Exhibit 10.2

 

SEVERANCE AGREEMENT

 

THIS SEVERANCE AGREEMENT (the “Agreement”) is made and entered into as of the
26th day of July, 2018, by and between Lumber Liquidators Holdings, Inc., a
Delaware corporation (the “Company”), and Martin Agard (the “Employee”).

 

WITNESSETH:

 

WHEREAS, the Employee is a senior executive of the Company and has made and is
expected to continue to make major contributions to the short-term and long-term
profitability, growth and financial strength of the Company and its
subsidiaries; and

 

WHEREAS, in consideration of the Employee’s continued employment with the
Company and its subsidiaries, the Company desires to provide the Employee with
certain compensation and benefits set forth in this Agreement in order to
ameliorate the financial and career impact on the Employee if the Employee’s
employment with the Company and its subsidiaries is terminated under certain
circumstances; and

 

WHEREAS, the Board of Directors of the Company (the “Board”) also recognizes
that, as is the case with any company, the possibility of a Change in Control
(as hereinafter defined) exists and that such possibility, and the uncertainty
and questions which it may raise among management, may result in the departure
or distraction of key management personnel to the detriment of the Company and
its subsidiaries; and

 

WHEREAS, the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of, and the
continued rendering of services by, members of the Company’s key management
personnel, including the Employee, in connection with their assigned duties
without distraction, and without the Company’s loss of needed key management
personnel, arising from the possibility of a Change in Control; and

 

WHEREAS, in consideration of the Employee’s continued employment with the
Company and its subsidiaries, the Company also desires to provide the Employee
with certain additional compensation and benefits set forth in this Agreement if
the Employee’s employment with the Company and its subsidiaries is terminated
for a reason related to a Change in Control.

 

NOW, THEREFORE, in consideration of the terms contained herein, including the
compensation and benefits the Company agrees to pay to the Employee upon certain
events, the Employee’s continued employment with the Company and its
subsidiaries, the Employee’s covenants contained in this Agreement and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Employee hereby agree as follows:

 

1.TERMINATION OF EMPLOYMENT

 

1.1For purposes of this Agreement, the following terms shall have the meanings
indicated:

 

(a)Annual Base Salary. Annual Base Salary shall mean the annualized base cash
compensation payable by the Company and its subsidiaries to the Employee,
excluding bonuses, commissions, severance payments, company contributions,
qualified plan contributions or benefits, expense reimbursements, fringe
benefits and all other payments; prior to reduction for any deferrals under any
employee benefit plan of the Company or any of its subsidiaries; and
disregarding any reduction that would give the Employee “Good Reason” to
terminate the Employee’s employment under Section 1.1(f)(iii); as of (i) the
termination of the Employee’s employment if the Employee’s employment is not
terminated during a Change in Control Period or (ii)(A) the termination of the
Employee’s employment or (B) immediately before the Change in Control Period,
whichever is higher, if the Employee’s employment is terminated during a Change
in Control Period.

 

 

 

 

(b)Change in Control. Change in Control shall mean any of the following events:

 

(i)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 fifty percent (50%) of the total fair market value
or total voting power of the then outstanding Common Stock;

 

(ii)a majority of the members of the Board is replaced during a twelve
(12)-month period by directors who do not qualify as Incumbent Board Members; or

 

(iii)any person, including a “group” as defined below, acquires (or has acquired
during the twelve (12)-month period ending on the date of the most recent
acquisition by such person or persons) all or substantially all of the assets of
the Company.

 

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.

 

(c)Change in Control Period. Change in Control Period shall mean (i) any period
in which the Company or any of its subsidiaries has initiated a transaction
process or is engaged in discussions with a third party about a specific
transaction that, if consummated, would result in a Change in Control and before
the complete abandonment of such process or discussions without the transaction
being consummated, (ii) any period during which the Company or any of its
subsidiaries has become a party to a definitive agreement to consummate a
transaction that would result in a Change in Control and before the termination
of such agreement without the transaction being consummated, and (iii) any
period commencing upon the effective date of the Change in Control and ending on
the twelve (12)-month anniversary of the effective date of such Change in
Control; provided, however, notwithstanding the foregoing, in no event will the
Change in Control Period be deemed to have commenced earlier than six (6) months
prior to the Change in Control.

 

(d)Cause. “Cause” shall mean any one of the following: (A) the Employee’s gross
neglect of duty to the Company or any of its subsidiaries or gross negligence or
intentional misconduct in the course of Employee’s employment; (B) the
Employee’s having been indicted for, or entered a plea of guilty or nolo
contendere to, a crime that constitutes a felony or the Employee’s commission of
any other act or omission involving fraud with respect to the Company or any of
its subsidiaries or any of their customers or suppliers; (C) the Employee’s
breach of any fiduciary duty owed to the Company or any of its subsidiaries; (D)
the Employee being prohibited from serving as an officer of a reporting company
subject to Sections 13 or 15(d) of the Securities Exchange Act of 1934, as
amended (the “Securities Exchange Act”), by applicable law, as the result of any
order of a court or governmental agency or other judicial or administrative
proceeding or as the result of any contractual arrangements to which the
Employee is bound; (E) the Employee’s willful and intentional non-performance of
Employee’s duties and responsibilities with the Company or any subsidiary or
willful disregard of any legal directives of the Board or the Employee’s direct
report and failure, in either case, to cure such breach, if capable of being
cured, within ten (10) days of receipt of written notice from the Company;
and/or (F) the breach by the Employee of any confidentiality, non-competition,
non-solicitation or other restrictive covenants to which the Employee is bound
as related to the Company or any of its subsidiaries that results in a material
adverse effect on the business or reputation of the Company or any of its
subsidiaries and the failure to cure such breach, if capable of being cured,
within ten (10) days of receipt of written notice from the Company.

 

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(e)Common Stock. Common Stock means the common stock, par value $0.001 per
share, of the Company.

 

(f)Good Reason. “Good Reason” shall mean the termination by the Employee of the
Employee’s employment on account of the following events occurring without the
Employee’s written consent: (i) the failure by the Company or any subsidiary to
pay the Employee any material amounts of base salary, bonus or other amounts due
the Employee or the failure to provide the Employee with any material amounts of
any vested accrued benefits to which the Employee is entitled under the terms of
any employee benefit plan of the Company or any subsidiary; (ii) a material
reduction in the Employee’s authority, duties or responsibilities as previously
in effect, which shall not include: (A) any change in the title of the Employee,
in the persons or groups of persons who report to the Employee, or in the scope
of the Employee’s authority, duties or responsibilities, as long as, if prior to
any such event the Employee is an “executive officer” of the Company within the
meaning of Rule 3b-7 of the Securities Exchange Act, then the Employee remains
an “executive officer” in connection with such event, or (B) any change in the
person or group of persons to whom the Employee reports unless the Employee
reports directly to the Board, in which case any requirement that the Employee
report to any person or group of persons other than the Board will constitute
such a material reduction and; (iii) a material reduction in the rate of the
Employee’s annualized base salary previously in effect, or a material decrease
in the Employee’s annual bonus opportunity previously in effect; or (iv) the
Company requiring the Employee’s primary services to be rendered at a place
other than (i) Toano, Virginia, (ii) Richmond, Virginia or (iii) within a
seventy-five (75)-mile radius of either, except for reasonable travel. The
Employee must give the Company written notice of any event or condition that
would constitute Good Reason within thirty (30) days of the event or condition
which would constitute Good Reason, and upon receipt of such notice the Company
shall have thirty (30) days to remedy such event or condition. If such event or
condition is not remedied within such thirty (30)-day period, any termination of
the Employee’s employment by the Employee for Good Reason must occur within
thirty (30) days after the period for the Company to remedy the event or
condition has expired. Notwithstanding any other provision of this Agreement,
the Company’s failure to renew the Term of this Agreement as set forth in
Section 1.2 shall not constitute “Good Reason” for purposes of this Agreement.

 

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(g)Incumbent Board Member. Incumbent Board Member means any individual who
either is (i) a member of the Board as of the effective date of this Agreement
or (ii) a member who becomes a member of the Board after the effective date of
this Agreement whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least sixty percent (60%) of the then
Incumbent Board Members (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as nominee for director,
without objection to such nomination), but excluding, for this purpose, any
individual whose initial assumption of office occurs as the result of an actual
or threatened election contest (within the meaning of Rule 14a-11 of the
Securities Exchange Act) with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on behalf
of any person other than the Board.

 

(h)Pre-Existing Agreement. Pre-Existing Agreement means any employment,
termination, change in control or other agreement, plan, policy or arrangement
or offer letter or similar writing, other than this Agreement, in effect as of
the date hereof, under which the Employee is entitled to receive (i) severance,
salary continuation or other compensation, (ii) continued coverage under any
benefit plan, policy or arrangement, and/or (iii) accelerated vesting of equity
or equity-based awards, if the employment of the Employee is terminated (x) by
the Company other than for Cause or (y) by the Employee for Good Reason.

 

1.2           This Agreement is effective as of the date set forth above and
will continue through December 31, 2021, unless terminated or extended as
hereinafter provided. This Agreement will be extended for successive one-year
periods following the original term (and through each subsequent anniversary
thereof) unless (i) with respect to the term ending December 31, 2021, either
party notifies the other in writing prior to January 1, 2021, that the Agreement
shall not be extended beyond such term or (ii) with respect to a one-year
renewal term, either party notifies the other in writing prior to the
commencement of such term that the Agreement shall not be extended beyond the
end of such term. The term of this Agreement, including any renewal term, is
referred to herein as the “Term.” Notwithstanding the foregoing, the Term shall
be extended automatically so that the Term will continue in full force and
effect, and will not expire, during any Change in Control Period. In the event
the Term otherwise would have expired during any Change in Control Period absent
the foregoing sentence, the Term shall continue in full force and effect until
the expiration of the Change in Control Period.

 

1.3           If the Employee’s employment is terminated during the Term (a) by
the Company other than for Cause or (b) by the Employee for Good Reason, then,
subject to Section 3.8 below and the Company’s receipt from the Employee of the
Confidential Waiver and Release Agreement described in Section 1.8 below, (i) an
amount equal to the Employee’s Annual Base Salary, less applicable withholdings,
shall be paid by the Company to the Employee in the form of salary continuation
in accordance with the Company’s normal payroll practices (no less frequently
than monthly) for the twelve (12) months beginning on the date of termination of
the Employee’s employment; (ii) any accrued and unpaid bonus under the Company’s
bonus plan in which Employee participated for any prior completed fiscal year
will be paid by the Company to the Employee in a single lump sum, less
applicable withholdings, on the date such annual bonus would have been paid to
the Employee had the Employee continued employment with the Company; (iii) the
greater of the target bonus or the actual bonus for the year the Employee
terminates employment (in either case pro-rated based on the number of days the
Employee remained employed with the Company during the year of termination)
under the Company’s bonus plan in which the Employee participated for such
fiscal year will be paid by the Company to the Employee in a single lump sum,
less applicable withholdings, on the date such annual bonus would have been paid
to the Employee had the Employee continued employment with the Company, and (iv)
any and all other amounts that the Employee is entitled to receive upon
termination of the Employee’s employment under any Company policy, plan or other
arrangement (including, without limitation, the Company’s vacation policy) shall
be paid by the Company to the Employee pursuant to the terms of such Company
policy, plan or other arrangement.

 

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Subject to Section 3.8 below and the receipt of the Confidential Waiver and
Release Agreement as described in Section 1.8 below, upon termination of the
Employee’s employment entitling the Employee to the payments set forth in this
Section 1.3 above, the Company also shall maintain in full force and effect for
twelve (12) months after the Employee terminates employment, for the continued
benefit of the Employee, medical insurance (including coverage for the
Employee’s dependents to the extent dependent coverage is provided by the
Company for its employees generally) under such medical insurance plans and
programs in which the Employee (and his dependents) participated immediately
prior to the date of such termination of employment, and, during such period,
the Company will pay each month the portion, if any, of such medical insurance
premiums that the Company pays for its active Employees, and the Employee shall
pay any remaining amounts.

 

Notwithstanding the foregoing, however, (a) in the event the Employee’s
participation in any such medical insurance is not permitted for any reason at
the time the Company is required to maintain such coverage, then the Company
shall have the option to (i) arrange to provide the Employee with such benefits
on the same relative basis for such period substantially similar to those which
the Employee would otherwise have been entitled to receive under such plans and
programs from which his continued participation is not permitted or (ii) pay to
the Employee cash, in lieu of such continued coverage, in an amount equal to the
same relative percentage of the medical insurance premiums for such continuing
comparable coverage, with any such cash payments to be made in accordance with
the ordinary payroll practice of the Company (not less frequently than monthly)
as of the last day of each month for which such cash payments are to be made.
Notwithstanding the foregoing, the Employee’s termination of employment shall
constitute a “qualifying event” under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), so that the Employee shall be
entitled to full rights to continued medical insurance coverage as provided
under COBRA, if so eligible, immediately upon the termination of the Employee’s
employment. Notwithstanding the foregoing, the coverage or reimbursements for
coverage provided under this Section 1.3 shall cease if the Employee and/or the
Employee’s dependents become covered under an employee welfare benefit plan of
another employer of the Employee that provides the same or similar type of
benefits for comparable cost or the Company terminates the medical insurance
entirely for all similar participants.

 

1.4           If the Employee’s employment is terminated during the Term and
during any Change in Control Period (a) by the Company other than for Cause or
(b) by the Employee for Good Reason, then, subject to Section 3.8 below and the
Company’s receipt from the Employee of the Confidential Waiver and Release
Agreement described in Section 1.8 below, and provided the relevant Change in
Control occurs, in addition to the amounts set forth in Section 1.3 above, an
amount equal to the product of one and one-half (1.5) times the Employee’s
Annual Base Salary, less the aggregate amount of salary continuation payable to
the Employee under Section 1.3 above at the time of termination of the
Employee’s employment, less applicable withholdings, shall be paid by the
Company to the Employee in the form of salary continuation in accordance with
the Company’s normal payroll practices (no less frequently than monthly) for the
six (6) months beginning twelve (12) months after the date of termination of the
Employee’s employment.

 

Subject to Section 3.8 below and the receipt of the Confidential Waiver and
Release Agreement as described in Section 1.8 below, upon termination of the
Employee’s employment entitling the Employee to the payments set forth in
Section 1.4 above, the Company also shall maintain in full force and effect for
no less than the six (6) months beginning twelve (12) months after the date of
termination of the Employee’s employment, for the continued benefit of the
Employee, medical insurance (including coverage for the Employee’s dependents to
the extent dependent coverage is provided by the Company for its employees
generally) under such medical insurance plans and programs in which the Employee
(and his dependents) participated immediately prior to the date of such
termination of employment, and, during such period, the Company will pay each
month the portion, if any, of such medical insurance premiums that the Company
pays for its active Employees, and the Employee shall pay any remaining amounts.

 

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Notwithstanding the foregoing, however, (a) in the event the Employee’s
participation in any such medical insurance is not permitted for any reason at
the time the Company is required to maintain such coverage, then the Company
shall have the option to (i) arrange to provide the Employee with such benefits
on the same relative basis for such period substantially similar to those which
the Employee would otherwise have been entitled to receive under such plans and
programs from which his continued participation is not permitted or (ii) pay to
the Employee cash, in lieu of such continued coverage, in an amount equal to the
same relative percentage of the medical insurance premiums for such continuing
comparable coverage, with any such cash payments to be made in accordance with
the ordinary payroll practice of the Company (not less frequently than monthly)
as of the last day of each month for which such cash payments are to be made.
Notwithstanding the foregoing, the Employee’s termination of employment shall
constitute a “qualifying event” under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), so that the Employee shall be
entitled to full rights to continued medical insurance coverage as provided
under COBRA, if so eligible, immediately upon the termination of the Employee’s
employment. Notwithstanding the foregoing, the coverage or reimbursements for
coverage provided under this Section 1.4 shall cease if the Employee and/or the
Employee’s dependents become covered under an employee welfare benefit plan of
another employer of the Employee that provides the same or similar type of
benefits for comparable cost or the Company terminates the medical insurance
entirely for all similar participants.

 

Upon termination of the Employee’s employment entitling the Employee to the
payments set forth in Section 1.4 above, the Employee will become vested in any
and all unvested stock options, stock appreciation rights, restricted stock,
restricted stock units and other equity awards previously granted to the
Employee by the Company or any of its subsidiaries (at target to the extent
vesting but for this provision would be based on the achievement of performance
conditions other than continued employment or service), as of the later of (a)
the date of the Change in Control or (b) the date the Confidential Waiver and
Release Agreement as described in Section 1.8 below becomes effective and
irrevocable. The Employee may exercise such equity awards only at the times and
in the methods described in such equity awards, except that the Employee’s stock
options and stock appreciation rights, if any, shall remain outstanding and may
be exercised, to the extent vested, until the earlier of (i) the original
expiration date of such options or stock appreciation rights (disregarding any
earlier termination provided in the award agreement or otherwise based on the
termination of the Employee’s employment) or (ii) the one-year anniversary of
the later of (A) the date the Employee terminates employment or (B) the date the
option or stock appreciation right becomes vested and exercisable.
Notwithstanding the foregoing, this portion of Section 1.4 shall not apply to
any of the Employee’s stock options, stock appreciation rights, restricted
stock, restricted stock units or other equity awards if the terms of the
particular plan or agreement under which such award is granted specifically
provides that this provision shall not apply to such award.

 

1.5           Notwithstanding the foregoing, the Employee shall not be entitled
to receive, and the Company will not be obligated to pay or provide, the
compensation set forth in Sections 1.3 and 1.4 hereof, the continued coverage at
active employee rates set forth in Sections 1.3 and 1.4 hereof or the
accelerated vesting or other benefits set forth in Section 1.4 hereof, if the
Employee’s employment (i) terminates upon the Employee’s death or Disability,
(ii) is terminated by the Company for Cause or by the Employee without Good
Reason, (iii) in case of Section 1.4, terminates outside of the Change in
Control Period or (iv) terminates but the Employee continues, or has agreed to
continue, employment with the successor (whether direct or indirect, by
purchase, merger, consolidation, share exchange or otherwise) to the business
and/or assets of the Company after the Change in Control. “Disability” shall
mean a physical or mental infirmity that prevents the performance on a full-time
basis of all or substantially all of the Employee’s employment-related duties,
with or without accommodation, lasting either for a period of ninety (90)
consecutive days or for a period of more than ninety (90) days in any rolling
one hundred eighty (180)-day period. Additionally, notwithstanding any other
provision hereof, nothing herein shall require the Company to maintain any
particular benefit or benefit plan, and to the extent the Company amends or
terminates any such benefit plan with respect to participants generally,
Employee shall be subject to the same extent and the Company shall not be
required to provide to Employee any such benefit or any substitute consideration
therefore.

 

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1.6           If any payment or benefit by the Company or any subsidiary to or
for the benefit of the Employee, whether paid or payable or provided or to be
provided pursuant to the terms of this Agreement or otherwise pursuant to or by
reason of any other agreement, policy, plan, program or arrangement, including
without limitation any stock option, stock appreciation right or similar right
or equity award, or the lapse or termination of any restriction on or the
vesting or exercisability of any of the foregoing (a “Payment”), would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the “Code”) or to any similar tax imposed by state or local
law, or any interest or penalties with respect to such tax (such tax or taxes,
together with any such interest and penalties, being hereafter collectively
referred to as the “Excise Tax”), then the payments and benefits to be provided
under this Agreement (or the other Payments as described above) shall be reduced
(but not in excess of the amount of the payments or benefits to be provided
under this Agreement or the other Payments as described above) if, and only to
the extent that, such reduction will allow the Employee to receive a greater Net
After Tax Amount than such Employee would receive absent such reduction.

 

If the Company and the Employee cannot agree on the calculations necessary to
execute the terms set forth in this Section 1.6, then such calculations will be
made by an Accounting Firm (as defined below). In such event, the Accounting
Firm will first determine the amount of any Parachute Payments (as defined
below) that are payable to the Employee. The Accounting Firm also will determine
the Net After Tax Amount attributable to the Employee’s total Parachute
Payments. The Accounting Firm will next determine the largest amount of payments
that may be made to the Employee without subjecting the Employee to the Excise
Tax (the “Capped Payments”). Thereafter, the Accounting Firm will determine the
Net After Tax Amount attributable to the Capped Payments. The Employee then will
receive the total Parachute Payments or the total Capped Payments, whichever
provides the Employee with the higher Net After Tax Amount; however, if the
reductions imposed under this Section 1.6 are in excess of the amount of
payments or benefits to be provided, then the total Parachute Payments will be
adjusted by first reducing, on a pro rata basis, the amount of any noncash
benefits under this Agreement, then any noncash benefits under any other plan,
agreement or arrangement, then any cash payments under this Agreement and
finally any cash payments under any other plan, agreement or arrangement. The
Accounting Firm will notify the Employee and the Company if it determines that
the Parachute Payments must be reduced and will send the Employee and the
Company a copy of its detailed calculations supporting that determination.

 

As a result of the uncertainty in the application of Code Sections 280G and 4999
at the time that determinations under this Section 1.6 are made, it is possible
that the Employee will have received Parachute Payments or Capped Payments in
excess of the amount that should have been paid or provided (“Overpayments”), or
that additional Parachute Payments or Capped Payments should be paid or provided
to the Employee (“Underpayments”). If the parties agree on an Overpayment or, in
the absence of such agreement, the Accounting Firm determines, based on either
the assertion of a deficiency by the Internal Revenue Service against the
Company or the Employee, which assertion the parties or the Accounting Firm, as
the case may be, believes has a high probability of success, or controlling
precedent or substantial authority, that an Overpayment has been made, that
Overpayment will be treated for all purposes as a loan ab initio that the
Employee must repay to the Company immediately together with interest at the
applicable Federal rate under Code Section 7872; provided, however, that no loan
will be deemed to have been made and no amount will be payable by the Employee
to the Company unless, and then only to the extent that, the deemed loan and
payment would either reduce the amount on which the Employee is subject to tax
under Code Section 4999 or generate a refund of tax imposed under Code
Section 4999 and the Employee will receive a greater Net After Tax Amount than
such Employee would otherwise receive. If the parties agree on an Underpayment
or, in the absence of such agreement, the Accounting Firm determines, based upon
controlling precedent or substantial authority, that an Underpayment has
occurred, upon which event the Accounting Firm will notify the Employee and the
Company of that determination, the amount of that Underpayment will be paid to
the Employee by the Company promptly after such determination.

 

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For purposes of this Section 1.6, the following terms shall have their
respective meanings:

 

(a)“Accounting Firm” means the independent accounting firm currently engaged by
the Company, or a mutually agreed upon independent accounting firm if requested
by the Employee; and

 

(b)“Net After Tax Amount” means the amount of any Parachute Payments or Capped
Payments, as applicable, net of taxes imposed under Code Sections 1, 3101(b) and
4999 and any State or local income taxes applicable to the Employee on the date
of payment. The determination of the Net After Tax Amount shall be made using
the highest combined effective rate imposed by the foregoing taxes on income of
the same character as the Parachute Payments or Capped Payments, as applicable,
in effect on the date of payment.

 

(c)“Parachute Payment” means a payment that is described in Code
Section 280G(b)(2), determined in accordance with Code Section 280G and the
regulations promulgated or proposed thereunder.

 

The fees and expenses of the Accounting Firm for its services in connection with
the determinations and calculations contemplated by the preceding subsections
shall be borne by the Company. The Company and the Employee shall each provide
the Accounting Firm access to and copies of any books, records and documents in
the possession of the Company or the Employee, as the case may be, reasonably
requested by the Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the determinations and
calculations contemplated by the preceding subsections. Any determination by the
Accounting Firm shall be binding upon the Company and the Employee.

 

1.7           The parties hereby consent and agree that (i) all disputes between
the parties, including those relating to the existence and validity of this
Agreement and any dispute as to the arbitrability of a matter under this
provision, shall be submitted to full and binding arbitration in the
Commonwealth of Virginia, before a panel of three arbitrators and administered
by the American Arbitration Association (“AAA”) under its Employment Arbitration
Rules and Mediation Procedures, provided, however, that this provision shall not
require arbitration of any claim which, by law, cannot be the subject of a
compulsory arbitration agreement, (ii) notwithstanding the foregoing, each party
irrevocably submits to the jurisdiction of any Commonwealth of Virginia State or
Federal court in any action or proceeding provided for under this Section 1.7 to
enforce the provisions of this Agreement or with respect to enforcement of any
judgment upon the award rendered by the arbitrators, and hereby waives the
defense of inconvenient forum to the maintenance of any such action or
proceeding, (iii) either party may elect to invoke the Optional Rules for
Emergency Measures of Protection provided under the AAA’s Employment Arbitration
Rules and Mediation Procedures, (iv) judgment upon the award rendered by the
arbitrators may be entered by any court having jurisdiction thereof, (v) except
as otherwise required by applicable law to render this Section 1.7 fully
enforceable, each party shall be responsible for its own costs and expenses
(including attorneys’ fees) of any arbitration pursuant to this Section 1.7;
provided, that if the Employee prevails on any dispute covered by this
provision, then the Company shall reimburse the Employee for the Employee’s
reasonable attorneys’ fees and legal expenses no later than thirty (30) days
following any final resolution of such dispute, and (vi) each party has
knowingly and voluntarily agreed to enter into this arbitration clause and
hereby waives any rights that might otherwise exist with respect to resolution
of disputes between them, including with respect to the right to request a jury
trial or other court proceeding.

 

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1.8           As a condition to the receipt of any compensation and other
benefits pursuant to this Agreement, the Employee must submit a signed
Confidential Waiver and Release Agreement, in a form reasonably satisfactory to
the Company and at a minimum substantially in the form attached as Appendix A,
within forty-five (45) days of the termination of the Employee’s employment and
not revoke same within the seven (7) days immediately following the Employee’s
execution of same. Notwithstanding any other provision of this Agreement to the
contrary, (i) any payments to be made, or benefits to be provided, under
Sections 1.3 and 1.4 of this Agreement (other than the payments required to be
made by the Company pursuant to Section 1.3(iv) above), within the sixty (60)
days after the date the Employee’s employment terminates, shall be accumulated
and paid in a lump sum, or as to benefits continued at Employee’s expense
subject to reimbursement to be made, on the first pay period occurring more than
sixty (60) days after the date the Employee terminates employment (and no later
than ninety (90) days after the date the Employee terminates employment), and
(ii) the accelerated vesting of equity awards as set forth in Section 1.4 above
shall not be effective any earlier than the date the Confidential Waiver and
Release Agreement is effective and irrevocable, provided in each case Executive
delivers the signed Confidential Waiver and Release Agreement to Company and the
revocation period thereunder expires without Executive having elected to revoke
the Confidential Waiver and Release Agreement.

 

2.COVENANTS

 

2.1           The Employee agrees and acknowledges that Lumber Liquidators,
Inc., a wholly-owned subsidiary of the Company (“Lumber Liquidators”), and the
Employee, contemporaneously with the execution of this Agreement, have entered
into the Confidentiality, Non-Solicitation and Non-Competition Agreement, dated
as of the date hereof (the “Non-Compete Agreement”), a copy of which is attached
hereto as Appendix B, pursuant to which the Employee has agreed to comply with
certain confidentiality, non-solicitation, non-competition and other restrictive
covenants as set forth therein. The Employee agrees that the Employee would not
be entitled to receive the payments and benefits of this Agreement had the
Employee not become a party to the Non-Compete Agreement. Additionally, the
Employee agrees, acknowledges and affirms that the Non-Compete Agreement remains
in full force and effect and is not merged, superseded or otherwise affected by
this Agreement in any way that would be adverse to the rights of the Company
and/or Lumber Liquidators. The Employee also agrees that the covenants,
prohibitions and restrictions contained in the Non-Compete Agreement are in
addition to, and not in lieu of, any rights or remedies that the Company may
have under this Agreement or the laws of any applicable jurisdiction, or at
common law or equity, and the enforcement or non-enforcement by the Company of
its rights and remedies pursuant to this Agreement shall not be construed as a
waiver of any rights or other remedies that Lumber Liquidators may possess under
the Non-Compete Agreement. The Employee also agrees that, if the Employee is
entitled to receive salary continuation payments under Sections 1.3 and/or 1.4
above, the Non-Compete Agreement will be amended and supplemented prior to the
termination of the Employee’s employment, as is reasonably satisfactory to the
Company and at a minimum substantially as described in the Confidential Waiver
and Release Agreement.

 

 9 

 

 

2.2           The Employee acknowledges and agrees that the Company, Lumber
Liquidators and their subsidiaries and affiliates have a legitimate business
interest in preventing Employee from engaging in the activities described in the
Non-Compete Agreement and that any breach of the Non-Compete Agreement would
constitute a material breach of this Agreement.

 

2.3           The Employee further agrees and promises that the Employee will
not engage in, or induce other persons or entities to engage in, any harassing
or disparaging conduct or negative or derogatory statements directed at or about
the Company or its subsidiaries, the activities of the Company and/or its
subsidiaries or any of the persons or entities covered under the Confidential
Waiver and Release Agreement described above, at any time (whether during the
Term or thereafter). Notwithstanding the foregoing, this Section 2.3 may not be
used to penalize the Employee for providing truthful testimony under oath in a
judicial or administrative proceeding or complying with an order of a court or
government agency of competent jurisdiction.

 

2.4           Notwithstanding any other provision of this Agreement, the Company
and the Employee acknowledge and agree that nothing in this Agreement or the
Non-Compete Agreement shall prohibit the Employee from reporting possible
violations of Federal, State or other law or regulations to, or filing a charge
or other complaint with, any governmental agency or entity, including but not
limited to the Department of Justice, the Equal Employment Opportunity
Commission, the National Labor Relations Board, the Occupational Safety and
Health Administration, the Securities and Exchange Commission, Congress, and any
Inspector General, or making any other disclosures that are protected under any
whistleblower provisions of Federal, State or other law or regulation or
assisting in any such investigation or proceeding. The Employee further
acknowledges that nothing herein or in the Non-Compete Agreement limits the
Employee’s ability to communicate with any such governmental agency or entity or
otherwise participate in any such investigation or proceeding that may be
conducted by any such governmental agency or entity, including providing
documents or other information, without notice to the Company. The Employee does
not need the prior authorization of the Company or Lumber Liquidators to make
any such reports or disclosures, and the Employee is not required to notify the
Company or Lumber Liquidators that the Employee made any such reports or
disclosures or is assisting in any such investigation. Additionally, the
Employee (i) does not waive any rights to any individual monetary recovery or
other awards in connection with reporting any such information to any such
governmental agency or entity, (ii) does not breach any confidentiality or other
provision hereunder in connection with any such reporting or disclosures, and
(ii) will not be prohibited from receiving any amounts hereunder as the result
of making any such reports or disclosures or assisting with any such
investigation or proceeding.

 

2.5           In the event the Employee breaches any of the covenants set forth
in this Section 2 or in the Non-Compete Agreement (as amended by the
Confidential Waiver and Release Agreement), the Employee waives and forfeits any
and all rights to any further payments or benefits under Sections 1.3 and/or 1.4
above and under any outstanding awards with respect to which the accelerated
vesting or other benefits under Section 1.4 applied, and the Employee agrees to
repay to the Company (a) an amount that equals the gross amount (before taxes)
of any payments previously paid to, or on behalf of, the Employee under Sections
1.3 and/or 1.4 above and (b) any shares of Common Stock the Employee then owns
as the result of the accelerated vesting under Section 1.4 and all gross amounts
realized as the result of the sale of any shares of Common Stock the Employee
previously owned as the result of the accelerated vesting under Section 1.4.

 

2.6           Notwithstanding any other provision of this Agreement, all
payments and benefits that may be provided to the Employee under this Agreement
shall be subject to (i) applicable laws regarding recoupment of compensation and
(ii) the terms of any recoupment policy of the Company currently in effect or as
subsequently established or amended by the Board of Directors of the Company
and/or the Compensation Committee of the Board of Directors of the Company,
including without limitation any such policy intended to implement Section 304
of the Sarbanes-Oxley Act of 2002, as amended, or Section 10D of the Securities
Exchange Act.

 

 10 

 

 

3.MISCELLANEOUS

 

3.1           The Employee shall have no right to receive any payment hereunder
except as determined pursuant to Sections 1.3 or 1.4 hereof. Nothing contained
in this Agreement shall confer upon the Employee any right to continued
employment by the Company or shall interfere in any way with the right of the
Company to terminate his employment at any time for any/or no reason. The
provisions of this Agreement shall not affect in any way the right or power of
the Company to change its business structure or to effect a merger,
consolidation, share exchange or similar transaction, or to dissolve or
liquidate, or sell or transfer all or part of its business or assets.

 

3.2           The Employee understands that his obligations under this Agreement
and the Non-Compete Agreement will continue whether or not his employment with
the Company is terminated voluntarily or involuntarily, or with or without
cause. To the extent necessary to give effect to such provisions, the provisions
of this Agreement, and the provisions of the Non-Compete Agreement, which are
incorporated herein by this reference, shall survive the termination hereof,
whether such termination shall be by termination of the Employee’s employment by
the Company or by the Employee, voluntary or involuntary, with or without Cause
and whether or not on account of Disability.

 

3.3           This Agreement may not be amended other than by a written
agreement signed by the Employee and a Company officer.

 

3.4           The Employee agrees that the Company’s waiver of any default by
the Employer shall not constitute a waiver of its rights under this Agreement
with respect to any subsequent default by the Employee. No waiver of any
provision of this Agreement shall be valid unless in writing and signed by all
parties.

 

3.5           This Agreement shall be binding upon, and inure to the benefit of,
the Employee and the Company and their respective permitted successors and
assigns. Neither this Agreement nor any right or interest hereunder shall be
assignable by the Employee, his beneficiaries, or legal representatives without
the Company’s prior written consent.

 

3.6           Where appropriate as used in this Plan, the masculine shall
include the feminine.

 

3.7           This Agreement has been executed and delivered in the Commonwealth
of Virginia, and the laws of the Commonwealth of Virginia shall govern its
validity, interpretation, performance and enforcement.

 

 11 

 

 

3.8           It is intended that any payment or benefit which is provided
pursuant to this Agreement and which is considered to be deferred compensation
subject to Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) shall be paid and provided in a manner, and at such time, as complies
with the applicable requirements of Section 409A of the Code to avoid the
unfavorable tax consequences provided therein for noncompliance. Neither the
Company nor the Employee shall take any action to accelerate or delay the
payment of any monies and/or provision of any benefits under this Agreement in
any manner that would not be in compliance with Section 409A of the Code. For
purposes of this Agreement, all rights to payments and benefits hereunder shall
be treated as rights to receive a series of separate payments and benefits to
the fullest extent allowed by Section 409A of the Code. For purposes of
determining the time of (but not entitlement to) payment or provision of
deferred compensation under this Agreement under Section 409A of the Code in
connection with a termination of employment, termination of employment will be
read to mean a “separation from service” within the meaning of Section 409A of
the Code. If the Employee is a key employee (as defined in Section 416(i) of the
Code without regard to paragraph (5) thereof) and any of the Company’s Stock is
publicly traded on an established securities market or otherwise, then payment
of any amount or provision of any benefit under this Agreement which is
considered deferred compensation subject to Section 409A of the Code shall be
deferred for six (6) months after termination of the Employee’s employment or,
if earlier, the Employee’s death, as required by Section 409A(a)(2)(B)(i) of the
Code (the “409A Deferral Period”). In the event such payments are otherwise due
to be made in installments or periodically during the 409A Deferral Period, the
payments which would otherwise have been made in the 409A Deferral Period shall
be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends,
and the balance of the payments shall be made as otherwise scheduled. In the
event benefits are required to be deferred, any such benefit may be provided
during the 409A Deferral Period at the Employee’s expense, with the Employee
having a right to reimbursement from the Company once the 409A Deferral Period
ends, and the balance of the benefits shall be provided as otherwise scheduled.
Notwithstanding any other provision of this Agreement, the Company shall not be
liable to the Employee if any payment or benefit which is provided pursuant to
this Agreement and which is considered to be deferred compensation and subject
to Section 409A of the Code otherwise fails to comply with, or be exempt from,
the requirements of Section 409A of the Code.

 

3.9           This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

 

3.10         Any payments provided for herein shall be reduced by any amounts
required to be withheld by the Company under applicable federal, state or local
income or employment tax laws or similar statutes to other provisions of law
then effect. The Employee agrees and acknowledges that the determination of the
Employee’s tax liability with respect to compensation and benefits under this
Agreement is between the Employee and the relevant taxing authority, and the
Company shall not have any liability or responsibility for the payment of any
such taxes owed by the Employee, including without limitation any related
interest and/or penalties.

 

3.11         Any notice required or desired to be delivered under this Agreement
shall be in writing and shall be delivered personally, by courier service, or by
registered mail, return receipt requested and shall be effective upon actual
receipt by the party to which such notice shall be directed, and shall be
addressed as follows (or to such other address as the party entitled to notice
shall hereafter designate in accordance with the terms hereof):

 

If to the Company:

 

Lumber Liquidators Holdings, Inc.

300 John Deere Road

Toano, Virginia 23168

Attn: Chief Legal Officer

Telephone: 757-259-4280

 

  If to Employee:         Martin Agard     ______________________________    
______________________________           Telephone:________________________

  

 12 

 

 

3.12         This Agreement contains the entire agreement between the Company
and the Employee with respect to the subject matter hereof and, from and after
the date hereof, this Agreement shall supersede any other agreement, written or
oral, between the parties relating to the subject matter of this Agreement,
including but not limited to any Pre-Existing Agreement, any plan, policy or
other arrangement of the Company or any subsidiary that provides for the payment
of severance, salary continuation or similar benefits, and any prior
discussions, understanding or agreements between the Company and the Employee,
written or oral, at any time. The Company and the Employee agree that the
Pre-Existing Agreement and all such other plans, policies and arrangements
providing for severance, salary continuation or similar benefits are null and
void and superseded by this Agreement, and neither party has any further rights
or obligations under any Pre-Existing Agreement or any such other plans,
policies and arrangements providing for severance, salary continuation or
similar benefits.

 

[SIGNATURES CONTINUED NEXT PAGE]

 

 13 

 

 

IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto
effective as of the day and year first above stated.

 

  LUMBER LIQUIDATORS HOLDINGS, INC.         By: /s/ Martin F. Roper        
Name:  Martin F. Roper   Title: Chairman of the Compensation Committee        
EMPLOYEE:         /s/ Martin Agard   Martin Agard

 

 14 

 

 

Appendix A

Severance Agreement

Confidential Waiver and Release Agreement

 

CONFIDENTIAL WAIVER AND RELEASE AGREEMENT

 

RELEASE AGREEMENT (this “Release Agreement”), dated as of _____________, between
Lumber Liquidators Holdings, Inc. (the “Company”), and Martin Agard (the
“Employee”).

 

1.          Termination of Employment. The Employee acknowledges that his
employment with the Company and its subsidiaries and affiliated entities
terminated effective as of _____________ __, 20__ (the “Termination Date”) and
his role and responsibilities as Chief Financial Officer terminated as of the
Termination Date. Subject to the terms of this Release Agreement, the Employee
shall be paid, offered, and provided compensation and benefits at the Employee’s
current rates and amounts through the Termination Date.

 

2.          Release.

 

a.           In consideration of the payments and benefits set forth in Section
1 of the Severance Agreement between the Company and the Employee dated as of
_________ __, 2018 (the “Severance Agreement”), the Employee, on behalf of
himself and his heirs, executors, successors and assigns, knowingly and
voluntarily releases, remises, and forever discharges the Company and its
parents, subsidiaries and affiliates, together with each of their current and
former principals, officers, directors, shareholders, agents, representatives
and employees, and each of their heirs, executors, successors and assigns
(collectively, the “Releasees”), from any and all debts, demands, actions,
causes of actions, accounts, covenants, contracts, agreements, claims, damages,
omissions, promises, and any and all claims and liabilities whatsoever, of every
name and nature, known or unknown, suspected or unsuspected, both in law and
equity (“Claims”), which the Employee ever had, now has, or may hereafter claim
to have against the Releasees by reason of any matter, cause or thing whatsoever
arising from the beginning of time to the time he signs this Release Agreement
(the “General Release”). This General Release of Claims shall apply to any Claim
of any type, including, without limitation, any and all Claims of any type that
the Employee may have arising under the common law, under Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act of 1967, the Older Workers Benefit Protection Act, the Americans
With Disabilities Act of 1967, the Family and Medical Leave Act of 1993, the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”), the
Sarbanes-Oxley Act of 2002, each as amended, and any other federal, state or
local statutes, regulations, ordinances or common law, or under any policy,
agreement, contract, understanding or promise, written or oral, formal or
informal, between any of the Releasees and the Employee, including but not
limited to the Severance Agreement, and shall further apply, without limitation,
to any and all Claims in connection with, related to or arising out of the
Employee’s employment relationship, or the termination of his employment, with
the Company.

 

b.           Except as provided in Sections 1.3 and 1.4 of the Severance
Agreement, the Employee acknowledges and agrees that the Company has fully
satisfied any and all obligations owed to him arising out of his employment with
the Company, and no further sums are owed to him by the Company or by any of the
other Releasees at any time.

 

c.           The Employee represents and warrants to the Company that he has
fully disclosed any and all matters of interest to the Company’s ___________,
including, but not limited to, those which (A) could reasonably likely have an
adverse effect on the Company’s reputation, financial condition, operations, or
liquidity and (B) should be disclosed under the Company’s Code of Business
Conduct and Ethics. The Employee also hereby confirms that all prior
acknowledgements, certifications or other representations made by the Employee
prior to the Termination Date remain true, complete and accurate as of the
Termination Date and covenants and agrees to immediately notify the Company’s
___________ of any circumstance or situation which may give rise to a change in
those statements.

 

 A-1 

 

 

d.           Nothing in this Paragraph 1 shall be deemed to release (i) the
Employee’s right to enforce the terms of this Release Agreement, (ii) the
Employee’s rights, if any, to any vested accrued benefits as of the Employee’s
last day of employment with the Company under any plans of the Company which are
subject to ERISA and in which the Employee participated, (iii) any claim that
cannot be waived under applicable law, including any rights to workers’
compensation or unemployment insurance or (iv) the Employee’s rights, if any,
for indemnification under any agreement or governing document of the Company
with respect to the Employee’s service as an officer or director of any of the
Releasees.

 

e.           To the fullest extent allowed by law, the Employee promises never
to file a lawsuit asserting any claims that are released in this Section 2. In
the event Employee breaches this Section 2(e), the Employee shall pay to the
Company all of its expenses incurred as a result of such breach, including but
not limited to, reasonable attorneys’ fees and expenses. Notwithstanding the
foregoing, the parties acknowledge and agree that this Section 2(e) shall not be
construed to prohibit the exercise of any rights by the Employee that the
Employee may not waive or forego as a matter of law.

 

3.          Consultation with Attorney; Voluntary Agreement. The Company advises
the Employee to consult with an attorney of his choosing prior to signing this
Release Agreement. The Employee understands and agrees that he has the right and
has been given the opportunity to review this Release Agreement and,
specifically, the General Release in Paragraph 2 above, with an attorney. The
Employee also understands and agrees that he is under no obligation to consent
to the General Release set forth in Paragraph 2 above. The Employee acknowledges
and agrees that the payments and benefits set forth in Section 1.3 and 1.4 of
the Severance Agreement are sufficient consideration to require him to abide
with his obligations under this Release Agreement, including but not limited to
the General Release set forth in Paragraph 2. The Employee represents that he
has read this Release Agreement, including the General Release set forth in
Paragraph 2 and understands its terms and that he enters into this Release
Agreement freely, voluntarily, and without coercion.

 

4.          Effective Date; Revocation. The Employee acknowledges and represents
that he has been given at least forty-five (45) days during which to review and
consider the provisions of this Release Agreement and, specifically, the General
Release set forth in Paragraph 2 above, although he may sign and return it
sooner if he so desires. The Employee further acknowledges and represents that
he has been advised by the Company that he has the right to revoke this Release
Agreement for a period of seven (7) days after signing it. The Employee
acknowledges and agrees that, if he wishes to revoke this Release Agreement, he
must do so in a writing, signed by him and received by the Company no later than
5:00 p.m. Eastern Time on the seventh (7th) day of the revocation period. If no
such revocation occurs, the General Release and this Release Agreement shall
become effective on the eighth (8th) day following his execution of this Release
Agreement (the “Release Effective Date”). The Employee further acknowledges and
agrees that, in the event that he revokes this Release Agreement, it shall have
no force or effect, and he shall have no right to receive any of the payments or
benefits pursuant to Sections 1.2 or 1.3 of the Severance Agreement.

 

5.          Severability. In the event that any one or more of the provisions of
this Release Agreement shall be held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remainder of the Release
Agreement shall not in any way be affected or impaired thereby.

 

6.          Waiver. No waiver by either party of any breach by the other party
of any condition or provision of this Release Agreement to be performed by such
other party shall be deemed a waiver of any other provision or condition at the
time or at any prior or subsequent time. This Release Agreement and the
provisions contained in it shall not be construed or interpreted for or against
either party because that party drafted or caused that party’s legal
representative to draft any of its provisions.

 

 A-2 

 

 

7.          Governing Law. This Release Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Virginia, without reference to its choice of law rules.

 

8.          Disputes. The parties hereby consent and agree that (i) all disputes
between the parties, including those relating to the existence and validity of
this Release Agreement and any dispute as to the arbitrability of a matter under
this provision, shall be submitted to full and binding arbitration in the
Commonwealth of Virginia, before a panel of three arbitrators and administered
by the American Arbitration Association (“AAA”) under its Employment Arbitration
Rules and Mediation Procedures, provided, however, that this provision shall not
require arbitration of any claim which, by law, cannot be the subject of a
compulsory arbitration agreement, (ii) notwithstanding the foregoing, each party
irrevocably submits to the jurisdiction of any Commonwealth of Virginia State or
Federal court in any action or proceeding provided for under Section 1.7 of the
Severance Agreement or with respect to enforcement of any judgment upon the
award rendered by the arbitrators, and hereby waives the defense of inconvenient
forum to the maintenance of any such action or proceeding, (iii) either party
may elect to invoke the Optional Rules for Emergency Measures of Protection
provided under the AAA’s Employment Arbitration Rules and Mediation Procedures,
(iv) judgment upon the award rendered by the arbitrators may be entered by any
court having jurisdiction thereof, (v) except as otherwise required by
applicable law to render this Section 7 fully enforceable, each party shall be
responsible for its own costs and expenses (including attorneys’ fees)of any
arbitration pursuant to this Section 7; provided, however, that if the Employee
prevails on any dispute covered by this provision, then the Company shall
reimburse the Employee for the Employee’s reasonable attorneys’ fees and legal
expenses, no later than thirty (30) days following any final resolution of such
dispute, and (vi) each party has knowingly and voluntarily agreed to enter into
this arbitration clause and, except as provided in Section 1.7 of the Severance
Agreement, hereby waives any rights that might otherwise exist with respect to
resolution of disputes between them, including with respect to the right to
request a jury trial or other court proceeding.

 

9.          Non-Disparagement.

 

a.           The Employee agrees not to do or say anything, directly or
indirectly, that reasonably may be expected to have the effect of criticizing or
disparaging the Company, any director of Company, any of Company’s employees,
officers or agents, or diminishing or impairing the goodwill and reputation of
the Company or the products and services it provides. The Employee further
agrees not to assert that any current or former employee, agent, director or
officer of the Company has acted improperly or unlawfully with respect to the
Employee or any other person regarding employment. The Company agrees not to do
or say anything, directly or indirectly, that reasonably would have the effect
of criticizing or disparaging the Employee.

 

b.           Notwithstanding the foregoing provisions of this Section 9, the
parties agree that nothing in this Agreement shall be construed to prohibit the
exercise of any rights by either party that such party may not waive as a matter
of law nor does this Agreement prohibit the Employee, the Company or the
Company's officers, employees and/or directors from testifying truthfully in
response to a subpoena, inquiry or order by a court or governmental body with
appropriate jurisdiction or as otherwise required by law.

 

10.         Return of Company Property. On or before the Termination Date, as
determined by the Company, the Employee will promptly deliver to the Company all
Company property, including but not limited to, all computers, phones,
correspondence, manuals, letters, notes, notebooks, reports, flow charts,
programs, proposals, passwords, third party equipment that the Company is
authorized to represent, and any documents concerning the Company’s customers,
operations, products or processes (actual or prospective) or concerning any
other aspect of the Company’s business (actual or prospective) and, without
limiting the foregoing, will promptly deliver to the Company any and all other
documents or materials containing or constituting Confidential Information as
defined in the Non-Compete Agreement, except that the Employee may retain
personal papers relating to Employee’s employment, compensation and benefits.

 

 A-3 

 

 

11.         Cooperation. The Employee agrees that for a period of ten (10) years
following the Termination Date, the Employee shall have a continuing duty to
fully and promptly reasonably cooperate with the Company and its legal counsel
by providing any and all requested information and assistance concerning any
legal or business matters that in any way relate to the Employee’s actions or
responsibilities as an employee of the Company, or to the period during the
Employee’s employment with the Company. Such reasonable cooperation shall
include but not be limited to truthfully and in a timely manner participating
and consulting concerning facts, responding to questions, providing pertinent
information, providing affidavits and statements, preparing for and attending
depositions, and preparing for and attending trials, hearings and other
proceedings. Such reasonable cooperation shall include meeting with
representatives of the Company upon reasonable notice at reasonable times and
locations. The Company shall use its reasonable efforts to coordinate with the
Employee the time and place at which the Employee's reasonable cooperation shall
be provided with the goal of minimizing the impact of such reasonable
cooperation on any other material pre-scheduled business or professional
commitments that the Employee may have. The coordination and communication from
the Company to the Employee regarding the Employee’s cooperation shall come
through the Company’s Chief Legal Officer. The Company shall reimburse the
Employee for reasonable out-of-pocket expenses incurred by Employee in
compliance with this Section, including any reasonable travel expenses incurred
by Employee in providing such assistance, within thirty (30) days after Employee
incurs the expense. As part of the consideration provided to the Employee under
this Agreement, the Employee shall provide cooperation to the Company at no
additional cost to the Company. At no time subsequent to the Termination Date
shall the Employee be deemed to be a contractor or employee of the Company.

 

12.         Disclaimer of Liability. This Agreement and the payments and
performances hereunder are made solely to assist the Employee in making the
transition from employment with Company, and are not and shall not be construed
to be an admission of liability, an admission of the truth of any fact, or a
declaration against interest on the part of the Company.

 

13.         Entire Agreement. This Release Agreement constitutes the entire
agreement and understanding of the parties with respect to the subject matter
herein and supersedes all prior agreements, arrangements and understandings,
written or oral, between the parties; provided, however, that Section 2 of the
Severance Agreement, and the terms of the Non-Compete Agreement incorporated
therein, shall remain in full force and effect. The Employee agrees and
acknowledges that the covenants and restrictions set forth in Section 2 of the
Severance Agreement and the Non-Compete Agreement are reasonable and necessary
for the protection of the Company and to protect its business and Confidential
Information, and the Employee further expressly agrees that: (i) Section 2 of
the Severance Agreement and the terms of the Non-Compete Agreement are material
terms of this Release Agreement and (ii) notwithstanding the express provisions
of the Non-Compete Agreement, the Employee agrees, and the parties hereby amend
the Non-Compete Agreement to so provide, that the period during which the
Employee is bound by the covenants set forth in Sections 2, 3, 4 and 5 of the
Non-Compete Agreement shall remain in effect after the twelve (12)-month periods
described therein for so long as the Employee is eligible to receive, and
continues to receive, salary continuation payments pursuant to Section 1.3
and/or 1.4 of the Severance Agreement. The Employee acknowledges and agrees that
he is not relying on any representations or promises by any representative of
the Company concerning the meaning of any aspect of this Release Agreement. This
Release Agreement may not be altered or modified other than in a writing signed
by the Employee and an authorized representative of the Company.

 

 A-4 

 

 

14.         Headings. All descriptive headings in this Release Agreement are
inserted for convenience only and shall be disregarded in construing or applying
any provision of this Release Agreement.

 

15.         Claim for Reinstatement. Employee agrees to waive and abandon any
claim to reinstatement with Company. Employee further agrees not to apply for
any position of employment with Company and agrees that this Agreement shall be
sufficient justification for rejecting any such application.

 

16.         Counterparts. This Release Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the Company and the Employee have executed this Release
Agreement, on the date and year set forth below.

 

  LUMBER LIQUIDATORS HOLDINGS, INC.       By:                    Its:        
EMPLOYEE:       EMPLOYEE – DO NOT SIGN AT THIS TIME       Date:  

 

 A-5 

 

 

Appendix B

 

CONFIDENTIALITY, NON-SOLICITATION AND

NON-COMPETITION AGREEMENT

 

This Confidentiality, Non-Solicitation and Non-Competition Agreement (the
“Agreement”) is made and entered into this ____ day of July, 2018, by and
between Lumber Liquidators, Inc., its subsidiaries and affiliated entities
(collectively, and where applicable, individually, the “Company”) and Martin
Agard (the “Employee”).

 

WHEREAS, the parties hereto acknowledge that the Company is engaged in a highly
competitive business; that the Company has expended substantial time and effort
to develop, maintain, expand and protect the Company’s business, its workforce,
its relationships and goodwill with its suppliers and customers, and its
Confidential Information; that the Company has a legitimate business interest in
protecting the same; and that the Company would be materially harmed if during
Employee’s employment or after the Employee’s employment relationship with the
Company terminates, the Employee enters into competition with the Company or
attempts to solicit the Company’s suppliers, customers or employees prior to the
lapse of a reasonable period of time.

 

NOW, THEREFORE, in consideration of the Employee's employment or continued
employment with the Company beyond the date of this Agreement, the mutual
promises and obligations of the parties contained herein, and for other good and
valuable consideration, the adequacy and receipt of which is hereby
acknowledged, the parties do hereby agree as follows:

 

1.          Confidentiality. Throughout any period during which Employee is an
employee of the Company, and for a period of ten (10) years after the date
Employee shall cease for any reason whatsoever to be an employee of the Company
(the “Employment Cessation Date”), or as otherwise protected by applicable law
including the Virginia Uniform Trade Secrets Act, whichever is longer, Employee
agrees not to disclose, communicate, publish or divulge to any third party or
use, or permit others to use, any Confidential Information of the Company except
that Employee understands that Employee’s continuing duty of confidentiality
does not restrict Employee’s ability to communicate directly with the United
States Securities and Exchange Commission (“SEC”) about a potential securities
law violation or to communicate with the Congress, any agency Inspector General
and/or any other administrative or governmental agency about a potential
violation of federal or state law or regulation. For the purposes of this
Agreement, “Confidential Information” shall mean all information disclosed to
Employee, or known to Employee as a consequence of or through this employment,
where such information is not generally known by the public or was regarded or
treated as proprietary by the Company (including, without limitation, personal,
financial, private or sensitive information concerning the Company’s executives,
directors, employees customers and suppliers, the Company’s methods, systems,
designs and know-how, names of referral sources, customer records, customer
lists, business plans and practices, marketing methods, financials, strategies,
pricing, budgets, forecasts, contracts and plans (including, without limitation,
long-term and strategic plans) or any other non-public information which, if
used, divulged, published or disclosed by Employee, would be reasonably likely
to provide a competitive advantage to a competitor). Upon termination of
Employee’s employment with the Company for any reason, Employee shall
immediately return to the Company all of the Company’s property including,
without limitation, all Confidential Information, in Employee’s possession or
control.

 

 B-1 

 

 

2.          Non-Solicitation of Suppliers. Throughout any period during which
Employee is an employee of the Company, and for a period lasting until the later
of (a) twelve (12) months from and after the Employment Cessation Date, (b)
twelve (12) months from the date of entry by a court of competent jurisdiction
of a final judgment enforcing this covenant in the event of a breach by
Employee, or (c) the expiration of such other period as the Company and Employee
may agree in writing after the date hereof, Employee covenants and agrees that
Employee will not, for herself/himself or for the benefit of a Competing
Business as defined in Section 5(c) of this Agreement, solicit, contract with or
engage any (i) supplier or vendor that provided hardwood, engineered, bamboo,
cork, resilient, laminate or tile flooring or related flooring products (or the
raw materials required for such flooring or products) to the Company, and with
whom Employee had contact, in each case during the twelve (12) months prior to
the Employment Cessation Date, for purposes of providing products or services
that are similar to and competitive with any of the products or services
provided by the Company as of the Employment Cessation Date or (ii) entity,
independent contractor or any other individual that provided installation
services to the Company’s customers in connection with such customer’s hardwood,
engineered, bamboo, cork, resilient, laminate or tile flooring, and with whom
Employee had contact, in each case during the twelve (12) months prior to the
Employment Cessation Date, for purposes of providing products or services that
are similar to and competitive with any of the products or services provided by
the Company as of the Employment Cessation Date.

 

3.          Non-Solicitation of Customers. Throughout any period during which
Employee is an employee of Company, and for a period lasting until the later of
(a) twelve (12) months from and after the Employment Cessation Date, (b) twelve
(12) months from the date of entry by a court of competent jurisdiction of a
final judgment enforcing this covenant in the event of a breach by Employee, or
(c) the expiration of such other period as the Company and Employee may agree in
writing after the date hereof, Employee covenants and agrees that Employee will
not, for herself/himself or for the benefit of a Competing Business as defined
in Section 5(c) of this Agreement, solicit any person or entity who, during the
twelve (12) month period immediately preceding the Employment Cessation Date,
paid or engaged the Company for any of the products or services provided by the
Company as of the Employment Cessation Date, including, without limitation,
installation services, or who contacted the Company for the purpose of the
Company providing any of the products or services provided by the Company as of
the Employment Cessation Date including, without limitation, installation
services, (“Customer”), for purposes of providing products or services that are
similar to and competitive with any of the products or services provided by the
Company as of the Employment Cessation Date, provided Employee communicated
directly with such Customer on behalf of the Company during that twelve (12)
month period or Employee obtained confidential information about such Customer
in the ordinary course of business as a result of Employee’s association with
the Company.

 

4.          Non-Solicitation of Workers. Throughout any period during which
Employee is an employee of Company, and for a period lasting until the later of
(a) twelve (12) months from and after the Employment Cessation Date, (b) twelve
(12) months from the date of entry by a court of competent jurisdiction of a
final judgment enforcing this covenant in the event of a breach by Employee, or
(c) the expiration of such other period as the Company and Employee may agree in
writing after the date hereof, Employee will not recruit or assist any other
person or entity in the recruiting or hiring of any Worker or induce any Worker
to cease employment with the Company.  For purposes of this Agreement, “Worker”
shall mean any individual who was employed by the Company during any portion of
the twelve-month period prior to the Employment Cessation Date with whom
Employee, during such twelve-month time period, had contact or communications.

 

5.          Non-Competition.

 

(a)          Employee covenants and agrees that throughout any period during
which Employee is an employee of the Company, and for a period lasting until the
later of (a) twelve (12) months from and after the Employment Cessation Date,
(b) twelve (12) months from the date of entry by a court of competent
jurisdiction of a final judgment enforcing this covenant in the event of a
breach by Employee, or (c) the expiration of such other period as the Company
and Employee may agree in writing after the date hereof, Employee will not, for
himself/herself or for the benefit of a third party, work in a Competing
Position with a Competing Business in the Restricted Territory. However, nothing
in this Agreement shall prevent Employee from working in a position in a
subdivision of a Competing Business that does not provide any of the products or
services provided by the Company as of the Employment Cessation Date.

 

 B-2 

 

 

(b)          For purposes of this Agreement, “Competing Position” shall mean a
position that involves duties that are the same as or substantially similar to,
and competitive with, the duties that Employee performed for the Company within
the twelve (12) month period immediately preceding the Employment Cessation
Date.

 

(c)          For purposes of this Agreement, “Competing Business” shall mean any
entity that provides products or services that are similar to and competitive
with any of the products or services provided by the Company as of the
Employment Cessation Date, and shall specifically include (but not be limited
to) The Home Depot, Lowe’s, Menards, Amazon, and Floor & Decor to the extent
that they provide products or services that are similar to and competitive with
any of the products or services provided by the Company as of the Employment
Cessation Date.

 

(d)          For purposes of this Agreement, “Restricted Territory” shall mean
the continental United States, the Province of Ontario, Canada, and any other
Canadian province or territory where the Company has a store as of the
Employment Cessation Date.

 

6.          Proprietary Rights. All rights, including without limitation any
writing, discoveries, inventions, innovations, and computer programs and related
documentation and all intellectual property rights therein, including without
limitation copyright (collectively “Intellectual Property”) created, designed or
constructed by Employee during the Employee's term of employment with the
Company, that are related in any way to Employee's work with the Company or to
any of the services provided by the Company, shall be the sole and exclusive
property of the Company. Employee agrees to deliver and assign to the Company
all such Intellectual Property and all rights which Employee may have therein
and Employee agrees to execute all documents, including without limitation
patent applications, and make all arrangements necessary to further document
such ownership and/or assignment and to take whatever other steps may be needed
to give the Company the full benefit thereof. Employee further agrees that if
the Company is unable after reasonable effort to secure the signature of
Employee on any such documents, the President of the Company shall be entitled
to execute any such papers as the agent and attorney-in-fact of Employee and
Employee hereby irrevocably designates and appoints each such officer of the
Company as Employee’s agent and attorney-in-fact to execute any such papers on
Employee’s behalf and to take any and all actions required or authorized by the
Company pursuant to this subsection. Without limitation to the foregoing,
Employee specifically agrees that all copyrightable materials generated during
the term of Employee's employment with the Company, including but not limited
to, computer programs and related documentation, that are related in any way to
Employee's work with the Company or to any of the services provided by the
Company, shall be considered works made for hire under the copyright laws of the
United States and shall upon creation be owned exclusively by the Company. To
the extent that any such materials, under applicable law, may not be considered
works made for hire, Employee hereby assigns to the Company the ownership of all
copyrights in such materials, without the necessity of any further
consideration, and the Company shall be entitled to register and hold in its own
name all copyrights in respect of such materials. The provisions of this section
shall apply regardless of whether any activities related to the creation of any
Intellectual Property took place inside or outside of the Company's working
hours.

 

 B-3 

 

 

7.          Remedies. The parties hereto agree that given the nature of the
position held by Employee with the Company, the covenants set forth above are
reasonable and necessary for the protection of the significant investment of the
Company in developing, maintaining and expanding its business. Accordingly, the
parties to this Agreement further agree that in the event of any breach by the
Employee of any of the provisions above, that monetary damages alone will not
adequately compensate the Company for its losses and, therefore, that it may
seek any and all legal or equitable relief available to it, specifically
including, but not limited to, injunctive relief, and may hold the Employee
liable for all damages, including actual and consequential damages, costs and
expenses, including legal costs and reasonable attorneys' fees incurred by the
Company as a result of such breach. The parties further acknowledge their
intention that this Agreement shall be enforceable to the fullest extent
permitted by law.

 

8.          Notifications to and about Future Employers. During the twelve (12)
month period following the Employment Cessation Date and within two (2) business
days after accepting an offer of employment with any subsequent employer or
entering into a contract to provide services to any other entity, the Employee
agrees to (a) provide the Company with the name of the subsequent employer of
the Employee or any other person or entity to which the Employee may provide
services; and (b) provide notice of the Employee’s obligations under this
Agreement and a copy of this Agreement to the subsequent employer or the entity
to which the Employee may provide services.

 

9.          Exclusions. Nothing contained in this Agreement shall be construed
to:

 

(a)          Alter the Employee's or the Company's right to terminate the
Employee's employment with the Company at any time, with or without notice or
cause; or

 

(b)          Create any employment relationship between the Employee and the
Company other than employment at will.

 

10.         Binding Effect/Assignment. This Agreement shall be binding upon and
inure to the benefit of the Company and Employee and their respective heirs,
legal representatives, executors, administrators, successors and assigns.
Neither party shall be permitted to assign any portion of this Agreement, with
the sole exception that the Company shall be permitted to assign this Agreement
to any person or entity acquiring substantially all of the assets of the
Company.

 

11.         Entire Agreement. This Agreement shall constitute the entire
agreement between the parties with respect to the subject matter contained
herein, and any prior understandings or agreements between the parties shall not
be binding upon either party.

 

12.         Modification of Agreement. Any modification of this Agreement shall
be binding only if evidenced in writing and signed by both parties.

 

13.         Effect of Partial Invalidity. The invalidity of any portion of this
Agreement shall not be deemed to affect the validity of any other provisions. In
the event that any provision of this Agreement is held to be invalid, the
parties agree that the remaining provisions shall be deemed in full force and
effect as if they had been executed by both parties subsequent to the
expungement of the invalid provision.

 

14.         Governing Law. This Agreement shall be subject to and construed in
accordance with the laws of the Commonwealth of Virginia without regard to its
conflict of laws principles. The parties to this Agreement hereby expressly
consent to be subject to the jurisdiction of the Commonwealth of Virginia to
determine any disputes regarding this Agreement.

 

15.         Construction of Agreement. The parties to this Agreement represent
and agree that the Agreement is reasonable and mutually binding. Moreover, the
parties represent that this Agreement has been reviewed by their respective
counsel and agree that it shall not be construed in favor of one party over the
other party.

 

[SIGNATURE PAGE FOLLOWS]

 

 B-4 

 

 

IN WITNESS WHEREOF, Employee and the Company have caused this Agreement to be
executed and sealed in the Commonwealth of Virginia as of the date first
appearing above.

 

EMPLOYEE:   LUMBER LIQUIDATORS, INC.       By:               By:                
  Name: Martin Agard   Name:  Martin F. Roper     Title:    Chairman of the
Compensation Committee

 

 B-5