Exhibit 10.1

 

LUMBER LIQUIDATORS HOLDINGS, INC.

 

2011 EQUITY COMPENSATION PLAN

 

(As Amended & Restated March 7, 2019)

 

 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Table of Contents

 

Article I DEFINITIONS 1       1.01. Administrator 1 1.02. Agreement 1 1.03.
Award 1 1.04. Board 1 1.05. Change in Control 1 1.06. Code 2 1.07. Committee 2
1.08. Common Stock 2 1.09. Company 2 1.10. Control Change Date 2 1.11.
Corresponding SAR 2 1.12. Exchange Act 2 1.13. Fair Market Value 3 1.14.
Incentive Award 3 1.15. Incentive Stock Option 3 1.16. Initial Value 3 1.17.
Non-Employee Director 3 1.18. Non-Qualified Stock Option 3 1.19. Option 3 1.20.
Participant 4 1.21. Performance Criteria 4 1.22. Plan 5 1.23. Related Company 5
1.24. SAR 5 1.25. Stock Award 5 1.26. Stock Unit 5       Article II PURPOSES 6  
    Article III ADMINISTRATION 7       Article IV ELIGIBILITY 9       Article V
STOCK SUBJECT TO PLAN 10       5.01. Shares Issued 10 5.02. Aggregate Limit 10
5.03. Individual Annual Limits 10 5.04. Reallocation of Shares 11

 

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LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

  

Article VI OPTIONS 12       6.01. Award 12 6.02. Option Price 12 6.03. Maximum
Option Period 12 6.04. Nontransferability 12 6.05. Transferable Options 12 6.06.
Employee Status 13 6.07. Exercise 13 6.08. Payment 13 6.09. Change in Control 14
6.10. Stockholder Rights 14 6.11. Disposition of Common Stock 14       Article
VII SARS 15       7.01. Award 15 7.02. Maximum SAR Period 15 7.03.
Nontransferability 15 7.04. Transferable SARs 15 7.05. Exercise 16 7.06. Change
in Control 16 7.07. Employee Status 16 7.08. Settlement 16 7.09. Stockholder
Rights 16       Article VIII STOCK AWARDS 17       8.01. Award 17 8.02. Vesting
17 8.03. Employee Status 17 8.04. Change in Control 17 8.05. Stockholder Rights
17       Article IX incentive awards 18       9.01. Award 18 9.02. Terms and
Conditions 18 9.03. Payment 18 9.04. Nontransferability 18 9.05. Transferable
Incentive Awards 19 9.06. Employee Status 19 9.07. Change in Control 19 9.08.
Stockholder Rights 19

 

 ii 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

  

Article X STOCK UNITS 20       10.01. Award 20 10.02. Earning the Award 20
10.03. Payment 20 10.04. Nontransferability 20 10.05. Transferable Stock Units
20 10.06. Employee Status 21 10.07. Change in Control 21 10.08. Stockholder
Rights 21       Article XI ADJUSTMENT UPON CHANGE IN COMMON STOCK 22      
Article XII COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES 24      
Article XIII GENERAL PROVISIONS 25       13.01. Effect on Employment and Service
25 13.02. Unfunded Plan 25 13.03. Rules of Construction 25 13.04. Tax
Withholding 25 13.05. Section 409A 25 13.06. Tax Consequences 26 13.07. Clawback
26 13.08. Binding Effect 26       Article XIV AMENDMENT 27       Article XV
DURATION OF PLAN 28       Article XVI EFFECTIVE DATE OF PLAN 29

 

 iii 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article I
DEFINITIONS

 

1.01.Administrator

 

Administrator means the Committee and any delegate of the Committee that is
appointed in accordance with Article III. Notwithstanding the preceding
sentence, “Administrator” means the Board on any date on which there is not a
Committee.

 

1.02.Agreement

 

Agreement means a written or electronic agreement (including any amendment or
supplement thereto) between the Company and a Participant or other documentation
specifying the terms and conditions of an Award granted to such Participant.

 

1.03.Award

 

Award means a Stock Award, Stock Unit, Incentive Award, Incentive Stock Option,
Non-Qualified Stock Option or SAR, or any combination of the foregoing, granted
to a Participant.

 

1.04.Board

 

Board means the Board of Directors of the Company.

 

1.05.Change in Control

 

Change in Control means any of the following events:

 

(a)       any person, including a “group” as defined below, acquires ownership
of the Common Stock that, together with the Common Stock already held by such
person or group, represents more than 50% of the total fair market value or
total voting power of the then outstanding Common Stock;

 

(b)        any person, including a “group” as defined below, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) ownership of Common Stock possessing 30%
or more of the total voting power of the Common Stock;

 

(c)        a majority of members of the Board is replaced during a twelve-month
period by directors whose appointment or election is not endorsed by a majority
of the members of the Board prior to such appointment or election; or

 

(d)        any person, including a “group” as defined below, acquires (or has
acquired during the 12-month period ending on the date of the most recent
acquisition by such person or persons) assets from the Company having a total
gross fair market value of 40% or more of the total gross fair market value of
all of the assets of the Company immediately prior to such acquisition or
acquisitions.

 

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LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

The term “group” shall have the same meaning as in Section 13(d)(3) of the
Securities Act of 1933, modified as may be necessary to comply with the
requirements of Treasury Regulations Section 1.409A-3(i)(5)(v). This definition
of “Change of Control” is intended to satisfy the requirements of Treasury
Regulations Section 1.409A-3(i)(5), the terms of which are incorporated herein
by reference.

 

1.06.Code

 

Code means the Internal Revenue Code of 1986, and any amendments thereto.

 

1.07.Committee

 

Committee means the Compensation Committee of the Board.

 

1.08.Common Stock

 

Common Stock means the common stock, par value $0.001, of the Company.

 

1.09.Company

 

Company means Lumber Liquidators Holdings, Inc.

 

1.10.Control Change Date

 

Control Change Date means the date on which a Change in Control occurs. If a
Change in Control occurs as a result of a series of transactions, the Control
Change Date is the date of the last of such transactions.

 

1.11.Corresponding SAR

 

Corresponding SAR means an SAR that is granted in relation to a particular
Option and that can be exercised only upon the surrender to the Company,
unexercised, of that portion of the Option to which the SAR relates.

 

1.12.Exchange Act

 

Exchange Act means the Securities Exchange Act of 1934, as amended from time to
time.

 

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LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

1.13.Fair Market Value

 

Fair Market Value means, on any given date, the reported “closing” price of a
share of Common Stock on the New York Stock Exchange on such date or, if the
Common Stock was not so traded on such date, the reported “closing” price of a
shares of Common Stock on the immediately preceding day on which the Common
Stock was so traded.

 

1.14.Incentive Award

 

Incentive Award means a cash-denominated Award which, subject to the terms and
conditions as may be prescribed by the Administrator, entitles the Participant
to receive a payment, in cash or Common Stock, or a combination of cash and
Common Stock from the Company.

 

1.15.Incentive Stock Option

 

Incentive Stock Option means an Option intended to qualify as an “incentive
stock option” under Section 422 of the Code and related Treasury Regulations and
guidance.

 

1.16.Initial Value

 

Initial Value means, with respect to a Corresponding SAR, the option price per
share of the related Option and, with respect to an SAR granted independently of
an Option, the price per share of Common Stock as determined by the
Administrator on the date of the grant; provided, however, that the price per
share of Common Stock encompassed by the grant of an SAR shall not be less than
Fair Market Value on the date of grant. Except for an adjustment authorized
under Article XII, the Initial Value may not be reduced (by amendment or
cancellation of the sale or otherwise) after the date of grant.

 

1.17.Non-Employee Director

 

Non-Employee Director means a member of the Board or the board of directors of a
Related Company who is not also an employee of the Company or a Related Company.

 

1.18.Non-Qualified Stock Option

 

An Option that is not, or is not intended to be, an Incentive Stock Option.

 

1.19.Option

 

Option means a stock option that entitles the holder to purchase from the
Company a stated number of shares of Common Stock at the price set forth in an
Agreement and includes both an Incentive Stock Option and a Non-Qualified Stock
Option.

 

 3 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

1.20.Participant

 

Participant means an employee of the Company or a Related Company (including an
entity that becomes a Related Company after the adoption of this Plan), a member
of the Board or the board of directors of a Related Company or any consultant,
advisor, or other key person to the Company or a Related Company (including a
prospective employee, Board member, director, consultant, advisor, or key
person) who satisfies the requirements of Article IV and is selected by the
Administrator to receive an Award.

 

1.21.Performance Criteria

 

For purposes of this Plan, “Performance Criteria” shall mean performance targets
based on one or more business criteria, including without limitation one or more
of the following criteria: (a) earnings (including operating income, earnings
before or after taxes, earnings before or after interest, depreciation,
amortization (EBITDA), or extraordinary or non-recurring items) or book value
per share (which may exclude nonrecurring items) or net earnings; (b) pre-tax
income, net income, net operating income, or after-tax income; (c) earnings per
share (basic or diluted); (d) sales (net or gross), sales growth or rate of
sales growth; (e) operating profit or gross profit; (f) revenue, revenue growth
or rate of revenue growth; (g) operating margin, gross margin, cash margin, or
adjusted pre-tax margin; (h) return on assets (gross or net), return on
investment (including cash flow return on investment), return on capital
(including return on total capital or return on invested capital), return on
sales, or return on equity; (i) returns on sales or revenues; (j) financial
ratios (including those measuring liquidity, activity, profitability or
leverage); (k) reduction of losses, loss ratios or expense ratios; (l) expense
or cost levels; (m) reduction in fixed costs; (n) operating costs and expenses;
(o) cost of capital or assets under management; (p) value of assets; (q)
financing and other capital raising transactions; (r) stock price performance;
(s) cash levels, cash flow (before or after dividends), free cash flow, cash
flow return on investment (discounted or otherwise), net cash provided by
operations, cash flow in excess of cost of capital or cash flow per share
(before or after dividends); (t) dividends; (u) implementation or completion of
critical projects or processes; (v) economic value added or created; (w) working
capital; (x) stock price or total stockholder return; (y) cost targets,
reductions and savings, productivity and efficiencies; (z) debt reduction, debt
leverage (debt to capital) or net debt to EBITDA; (aa) selling, general and
administrative expenses; (bb) stockholders’ equity; (cc) comparable store sales;
(dd) performance of non-comparable stores; (ee) sales per store; (ff) store
openings; (gg) aggregate product price and other product measures; (hh)
merchandise inventory levels (including per store); (ii) inventory shrinkage;
(jj) average sales ticket; (kk) inventory turnover; (ll) advertising
efficiencies and returns (including advertising expense to sales percentage);
(mm) customer traffic, satisfaction or growth; (nn) occupancy costs (including
per square foot of leased premises and as a percentage of sales); (oo) market
share; (pp) market capitalization; (qq) market penetration, (rr) geographic
business expansion, (ss) supervision of litigation, (tt) information technology,
(uu) goals relating to acquisitions, divestitures, joint ventures and similar
transactions, (vv) budget comparisons; (ww) human resources and personnel
objectives (including recruiting and maintaining personnel, employee diversity
goals, employee satisfaction and human resources management); (xx) productivity
improvements; (yy) personal professional objectives (including any performance
criteria set forth in this Section 1.18, the implementation of policies and
plans, the negotiation of transactions, the development of long term business
goals, formation of joint ventures, research or development collaborations, and
the completion of other corporate transactions); (zz) funds from operations
(FFO) or funds available for distribution (FAD); or (aaa) total enterprise
value. Where applicable, the performance targets may be expressed in terms of
attaining a specified level of particular criteria or attainment of a percentage
increase or decrease in the particular criteria. If provided in an Agreement,
measurement of Performance Criteria against goals may exclude the impact of
charges for restructurings, discontinued operations, extraordinary items, and
other unusual or non-recurring items, and the cumulative effects of accounting
changes. Performance Criteria may be established on a Company-wide basis, with
respect to one or more business units, divisions or subsidiaries; and in either
absolute terms or relative to the performance of one or more comparable
companies or an index covering multiple companies or any other basis.

 

 4 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

1.22.Plan

 

Plan means the Lumber Liquidators Holdings, Inc. 2011 Equity Compensation Plan,
as Amended & Restated March 7, 2019.

 

1.23.Related Company

 

With respect to an Incentive Stock Option, Related Company means any “subsidiary
corporation” within the meaning of Code Section 424(f) or “parent corporation”
within the meaning of Code Section 424(e) with respect to the Company. As to all
other Awards, Related Company means any corporation or other entity in a chain
of corporations or other entities in which each corporation or other entity has
a controlling interest in another corporation or other entity in the chain,
beginning with the corporation or other entity in which the Company has a
controlling interest. For this purpose, “controlling interest” is intended to
have the same meaning as in Treasury Regulations
Section 1.409A-1(b)(5)(iii)(E)(1).

 

1.24.SAR

 

SAR means a stock appreciation right that entitles the holder to receive, with
respect to each share of Common Stock encompassed by the exercise of such SAR,
the excess, if any, of the Fair Market Value at the time of exercise over the
Initial Value. References to “SARs” include both Corresponding SARs and SARs
granted independently of Options, unless the context requires otherwise.

 

1.25.Stock Award

 

Stock Award means Common Stock awarded to a Participant under Article VIII,
including shares issued in settlement of benefit obligations under an incentive
compensation or deferral plan of the Company or any successor thereto.

 

1.26.Stock Unit

 

Stock Unit means an Award, in the amount determined by the Administrator and
specified in an Agreement, stated with reference to a specified number of shares
of Common Stock, that entitles the holder to receive a payment for each Stock
Unit equal to the Fair Market Value of a share of Common Stock on the date of
payment.

 

 5 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article II
PURPOSES

 

The Plan is intended to assist the Company and its Related Companies in
recruiting and retaining individuals with ability and initiative by enabling
such persons to participate in the future success of the Company and its Related
Companies and to associate their interests with those of the Company and its
stockholders. The Plan is intended to permit the grant of both Incentive Stock
Options and Non-Qualified Stock Options, and the grant of SARs, Stock Awards,
Stock Units and Incentive Awards. No Option that is intended to be an Incentive
Stock Option shall be invalid for failure to qualify as an Incentive Stock
Option. The proceeds received by the Company from the sale of Common Stock
pursuant to this Plan shall be used for general corporate purposes.

 

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LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article III
ADMINISTRATION

 

The Plan shall be administered by the Administrator. The Administrator shall
have authority to grant Awards, upon such terms (not inconsistent with the
provisions of this Plan) as the Administrator may consider appropriate. Such
terms may include conditions (in addition to those contained in this Plan) on
the exercisability of all or any part of an Option or SAR or on the
transferability or forfeitability of a Stock Award, Stock Unit or Incentive
Award, including by way of example and not of limitation, requirements that the
Participant complete a specified period of employment or service with the
Company or a Related Company, requirements that the Company achieve a specified
level of financial performance or that the Company achieve a specified level of
financial return. Ninety-five percent (95%) of shares issued pursuant to Options
or SARs under the Plan shall be issued pursuant to a minimum vesting period of
at least one year; provided that the Administrator may accelerate the time at
which any Option or SAR may be exercised (i) in the case of death, disability or
Change in Control, or (ii) subject to the minimum one-year vesting period set
forth above, in circumstances other than death, disability or Change in Control;
and provided further that such discretion may not be exercised with respect to
an Award and any related compensation paid pursuant to a written binding
contract in effect on November 2, 2017 that are intended to qualify as
“performance-based compensation” under the special transition rules to Code
Section 162(m) to the extent such discretion would be inconsistent with Code
Section 162(m) and guidance thereunder prior to the changes made by the Tax Cuts
and Jobs Act of 2017 (the “2017 Act”). The Administrator shall have complete
authority to interpret all provisions of this Plan; to prescribe the form of
Agreements; to adopt, amend, and rescind rules and regulations pertaining to the
administration of the Plan; and to make all other determinations necessary or
advisable for the administration of this Plan. The express grant in the Plan of
any specific power to the Administrator shall not be construed as limiting any
power or authority of the Administrator. Any decision made, or action taken, by
the Administrator in connection with the administration of this Plan shall be
final and conclusive.

 

Neither the Administrator nor the Committee nor any member of either or any
delegate thereof shall be liable for any act, omission, interpretation,
construction or determination made in good faith in connection with the Plan,
and the members of the Administrator, Board and the Committee (and any delegate
thereof) shall be entitled in all cases to indemnification and reimbursement by
the Company in respect of any claim, loss, damage or expense (including, without
limitation, reasonable attorney’s fees) arising or resulting therefrom to the
fullest extent permitted by law and/or under any directors’ and officers’
liability insurance coverage which may be in effect from time to time.

 

All expenses of administering this Plan shall be borne by the Company, a Related
Company or a combination thereof.

 

 7 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

The Committee, in its discretion, may delegate to one or more officers of the
Company all or part of the Committee’s authority and duties with respect to
grants and awards (i) to individuals who are not subject to the reporting and
other provisions of Section 16 of the Exchange Act and (ii) that are not
intended to qualify as “performance-based compensation” for purposes of the
transition rules of Code Section 162(m) under the 2017 Act. The Committee may
revoke or amend the terms of a delegation at any time, but such action shall not
invalidate any prior actions of the Committee’s delegate or delegates that were
consistent with the terms of the Plan.

 

Any other provision of this Plan to the contrary notwithstanding, the Committee
may, in its discretion, specify that grants and Awards to any United States
national who is employed by the Company or provides services to the Company or a
Related Company outside of the United States, or to any foreign national who is
employed by the Company or provides services to the Company or a Related
Company, can be made on such terms and conditions that are different from those
specified in the Plan and which, in the judgment of the Committee, are necessary
and desirable to further the purposes of the Plan; other than with respect to
(i) the applicable individual limitation on grants and awards set forth herein;
and (ii) the criteria for establishing the Option price described in Article VI
or SAR Initial Value.

 

Notwithstanding any provision in Article III to the contrary, the terms of any
outstanding Option or SAR may not be amended to reduce the exercise price of
such Option or the Initial Value of such SAR or cancel any outstanding Option or
SAR in exchange for other Options or SARs with an exercise price or Initial
Value that is less than the exercise price of the cancelled Option or the
initial Value of the cancelled SAR or for any cash payment (or shares of Common
Stock with a Fair Market Value) in an amount that exceeds the excess of the Fair
Market Value of the shares of Common Stock underlying such cancelled Option or
SAR over the aggregate Exercise Price of such Option or Initial Value of such
SAR or for any other Award, without shareholder approval; provided, however,
that the restrictions set forth in this Article III shall not apply (i) unless
the Company has a class of shares or stock that is registered under Section 12
of the Exchange Act or (ii) to any adjustment allowed under Article XI.

 

 8 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article IV
ELIGIBILITY

 

Any employee of the Company, any member of the Board, any employee or director
of a Related Company (including a corporation that becomes a Related Company
after the adoption of this Plan) or any consultant, advisor, or other key person
to the Company or a Related Company (including a prospective employee, Board
member, director, consultant, advisor, or other key person) is eligible to
participate in this Plan if the Administrator, in its sole discretion,
determines that such person has contributed or can be expected to contribute to
the profits or growth of the Company or a Related Company.

 

 9 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article V
STOCK SUBJECT TO PLAN

 

5.01.Shares Issued

 

Upon the Award of shares of Common Stock pursuant to a Stock Award or in
settlement of an Award of Stock Units or Incentive Awards, the Company may issue
shares of Common Stock from its authorized but unissued Common Stock. Upon the
exercise of any Option or SAR, the Company may deliver to the Participant (or
the Participant’s broker if the Participant so directs), shares of Common Stock
from its authorized but unissued Common Stock.

 

5.02.Aggregate Limit

 

The maximum aggregate number of shares of Common Stock that may be issued under
this Plan, pursuant to the exercise of SARs and Options (including Incentive
Stock Options and Non-Qualified Stock Options), the grant of Stock Awards and
the settlement of Stock Units and Incentive Awards is (i) 1,750,000 shares of
Common Stock, plus (ii) the number of shares of Common Stock available for grant
pursuant to Awards under the Lumber Liquidators Holdings, Inc. 2011 Equity
Compensation Plan immediately prior to the Plan’s approval, as amended and
restated herein, by stockholders in accordance with Article XVI, plus (iii) the
number of shares of Common Stock subject to Awards granted under the Lumber
Liquidators Holdings, Inc. 2011 Equity Compensation Plan and outstanding
immediately prior to the Plan’s approval, as amended and restated herein, by
stockholders in accordance with Article XVI, which again become available for
grants of Awards in accordance with the provisions below after such approval.
The maximum aggregate number of shares of Common Stock that may be issued under
this Plan shall be subject to adjustment as provided in Article XI.

 

5.03.Individual Annual Limits

 

No participant may be granted, in a single calendar year, Options, SARs, Stock
Awards and Stock Units, in the aggregate, with respect to more than 500,000
(five hundred thousand) shares of Common Stock. For purposes of the foregoing
limit, an Option and Corresponding SAR shall be treated as a single Award. No
participant may be granted, in a single calendar year, an Incentive Award for
more than $2,000,000 (two million dollars); provided that Non-Employee Directors
shall not be eligible for Incentive Awards. Further, no Non-Employee Director
may be granted, in a single calendar year, Options, SARs, Stock Awards and Stock
Units, in the aggregate, with respect to more than 100,000 (one hundred
thousand) shares of Common Stock. The foregoing individual annual limits shall
be subject to adjustment as provided in Article XI.

 

 10 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

5.04.Reallocation of Shares

 

(a)        If an Award under the Plan, or the Lumber Liquidators Holdings, Inc.
2011 Equity Compensation Plan immediately prior to the Plan’s approval, as
amended and restated herein, by stockholders in accordance with Article XVI, (or
portion thereof) is forfeited, is cancelled, expires, lapses or otherwise is
terminated without being exercised or payment having been made in shares of
Common Stock, the shares of Common Stock allocable to the forfeited, cancelled,
expired, lapsed or otherwise terminated Award (or portion thereof) shall again
be available for Awards to be granted under the Plan.

 

(b)        Shares of Common Stock that are tendered by a Participant or withheld
as full or partial payment of withholding or other taxes with respect to an
Award or as payment for the exercise of an Option, under this Plan or the Lumber
Liquidators Holdings, Inc. 2011 Equity Compensation Plan immediately prior to
the Plan’s approval, as amended and restated herein, by stockholders in
accordance with Article XVI, shall not be reallocated to the number of shares of
Common Stock available for Awards to be granted under this Plan.

 

(c)       Awards valued by reference to Common Stock that may be settled in
equivalent cash value will count as shares of Common Stock delivered to the same
extent as if the Award were settled in shares of Common Stock. Awards that by
their terms do not permit settlement in shares of Common Stock shall not reduce
the number of shares of Common Stock available for issuance under the Plan.
Settlement of Incentive Awards in Shares of Common Stock will reduce the number
of shares of Common Stock available for issuance. A share of Common Stock issued
in connection with an Award under the Plan shall reduce the total number of
shares of Common Stock available for issuance under the Plan by one; provided,
however, that, upon settlement of an SAR, the number of shares of Common Stock
underlying the portion of the SAR that is exercised will be treated as having
been delivered for purposes of determining the maximum number of shares of
Common Stock available for grant under the Plan and shall not again be treated
as available for grant under the Plan.

 

(d)       Shares of Common Stock delivered under the Plan in settlement of an
Award issued or made (i) upon the assumption, substitution, conversion or
replacement of outstanding awards under a plan or arrangement of an acquired
entity or (ii) as a post-transaction grant under such a plan or arrangement of
an acquired entity shall not reduce or be counted against the maximum number of
shares of Common Stock available for delivery under the Plan, to the extent that
the exemption for transactions in connection with mergers and acquisitions from
the stockholder approval requirements of the New York Stock Exchange for equity
compensation plans applies.

 

(e)       Consistent with the requirements specified above in this Section 5.04,
the Committee may from time to time adopt and observe such procedures concerning
the counting of shares against the Plan maximum as it may deem appropriate,
including rules more restrictive than those set forth above to the extent
necessary to satisfy the requirements of any national securities exchange on
which the Common Stock is listed or any applicable regulatory requirement.

 

 11 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article VI
OPTIONS

 

6.01.Award

 

In accordance with the provisions of Article IV, the Administrator will
designate each individual to whom an Option is to be granted and will specify
the number of shares of Common Stock covered by each such Award.

 

6.02.Option Price

 

The price per share for Common Stock purchased on the exercise of an Option
shall be determined by the Administrator on the date of grant, but shall be not
less than the Fair Market Value on the date the Option is granted.

 

6.03.Maximum Option Period

 

The maximum period in which an Option may be exercised shall be ten years from
the date such Option was granted. The terms of any Option may provide that it
has a term that is less than such maximum period.

 

6.04.Nontransferability

 

Except as provided in Section 6.05, each Option granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. In
the event of any transfer of an Option (by will or by the laws of descent and
distribution), the Option and any Corresponding SAR that relates to such Option
must be transferred to the same person or persons or entity or entities. Except
as provided in Section 6.05, during the lifetime of the Participant to whom the
Option is granted, the Option may be exercised only by the Participant. No right
or interest of a Participant in any Option shall be liable for, or subject to,
any lien, obligation, or liability of such Participant.

 

6.05.Transferable Options

 

Section 6.04 to the contrary notwithstanding, an Option that is not an Incentive
Stock Option may be transferred pursuant to the applicable Agreement, subject to
the applicable securities law requirements as in effect from time to time. The
holder of an Option transferred pursuant to this Section shall be bound by the
same terms and conditions that governed the Option during the period that it was
held by the Participant; provided, however, that such transferee may not
transfer the Option except by will or the laws of descent and distribution. In
the event of any transfer of an Option (by the Participant or his transferee),
the Option and any Corresponding SAR that relates to such Option must be
transferred to the same person or persons or entity or entities.

 

 12 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

6.06.Employee Status

 

For purposes of determining the applicability of Code Section 422 (relating to
incentive stock options) or in the event that the terms of any Option provide
that it may be exercised only during employment or continued service or within a
specified period of time after termination of employment or service, the
Administrator may decide to what extent leaves of absence for governmental or
military service, illness, temporary disability, or other reasons shall not be
deemed interruptions of continuous employment or service.

 

6.07.Exercise

 

Subject to the provisions of this Plan, including the minimum vesting period
rules set forth in Article III, and the applicable Agreement, an Option may be
exercised in whole at any time or in part from time to time at such times and in
compliance with such requirements as the Administrator shall determine;
provided, however, that Incentive Stock Options (granted under the Plan and all
plans of the Company and its Related Companies) may not be first exercisable in
a calendar year for stock having a Fair Market Value (determined as of the date
an Option is granted) exceeding the limit prescribed by Code Section 422(d). An
Option granted under this Plan may be exercised with respect to any number of
whole shares less than the full number for which the Option could be exercised.
A partial exercise of an Option shall not affect the right to exercise the
Option from time to time in accordance with this Plan and the applicable
Agreement with respect to the remaining shares subject to the Option. The
exercise of an Option shall result in the termination of any Corresponding SAR
to the extent of the number of shares with respect to which the Option is
exercised. No Option may include provisions that “reload” the Option upon
exercise.

 

6.08.Payment

 

Payment of the Option price shall be made in cash or a cash equivalent
acceptable to the Administrator, or through a cashless exercise procedure
approved by Administrator involving a securities broker approved by the
Administrator. In addition, subject to rules established by the Administrator
(A) unless prohibited in the Option Agreement, payment of all or part of the
Option price may be made with shares of Common Stock including by (i) surrender
to the Company of shares of Common Stock, (ii) attestation of Common Stock
ownership; and (B) if provided in the Option Agreement, for Options not intended
to be Incentive Stock Options, receipt by the Participant of fewer shares than
would otherwise be issuable on exercise of the option (“net exercise”). If
Common Stock is used to pay all or part of the Option price, the sum of the cash
and cash equivalent and the Fair Market Value (determined as of the day
preceding the date of exercise) of the shares surrendered must not be less than
the Option price of the shares for which the Option is being exercised.

 

 13 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

6.09.Change in Control

 

Each outstanding Option shall be exercisable (in whole or in part at the
discretion of the holder) to the extent provided in the applicable Agreement in
the event of a separation from service following a Change in Control, unless
otherwise provided in such Agreement.

 

6.10.Stockholder Rights

 

No Participant shall have any rights as a stockholder with respect to shares
subject to his Option until the date of exercise of such Option.

 

6.11.Disposition of Common Stock

 

A Participant shall notify the Company of any sale or other disposition of
Common Stock acquired pursuant to an Option that was an Incentive Stock Option
if such sale or disposition occurs (i) within two years of the grant of an
Option or (ii) within one year of the issuance of the Common Stock to the
Participant on exercise of the Option. Such notice shall be in writing and
directed to the Secretary of the Company.

 

 14 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article VII
SARS

 

7.01.Award

 

In accordance with the provisions of Article IV, the Administrator will
designate each individual to whom SARs are to be granted and will specify the
number of shares covered by each such Award.

 

7.02.Maximum SAR Period

 

The maximum period in which a SAR may be exercised shall be ten years from the
date such SAR was granted. The terms of any SAR may provide that it has a term
that is less than such maximum period.

 

7.03.Nontransferability

 

Except as provided in Section 7.04, each SAR granted under this Plan shall be
nontransferable except by will or by the laws of descent and distribution. In
the event of any such transfer, a Corresponding SAR and the related Option must
be transferred to the same person or persons or entity or entities. Except as
provided in Section 7.04, during the lifetime of the Participant to whom the SAR
is granted, the SAR may be exercised only by the Participant. No right or
interest of a Participant in any SAR shall be liable for, or subject to, any
lien, obligation, or liability of such Participant.

 

7.04.Transferable SARs

 

Section 7.03 to the contrary notwithstanding, a corresponding SAR that is not
related to an Incentive Stock Option may be transferred pursuant to the
applicable Agreement, subject to applicable securities law requirements as in
effect from time to time. The holder of a SAR transferred pursuant to this
Section shall be bound by the same terms and conditions that governed the SAR
during the period that it was held by the Participant; provided, however, that
such transferee may not transfer the SAR except by will or the laws of descent
and distribution. In the event of any transfer of a Corresponding SAR (by the
Participant or his transferee), the Corresponding SAR and the related Option
must be transferred to the same person or person or entity or entities.

 

 15 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

7.05.Exercise

 

Subject to the provisions of this Plan, including the minimum vesting period
rules set forth in Article III, and the applicable Agreement, an SAR may be
exercised in whole at any time or in part from time to time at such times and in
compliance with such requirements as the Administrator shall determine;
provided, however, that a Corresponding SAR that is related to an Incentive
Stock Option may be exercised only to the extent that the related Option is
exercisable and only when the Fair Market Value exceeds the option price of the
related Option. An SAR granted under this Plan may be exercised with respect to
any number of whole shares less than the full number for which the SAR could be
exercised. A partial exercise of an SAR shall not affect the right to exercise
the SAR from time to time in accordance with this Plan and the applicable
Agreement with respect to the remaining shares subject to the SAR. The exercise
of a Corresponding SAR shall result in the termination of the related Option to
the extent of the number of shares with respect to which the SAR is exercised.
No Corresponding SARs (under all incentive stock option plans of the Company and
its Related Companies) that are related to Incentive Stock Options may first be
exercisable in any calendar year for stock having an aggregate Fair Market Value
(determined as of the date the related Option is granted) that exceeds the limit
prescribed by Code Section 422(d).

 

7.06.Change in Control

 

Each outstanding SAR shall be exercisable (in whole or in part at the discretion
of the holder) to the extent provided in the applicable Agreement in the event
of a separation from service following a Change in Control, unless otherwise
provided in such Agreement.

 

7.07.Employee Status

 

If the terms of any SAR provide that it may be exercised only during employment
or continued service or within a specified period of time after termination of
employment or service, the Administrator may decide to what extent leaves of
absence for governmental or military service, illness, temporary disability or
other reasons shall not be deemed interruptions of continuous employment or
service.

 

7.08.Settlement

 

At the Administrator’s discretion, the amount payable as a result of the
exercise of an SAR may be settled in cash, Common Stock, or a combination of
cash and Common Stock. A fractional share will not be deliverable upon the
exercise of a SAR, and any such fractional share shall be disregarded.

 

7.09.Stockholder Rights

 

No Participant shall, as a result of receiving an SAR, have any rights as a
stockholder of the Company until the date that the SAR is exercised and then
only to the extent that the SAR is settled by the issuance of Common Stock.

 

 16 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article VIII
STOCK AWARDS

 

8.01.Award

 

In accordance with the provisions of Article IV, the Administrator will
designate each individual to whom a Stock Award is to be made and will specify
the number of shares of Common Stock covered by each such Award

 

8.02.Vesting

 

The Administrator, on the date of the Award, may prescribe that a Participant’s
rights in a Stock Award shall be forfeitable or otherwise restricted for a
period of time or subject to such other conditions as may be set forth in the
Agreement. By way of example and not of limitation, the restrictions may
postpone transferability of the shares or may provide that the shares will be
forfeited if the Participant separates from the service of the Company and its
Related Company before the expiration of a stated period, or if the Company, a
Related Company, the Company and its Related Companies or the Participant fails
to achieve stated performance objectives, including performance objectives
stated with reference to Performance Criteria.

 

8.03.Employee Status

 

In the event that the terms of any Stock Award provide that shares may become
transferable and nonforfeitable thereunder only after completion of a specified
period of employment or service, the Administrator may decide in each case to
what extent leaves of absence for governmental or military service, illness,
temporary disability, or other reasons shall not be deemed interruptions of
continuous employment or service.

 

8.04.Change in Control

 

Each outstanding Stock Award shall be transferable and nonforfeitable to the
extent provided in the applicable Agreement in the event of a separation from
service following a Change in Control, unless otherwise provided in such
Agreement.

 

8.05.Stockholder Rights

 

Prior to their forfeiture, if provided in an Agreement, and while the shares of
Common Stock granted pursuant to the Stock Award may be forfeited or are
nontransferable, a Participant will have all the rights of a stockholder with
respect to a Stock Award, including the right to receive dividends and vote the
shares; provided, however, that during such period (i) a Participant may not
sell, transfer, pledge, exchange, hypothecate, or otherwise dispose of shares of
Common Stock granted pursuant to a Stock Award, (ii) the Company shall retain
custody of the certificates evidencing shares of Common Stock granted pursuant
to a Stock Award or the Company’s transfer agent will hold the awarded shares in
a book entry account for the benefit of the Participant, the terms of which
account shall restrict the transferability of shares held in the account until
the awarded shares are transferable and are no longer forfeitable and (iii) the
Participant will deliver to the Company a stock power, endorsed in blank, with
respect to each Stock Award. Unless the Agreement otherwise provides, dividends
paid with respect to a Stock Award in the form of Common Stock shall be
accumulated and become transferable and nonforfeitable at the same time as the
underlying Stock Award (or portion thereof) becomes transferable and
nonforfeitable. The limitations set forth in the preceding sentences shall not
apply after the shares of Common Stock granted under the Stock Award are
transferable and are no longer forfeitable.

 

 17 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article IX
incentive awards

 

9.01.Award

 

The Administrator shall designate Participants to whom Incentive Awards are
made. All Incentive Awards shall be finally determined exclusively by the
Administrator under the procedures established by the Administrator.
Non-Employee Directors shall not be eligible to receive Incentive Awards.

 

9.02.Terms and Conditions

 

The Administrator, at the time an Incentive Award is made, shall specify the
terms and conditions that govern the Award. The Administrator may grant
Incentive Awards as part of another plan or program, such as an annual bonus
program, provided the applicable terms of this Plan are satisfied. Such terms
and conditions shall prescribe that the Incentive Award shall be earned only if,
and to the extent that, performance objectives are satisfied. The restrictions
set forth in the Agreement must include the attainment of performance
objectives, including performance objectives stated with reference to
Performance Criteria. By way of example and not of limitation, the performance
objectives may provide that the Incentive Award will be earned only if the
Company, a Related Company or the Company and its Related Companies or the
Participant achieves stated objectives, including objectives stated with
reference to Performance Criteria. The Administrator, at the time an Incentive
Award is made, shall also specify when amounts shall be payable under the
Incentive Award. Notwithstanding the preceding sentences of this Section 9.02,
the Administrator may reduce the duration of the performance period and may
adjust the performance objectives for outstanding Incentive Awards in connection
with a Participant’s death or disability or a Change in Control, but only to the
extent permitted by Code Section 162(m) and guidance thereunder prior to the
changes made by the 2017 Act in the case of Incentive Awards intended to qualify
as “performance-based compensation” for purposes of the transition rules under
Code Section 162(m) for compensation paid pursuant to a written binding contract
in effect on November 2, 2017.

 

9.03.Payment

 

In the discretion of the Administrator, the Award payable when an Incentive
Award is earned may be settled in cash, by the issuance of Common Stock, or a
combination of cash and Common Stock.

 

9.04.Nontransferability

 

Except as provided in Section 9.05, Incentive Awards granted under this Plan
shall be nontransferable except by will or by the laws of descent and
distribution. No right or interest of a Participant in an Incentive Award shall
be liable for, or subject to, any lien, obligation, or liability of such
Participant.

 

 18 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

9.05.Transferable Incentive Awards

 

Section 9.04 to the contrary notwithstanding, an Incentive Award may be
transferred pursuant to the applicable Agreement, subject to applicable
securities law requirements as in effect from time to time. The holder of an
Incentive Award transferred pursuant to this Section shall be bound by the same
terms and conditions that governed the Incentive Award during the period that it
was held by the Participant; provided, however, that such transferee may not
transfer the Incentive Award except by will or the laws of descent and
distribution.

 

9.06.Employee Status

 

If the terms of an Incentive Award provide that a payment will be made
thereunder only if the Participant completes a stated period of employment or
service, the Administrator may decide to what extent leaves of absence for
governmental or military service, illness, temporary disability or other reasons
shall not be deemed interruptions of continuous employment or service.

 

9.07.Change in Control

 

Each outstanding Incentive Award shall be earned to the extent provided in the
applicable Agreement in the event of a separation from service following a
Change in Control, unless otherwise provided in such Agreement.

 

9.08.Stockholder Rights

 

No Participant shall, as a result of receiving an Incentive Award, have any
rights as a stockholder of the Company or any Related Company on account of such
Award until, and except to the extent that, the Incentive Award is earned and
settled in shares of Common Stock.

 

 19 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article X
STOCK UNITS

 

10.01.Award

 

In accordance with the provisions of Article IV, the Administrator will
designate each individual to whom an Award of Stock Units is to be made and will
specify the number of Stock Units covered by such Awards.

 

10.02.Earning the Award

 

The Administrator, on the date of grant of the Award, may prescribe that the
Stock Units or a portion thereof, will be earned, and the Participant will be
entitled to receive a payment pursuant to the Award of Stock Units, only upon
the satisfaction of performance objectives or such other criteria as may be
prescribed by the Administrator and set forth in the Agreement. If divided
equivalents are provided for under the Agreement, such dividend equivalents
shall be subject to the same conditions on entitlement to payment as the
underlying Stock Unit Award or portion thereof.

 

10.03.Payment

 

In accordance with the Agreement, the amount payable when an award of Stock
Units is earned may be settled in cash, Common Stock or a combination of cash
and Common Stock. A fractional share shall not be deliverable when an Award of
Stock Units is earned, and any such fractional share shall be disregarded.

 

10.04.Nontransferability

 

Except as provided in Section 10.05, Participant may not sell, transfer, pledge,
exchange, hypothecate, or otherwise dispose of a Stock Unit Award other than by
will or the laws of descent and distribution. The limitations set forth in the
preceding sentence shall not apply to Common Stock issued as payment pursuant to
a Stock Unit Award.

 

10.05.Transferable Stock Units

 

Section 10.04 to the contrary notwithstanding, an award of Stock Units may be
transferred pursuant to the applicable Agreement, subject to applicable
securities law requirements as in effect from time to time. The holder of Stock
Units transferred pursuant to this Section shall be bound by the same terms and
conditions that governed the Stock Units during the period that they were held
by the Participant; provided, however that such transferee may not transfer
Stock Units except by will or the laws of descent and distribution.

 

 20 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

10.06.Employee Status

 

In the event that the terms of any Stock Unit award provide that no payment will
be made unless the Participant completes a stated period of employment or
service, the Administrator may decide to what extent leaves of absence for
government or military service, illness, temporary disability, or other reasons
shall not be deemed interruptions of continuous employment or service.

 

10.07.Change in Control

 

Each outstanding Stock Unit shall be earned to the extent provided in the
applicable Agreement in the event of a separation from service following a
Change in Control, unless otherwise provided in such Agreement.

 

10.08.Stockholder Rights

 

A grantee awarded a Stock Unit Award will have no voting rights with respect to
such Stock Unit Award prior to the delivery of shares of Common Stock in
settlement of such Stock Unit Award. If provided in an Agreement, a grantee will
have the right to receive dividend equivalents in respect of the Stock Unit
Award, which dividend equivalents shall be either deemed reinvested in
additional Stock Unit Awards, which shall remain subject to the same forfeiture
conditions applicable to the Stock Unit Awards to which such dividend
equivalents relate, or paid in cash if and at the time the Stock Unit Awards are
no longer subject to forfeiture and deliverable.

 

 21 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article XI
ADJUSTMENT UPON CHANGE IN COMMON STOCK

 

The maximum number of shares and type of securities as to which Awards may be
granted under this Plan, the terms of outstanding Awards, and the individual
annual limitations on the number of shares of Common Stock or value for which
Awards may be granted or settled shall be adjusted as the Committee shall
determine to be equitably required in the event that (a) the Company (i) effects
one or more stock dividends, stock split-ups, subdivisions or consolidations of
shares or (ii) engages in a transaction to which Code Section 424 applies, or
(b) there occurs any other event which, in the judgment of the Committee
necessitates such action. Any determination made under this Article XI by the
Committee shall be final and conclusive.

 

The issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, for cash or property, or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefore, or upon conversion of shares or obligations of
the Company convertible into such shares or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the maximum
number of shares as to which Awards may be granted, the per individual
limitations on the number of shares of Common Stock for which Awards may be
granted or the terms of outstanding Awards.

 

The Committee may make Awards in substitution for performance shares, phantom
shares, stock awards, stock options, stock appreciation rights, stock units, or
similar awards held by an individual who becomes an employee or other service
provider of the Company or a Related Company in connection with a transaction or
event described in the first paragraph of this Article XI. Notwithstanding any
provision of the Plan (other than the limitations of Section 5.02), the terms of
such substituted Awards shall be as the Committee, in its discretion, determines
is appropriate.

 

The Committee shall adjust performance goals established with respect to
Performance Criteria (“Performance Goals”) (either up or down) and the level of
an Award (intended to be performance-based compensation under the transition
rules of Code Section 162(m) for compensation paid pursuant to a written biding
contract in effect as of November 2, 2017) that a Participant may earn under
this Plan, but only to the extent permitted pursuant to the transition rules of
Code Section 162(m), if the Committee determines that the occurrence of external
changes or other unanticipated business conditions have materially affected the
fairness of the goals and have unduly influenced the Company’s ability to meet
them, including without limitation, events such as material acquisitions,
changes in the capital structure of the Company, and extraordinary accounting
changes. In addition, unless the Agreement otherwise provides, performance goals
established with respect to Performance Criteria and Awards conditioned on
attainment thereof shall be calculated without regard to any changes in
accounting standards that may be required by the Financial Accounting Standards
Board after such performance goals are established.

 

 22 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

In the event of a Change in Control, unless an outstanding Award is assumed by
the surviving company or replaced with an equivalent Award granted by the
surviving company in substitution for such outstanding Award, the Committee
shall cancel any outstanding Awards that are not vested and nonforfeitable as of
the consummation of such Change in Control (unless the Committee in its
discretion accelerates the vesting of any such Awards in lieu of such
cancellation) and with respect to any vested and nonforfeitable Awards, the
Committee may either (i) allow all grantees to exercise such Awards of Options
and SARs within a reasonable period prior to the consummation of the Change in
Control and cancel any outstanding Options or SARs that remain unexercised upon
consummation of the Change in Control, or (ii) cancel any or all of such
outstanding Awards in exchange for a payment (in cash and/or in securities
and/or other property) in an amount equal to the amount that the grantee would
have received (net of the Exercise Price with respect to any Options or the
Initial Value with respect to any SARs) if such vested Awards were settled or
distributed or such vested Options and SARs were exercised immediately prior to
the consummation of the Change in Control. Notwithstanding the foregoing, if an
Option or SAR is not assumed by the surviving company or replaced with an
equivalent Award issued by the surviving company and the Exercise Price with
respect to any outstanding Option or the Initial Value of any outstanding SAR
exceeds the amount payable per share of Common Stock the Change in Control, such
Awards shall be cancelled without any payment to the grantee. Notwithstanding
the forgoing, (i) if an Award (other than an Option or SAR) is intended to
comply with the transition rule under Section 162(m), no payment or settlement
of such Award shall be made until the earlier (A) the consummation of a Change
in Control (as determined by the Committee in its sole discretion) or (B) the
attainment of the Performance Criteria upon which the Award is conditioned as
certified by the Committee; and (ii) if an Award constitutes deferred
compensation within the meaning of Code Section 409A, no payment or settlement
of such Award shall be made unless the Change in Control constitutes a change in
ownership or effective control of the Company or a change in ownership of a
substantial portion of the assets of the Company as described in Treasury
Regulation Section 1.409A-3(i)(5).

 

 23 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article XII
COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES

 

No Option or SAR shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment shall
be made under this Plan except in compliance with all applicable federal and
state laws and regulations (including, without limitation, withholding tax
requirements), any listing agreement to which the Company is a party, and the
rules of all domestic stock exchanges on which the Company’s shares may be
listed. The Company shall have the right to rely on an opinion of its counsel as
to such compliance. Any share certificate issued to evidence Common Stock when a
Stock Award is granted, Incentive Award or Stock Unit is settled or for which an
Option or SAR is exercised may bear such legends and statements as the
Administrator may deem advisable to assure compliance with federal and state
laws and regulations. No Option or SAR shall be exercisable, no Stock Award,
Stock Unit or Incentive Award shall be granted, no Common Stock shall be issued,
no certificate for shares shall be delivered, and no payment shall be made under
this Plan until the Company has obtained such consent or approval as the
Administrator may deem advisable from regulatory bodies having jurisdiction over
such matters.

 

 24 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article XIII
GENERAL PROVISIONS

 

13.01.Effect on Employment and Service

 

Neither the adoption of this Plan, its operation, nor any documents describing
or referring to this Plan (or any part thereof), shall confer upon any
individual any right to continue in the employ or service of the Company or a
Related Company or in any way affect any right or power of the Company or a
Related Company to terminate the employment or service of any individual at any
time with or without assigning a reason therefore.

 

13.02.Unfunded Plan

 

The Plan, insofar as it provides for grants, shall be unfunded, and the Company
shall not be required to segregate any assets that may at any time be
represented by grants under this Plan. Any liability of the Company to any
person with respect to any grant under this Plan shall be based solely upon any
contractual obligations that may be created pursuant to this Plan. No such
obligation of the Company shall be deemed to be secured by any pledge of, or
other encumbrance on, any property of the Company.

 

13.03.Rules of Construction

 

Headings are given to the Articles and Sections of this Plan solely as a
convenience to facilitate reference. The reference to any statute, regulation,
or other provision of law shall be construed to refer to any amendment to or
successor of such provision of law.

 

13.04.Tax Withholding

 

Each Participant shall be responsible for satisfying any income and employment
tax withholding obligation attributable to participation in this Plan. In
accordance with procedures established by the Administrator, a Participant may
surrender shares of Common Stock, or receive fewer shares of Common Stock than
otherwise would be issuable, (i) in satisfaction of all or part of Participant’s
minimum statutorily required withholding obligation, or (ii) in satisfaction of
withholding for Participant at such other rate as may be permitted, consistent
with equity classification, under FASB ASC Topic 718 – Compensation – Stock
Compensation.

 

13.05.Section 409A

 

This Plan is intended to provide compensation that is exempt from or that
complies with Code Section 409A and guidance thereunder (“Section 409A”), and
the Plan’s terms and the terms of any Agreement shall be construed in a manner
that is compliant with or exempt from the application of Section 409A, as
appropriate. For purposes of Section 409A, each payment under this Plan shall be
deemed to be a separate payment.

 

 25 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Notwithstanding any provision of this Plan or an Agreement to the contrary, to
the extent that any payments are subject to Section 409A, if the Participant is
a “specified employee” within the meaning of Section 409A as of the date of the
Participant’s termination of employment and the Company determines, in good
faith, that immediate payment of any amounts or benefits under this Plan would
cause a violation of Section 409A, then any amounts or benefits payable under
this Plan upon the Participant’s “separation from service” within the meaning of
Section 409A which (i) are subject to the provisions of Section 409A; (ii) are
not otherwise exempt from Section 409A; and (iii) would otherwise be payable
during the first six-month period following such separation from service, shall
be paid on the first business day next following the earlier of (1) the date
that is six months and one day following the Participant’s separation from
service or (2) the date of the Participant’s death.

 

13.06.Tax Consequences

 

Nothing in this Plan or an Agreement shall constitute a representation by the
Company to a Participant regarding the tax consequences of any Award received by
a Participant under this Plan. Although the Company may endeavor to (i) qualify
an Award for favorable federal tax treatment or (ii) avoid adverse tax treatment
(e.g., under Section 409A), the Company makes no representation to that effect
and expressly disavows any covenant to maintain favorable tax treatment. The
Company shall be unconstrained in its corporate activities without regard to the
potential negative tax impact on holders of Awards under this Plan.

 

13.07.Clawback

 

Any Award granted pursuant to this Plan is subject to such deductions, repayment
and clawback as may be required by any applicable law, government regulation or
stock exchange listing requirement (or any policy adopted by the Company
pursuant to any such law, government regulation or stock exchange listing
requirement) and as set forth in the applicable Agreement. A Participant’s
acceptance of any Award granted pursuant to this Plan constitutes acceptance of
the repayment provisions described in this Section.

 

13.08.Binding Effect

 

The terms of this Plan and each Award granted hereunder shall be binding upon
and inure to the benefit of legatees, distributees, and personal representatives
of Participants and the successors of the Company and any Related Company.

 

 26 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article XIV
AMENDMENT

 

The Board may amend or terminate this Plan from time to time; provided, however,
that no amendment may become effective until stockholder approval is obtained if
required by applicable law or any exchange on which the Common Stock is listed.
No amendment shall, without a Participant’s consent, adversely affect any rights
of such Participant under any Award outstanding at the time such amendment is
made.

 

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LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article XV
DURATION OF PLAN

 

No Award may be granted under this Plan more than ten years after the earlier of
the date the Plan, as hereby amended and restated, is adopted by the Board or
approved by stockholders in accordance with Article XVI. Awards granted before
that date shall remain valid in accordance with their terms.

 

 28 

LUMBER LIQUIDATORS HOLDINGS, INC.

2011 Equity Compensation Plan

(As Amended & Restated March 7, 2019)

 

Article XVI
EFFECTIVE DATE OF PLAN

 

Options, SARs, Incentive Awards, and Stock Units may be granted under this Plan
upon its adoption by the Board, provided that no Option, SAR, Incentive Award,
or Stock Units shall be exercisable or shall be settled unless this Plan is
approved by a majority of the votes cast by the Company’s stockholders, voting
either in person or by proxy, at a duly held stockholders’ meeting at which a
quorum is present. Stock Awards may be granted under this Plan upon the later of
its adoption by the Board or its approval by stockholders in accordance with the
preceding sentence. If the Plan is not approved by stockholders within twelve
(12) months after approval by the Board, the Lumber Liquidators Holdings, Inc.
2011 Equity Compensation Plan shall remain in effect, as before the approval of
the Plan by the Board.

 

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