendments thereto, relating to the offering covered hereby filed pursuant to
Rule 462(b) under the Securities Act, with the Securities and Exchange
Commission, it being understood that said attorneys-in-fact and agents, and each
of them, shall have full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person and
that each of the undersigned hereby ratifies and confirms all that said
attorneys-in-fact as agents or any of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert E. Schjerven Chairman of the Board and Chief January 31, 2003
------------------------------------- Executive Officer (Principal
Robert E. Schjerven Executive Officer)
/s/ Richard A. Smith Executive Vice President - January 31, 2003
------------------------------------- Finance and Treasurer and
Richard A. Smith Director (Principal Financial and
Accounting Officer)
/s/ Scott J. Boxer Director January 31, 2003
-------------------------------------
Scott J. Boxer
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Armstrong
Air Conditioning Inc. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richardson, State of Texas, on January 31, 2003.
ARMSTRONG AIR CONDITIONING INC.
By: /s/ Richard A. Smith
----------------------------------------
Richard A. Smith
Executive Vice President - Finance and
Treasurer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and officers of Armstrong Air Conditioning Inc., an Ohio corporation, which is
filing a Registration Statement on Form S-3 with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933, as amended (the
"Securities Act"), hereby constitutes and appoints Carl E. Edwards, Jr. and
Richard A. Smith, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, and in any and all capacities, to sign
and file (i) any and all amendments (including post-effective amendments) to
this Registration Statement, with all exhibits thereto, and other documents in
connection therewith, and (ii) a registration statement, and any and all
amendments thereto, relating to the offering covered hereby filed pursuant to
Rule 462(b) under the Securities Act, with the Securities and Exchange
Commission, it being understood that said attorneys-in-fact and agents, and each
of them, shall have full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person and
that each of the undersigned hereby ratifies and confirms all that said
attorneys-in-fact as agents or any of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert E. Schjerven Chairman of the Board and Chief January 31, 2003
------------------------------------- Executive Officer (Principal
Robert E. Schjerven Executive Officer)
/s/ Richard A. Smith Executive Vice President - January 31, 2003
------------------------------------- Finance and Treasurer and
Richard A. Smith Director (Principal Financial and
Accounting Officer)
/s/ Michael G. Schwartz Director January 31, 2003
-------------------------------------
Michael G. Schwartz
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Excel
Comfort Systems Inc. certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richardson, State of Texas, on January 31, 2003.
EXCEL COMFORT SYSTEMS INC.
By: /s/ Richard A. Smith
----------------------------------------
Richard A. Smith
Executive Vice President - Finance and
Treasurer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and officers of Excel Comfort Systems Inc., a Delaware corporation, which is
filing a Registration Statement on Form S-3 with the Securities and Exchange
Commission under the provisions of the Securities Act of 1933, as amended (the
"Securities Act"), hereby constitutes and appoints Carl E. Edwards, Jr. and
Richard A. Smith, and each of them, his or her true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution, for him or her
and in his or her name, place and stead, and in any and all capacities, to sign
and file (i) any and all amendments (including post-effective amendments) to
this Registration Statement, with all exhibits thereto, and other documents in
connection therewith, and (ii) a registration statement, and any and all
amendments thereto, relating to the offering covered hereby filed pursuant to
Rule 462(b) under the Securities Act, with the Securities and Exchange
Commission, it being understood that said attorneys-in-fact and agents, and each
of them, shall have full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person and
that each of the undersigned hereby ratifies and confirms all that said
attorneys-in-fact as agents or any of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert E. Schjerven Chairman of the Board and Chief January 31, 2003
------------------------------------- Executive Officer (Principal
Robert E. Schjerven Executive Officer)
/s/ Richard A. Smith Executive Vice President - January 31, 2003
------------------------------------- Finance and Treasurer and
Richard A. Smith Director (Principal Financial and
Accounting Officer)
/s/ Michael G. Schwartz Director January 31, 2003
-------------------------------------
Michael G. Schwartz
II-11
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Service
Experts Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richardson, State of Texas, on January 31, 2003.
SERVICE EXPERTS INC.
By: /s/ Richard A. Smith
------------------------------------
Richard A. Smith
Executive Vice President - Finance
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and officers of Service Experts Inc., a Delaware corporation, which is filing a
Registration Statement on Form S-3 with the Securities and Exchange Commission
under the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), hereby constitutes and appoints Carl E. Edwards, Jr. and Richard A.
Smith, and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, and in any and all capacities, to sign and
file (i) any and all amendments (including post-effective amendments) to this
Registration Statement, with all exhibits thereto, and other documents in
connection therewith, and (ii) a registration statement, and any and all
amendments thereto, relating to the offering covered hereby filed pursuant to
Rule 462(b) under the Securities Act, with the Securities and Exchange
Commission, it being understood that said attorneys-in-fact and agents, and each
of them, shall have full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person and
that each of the undersigned hereby ratifies and confirms all that said
attorneys-in-fact as agents or any of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Dennis H. Smith President and Chief Executive January 31, 2003
------------------------------------- Officer and Director (Principal
Dennis H. Smith Executive Officer)
/s/ Richard A. Smith Executive Vice President - January 31, 2003
------------------------------------- Finance and Director (Principal
Richard A. Smith Financial and Accounting Officer)
/s/ Carl E. Edwards, Jr. Director January 31, 2003
-------------------------------------
Carl E. Edwards, Jr.
II-12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Lennox
Global Ltd. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Richardson, State of Texas, on January 31, 2003.
LENNOX GLOBAL LTD.
By: /s/ Richard A. Smith
--------------------------------------
Richard A. Smith
Executive Vice President - Finance and
Treasurer
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and officers of Lennox Global Ltd., a Delaware corporation, which is filing a
Registration Statement on Form S-3 with the Securities and Exchange Commission
under the provisions of the Securities Act of 1933, as amended (the "Securities
Act"), hereby constitutes and appoints Carl E. Edwards, Jr. and Richard A.
Smith, and each of them, his or her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution, for him or her and
in his or her name, place and stead, and in any and all capacities, to sign and
file (i) any and all amendments (including post-effective amendments) to this
Registration Statement, with all exhibits thereto, and other documents in
connection therewith, and (ii) a registration statement, and any and all
amendments thereto, relating to the offering covered hereby filed pursuant to
Rule 462(b) under the Securities Act, with the Securities and Exchange
Commission, it being understood that said attorneys-in-fact and agents, and each
of them, shall have full power and authority to do and perform each and every
act and thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he or she might or could do in person and
that each of the undersigned hereby ratifies and confirms all that said
attorneys-in-fact as agents or any of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Robert E. Schjerven Chairman of the Board and Chief Executive January 31, 2003
------------------------------------- Officer (Principal Executive Officer)
Robert E. Schjerven
/s/ Richard A. Smith Executive Vice President - Finance and January 31, 2003
------------------------------------- Treasurer and Director (Principal
Richard A. Smith Financial and Accounting Officer)
/s/ Harry J. Bizios Director January 31, 2003
-------------------------------------
Harry J. Bizios
/s/ Carl E. Edwards, Jr. Director January 31, 2003
-------------------------------------
Carl E. Edwards, Jr.
/s/ Robert J. McDonough Director January 31, 2003
-------------------------------------
Robert J. McDonough
II-13
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Lennox
Trust I certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richardson, State of Texas, on January 31, 2003.
LENNOX TRUST I
By: Lennox International Inc., as Sponsor
By: /s/ Richard A. Smith
-------------------------------------
Richard A. Smith
Executive Vice President,
Chief Financial Officer and Treasurer
II-14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Lennox
Trust II certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Richardson, State of Texas, on January 31, 2003.
LENNOX TRUST II
By: Lennox International Inc., as Sponsor
By: /s/ Richard A. Smith
---------------------------------
Richard A. Smith
Executive Vice President,
Chief Financial Officer and Treasurer
II-15
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 Restated Certificate of Incorporation of Lennox
International Inc.) (incorporated by reference to Exhibit
3.1 to the Registration Statement of Lennox International
Inc. on Form S-1 (Registration No. 333-75725)).
4.2 Amended and Restated Bylaws of Lennox International Inc.
(incorporated by Reference to Exhibit 3.2 to the
Registration Statement of Lennox International Inc. on Form
S-1 (Registration No. 333-75725)).
4.3 Specimen Stock Certificate for the Common Stock, par value
$.01 per share, of Lennox International Inc. (incorporated
by reference to Exhibit 4.1 to the Registration Statement on
Form S-1 of Lennox International Inc. (Registration No.
333-75725)).
4.4 Rights Agreement dated as of July 27, 2000 between Lennox
International Inc. and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, which includes as Exhibit A the
form of Certificate of Designations of Series A Junior
Participating Preferred Stock setting forth the terms of the
Preferred Stock, as Exhibit B the form of Rights Certificate
and as Exhibit C the Summary of Rights to Purchase Preferred
Stock (incorporated by reference to Exhibit 4.1 to the
Current Report of Lennox International Inc. on Form 8-K
dated July 27, 2000).
4.5 Form of Indenture between Lennox International Inc. and The
Bank of New York, as trustee, in respect of senior debt
securities of Lennox International Inc. (the "Senior
Indenture").
4.6 Form of Indenture between Lennox International Inc. and The
Bank of New York, as trustee, in respect of subordinated
debt securities of Lennox International Inc. (the
"Subordinated Indenture").
4.7 Declaration of Trust of Lennox Trust I.
4.8 Declaration of Trust of Lennox Trust II.
4.9 Form of Amended and Restated Declaration of Trust.
4.10 Certificate of Trust of Lennox Trust I.
4.11 Certificate of Trust of Lennox Trust II.
4.12 Form of Trust Preferred Security (included in Exhibit 4.9).
4.13 Form of Trust Preferred Securities Guarantee Agreement of
Lennox International Inc.
5.1 Opinion of Baker Botts L.L.P. with respect to legality of
the securities offered hereby (other than the trust
preferred securities of Lennox Trust I and Lennox Trust II)
5.2 Opinion of Richards, Layton & Finger, P.A. with respect to
the legality of the trust preferred securities of Lennox
Trust I.
5.3 Opinion of Richards, Layton & Finger, P.A. with respect to
the legality of the trust preferred securities of Lennox
Trust II.
12.1 Computation of Ratio of Earnings to Fixed Charges of Lennox
International Inc.
23.1 Consent of Baker Botts L.L.P. (included in Exhibit 5.1).
23.2 Consent of Richards, Layton & Finger, P.A. (included in
Exhibits 5.2 and 5.3).
23.3 Consent of Arthur Andersen LLP (omitted pursuant to Rule
437a).
24.1 Power of attorney of certain signatories (included on the
signature pages of this Registration Statement).
25.1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as trustee under the Senior Indenture.
25.2 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as trustee under the Subordinated Indenture.
25.3 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as property trustee, relating to Lennox Trust I.
25.4 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as property trustee, relating to Lennox Trust II.
25.5 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as guarantee trustee, relating to Lennox Trust I.
25.6 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939, as amended, of The Bank of New York,
as guarantee trustee, relating to Lennox Trust II.