Document:

a2018performanceshareagr

 1 GATX CORPORATION 2012 INCENTIVE AWARD PLAN PERFORMANCE SHARE AGREEMENT FOR EXECUTIVE OFFICERS  This PERFORMANCE SHARE AGREEMENT (this “Agreement”) is entered into as of January 25, 2018 (the “Grant Date”) by and between the Participant and GATX Corporation (the "Company") in respect of the performance period beginning on January 1, 2018 through and including December 31, 2020 (the “Performance Period”).  WHEREAS, the Company maintains the GATX Corporation 2012 Incentive Award Plan (the "Plan"), which is incorporated into and forms a part of this Agreement, and the Participant has been selected by the Compensation Committee of the Board of Directors of the Company (the “Committee”), which has been charged with the responsibility of administering the Plan, to receive a grant of Performance Shares under the Plan;  NOW, THEREFORE, IT IS AGREED, by and between the Company and the Participant as follows:  1. Defined Terms.  Certain capitalized terms used in this Agreement are defined in paragraph 13 or elsewhere in this Agreement.  Capitalized terms used but not defined herein shall have the meanings ascribed thereto in the Plan.  2. Award.  Subject to the terms of the Plan and this Agreement, the Participant is hereby granted the number of Performance Shares approved by the Committee, subject to Section 3.1 and Article 5 of the Plan and as set forth on the Morgan Stanley StockPlan Connect website (https://www.stockplanconnect.com) or any successor administrator the Committee may designate from time to time to administer the Plan and this Agreement (the “Award”).  Each Performance Share entitles the Participant to receive one share of Common Stock of the Company (each a “Share”) subject to the terms and conditions of this Agreement.  3. Voting Rights and Dividends.  Notwithstanding anything to the contrary, the Participant shall not have any rights as a shareholder of the Company, including the right to vote, until the Participant actually receives Shares in accordance with paragraph 4 of this Agreement.     An account shall be established for the Participant, to which shall be credited dividend equivalents equal to the product of (a) the number of the Participant’s Performance Shares and (b) the dividend declared on a single share of Common Stock.  To the extent the Participant becomes vested in Performance Shares, the Participant shall be entitled to a distribution of the dividend equivalents credited to his or her account if and when Shares are issued with respect to Performance Shares to which the Participant becomes entitled pursuant to paragraph 4 of this Agreement.  All dividend equivalents paid will be considered ordinary income and 

 

 2 will be subject to supplemental withholding rates for income tax purposes including payroll taxes, applicable to such supplemental income.  4. Vesting, Transfer and Forfeiture.    (a) After the end of the Performance Period, the Committee shall determine the number of the Participant's Performance Shares that have been earned for the Performance Period in accordance with the schedule set forth on Exhibit 1, weighted by the percentages set forth in the column captioned “Weight” on Exhibit 2 and calculated in the manner set forth on Exhibit 2 (provided that the determination under this subparagraph 4(a) shall be subject to modification as provided in paragraph 8 hereof).  The date of the Committee’s determination being the “Determination Date”.   (b) Notwithstanding anything in this Agreement to the contrary that requires delivery and payment of Shares, the Participant may elect, in his or her sole discretion in lieu of Shares, to receive from the Company cash equal to the Fair Market Value of the Shares (as of the Determination Date) that otherwise would be delivered and payable under the terms of this Agreement, provided that the following conditions are met: (i) the Participant is within five years of being retirement-eligible under the GATX Non-Contributory Pension Plan for Salaried Employees as of the last day of the Performance Period; or (ii) the Participant satisfies at least 150% of his or her ownership requirement under the Company’s stock retention policy as of the last day of the Performance Period; and (iii) such election is submitted in writing on such form as the Company may specify (the “Cash Election”).  The Participant may submit a Cash Election only during any period in which the Participant is allowed to trade in the Company’s Shares under the Company’s insider trading policy, but no later than the Determination Date for the Performance Period.  If any of the foregoing conditions are not met, then the election will be void and the Participant shall receive payment under this Agreement in the form of Shares.  Otherwise, an election to receive cash in lieu of Shares may not be revoked or changed once made.  (c) As soon as practicable after the Determination Date, but not later than March 15 of the year following the end of the Performance Period, an equal number of Shares shall be transferred to the Participant.  (d) Except as provided in subparagraph 4(e) below, if the Participant's Date of Termination occurs prior to the end of the Performance Period, the Participant shall forfeit all Performance Shares and rights under this Agreement.   (e) Notwithstanding subparagraph 4(d) above, the Participant shall become vested in a number of earned Performance Shares hereunder, and shall 

 

 3 become owner of an equal number of Shares in respect thereof, free and clear of all restrictions otherwise imposed by this Agreement, as follows:  (i) If the Participant’s employment is involuntarily terminated by the Company other than for Cause, not less than eighteen (18) months following the beginning of the Performance Period but on or prior to the end of the Performance Period, the Participant will be entitled to a pro rata portion of his or her earned Performance Shares based on the length of his or her employment during the Performance Period.  The pro rata portion of the Performance Shares shall equal the product of:    (A)  the number of Performance Shares to which the Participant would otherwise be entitled in accordance with the foregoing provisions of this paragraph 4 had his or her employment not been terminated; and   (B) a fraction (not greater than one), the numerator of which is the number of days the Participant was employed by the Company or its Subsidiaries during the period beginning on the date of commencement of the Performance Period and ending on the Date of Termination, and the denominator of which is the number of days in the Performance Period.  The Shares to which the Participant is entitled pursuant to this subparagraph 4(e)(i) shall be transferred to the Participant in the year following the end of the Performance Period as soon as practical following the Determination Date , but not later than March 15 of the year following the end of the Performance Period.  (ii) If the Participant's Date of Termination occurs by reason of the Participant's death, Retirement or Disability prior to the end of the Performance Period, the Participant will be entitled to receive a pro rata portion of his or her earned Performance Shares based on the length of his or her employment during the Performance Period.  The pro rata portion of the Performance Shares shall equal the product of:    (A)  the number of Performance Shares to which the Participant would otherwise be entitled in accordance with the foregoing provisions of this paragraph 4 if no Date of Termination had occurred; and   (B) a fraction (not greater than one), the numerator of which is the number of days during the period beginning on the date of commencement of the Performance Period and ending on 

 

 4 the date of the Participant’s death, Retirement or Disability, and the denominator of which is the number of days in the Performance Period.   Notwithstanding the foregoing, if the Participant’s Date of Termination occurs by reason of the Participant’s death, Retirement or Disability, the Committee may, in its sole discretion, increase the number of Performance Shares to which the Participant is entitled, but in no event will the Participant be entitled to a distribution that is greater than what would have been distributable if no Date of Termination had occurred. The Shares to which the Participant is entitled pursuant to this subparagraph 4(e)(ii) shall be transferred to the Participant in the year following the end of the Performance Period as soon as practical following the Determination Date, but not later than March 15 of the year following the end of the Performance Period.  (iii) Subject to the provisions of Section 14.2 of the Plan (relating to the adjustment of Shares), if a Change in Control occurs prior to a Participant's Date of Termination and before the end of the Performance Period and, within two (2) years after the occurrence of the Change in Control, the Participant's Date of Termination occurs by reason of discharge by the Participant's employer without Cause or the Participant resigns from employment with the employer for Good Reason, the Participant shall become vested in all Performance Shares granted under this Agreement prior to the Change in Control that are held by the Participant as of the Date of Termination, in accordance with subparagraphs 4(e)(iv) or 4(e)(v), as applicable.    (iv) With respect to any Performance Shares that become vested in connection with a Change in Control described in Subsection 2.7(a), (b), (c) or (d) of the Plan, the number of Shares to which the Participant is entitled upon the vesting of his or her Performance Shares shall be calculated as if the Company had achieved 100% performance against its Performance Goals, and shall be transferred to the Participant as soon as practicable following the Date of Termination.  Following a distribution in accordance with this subparagraph 4(e)(iv), the Participant shall have no further rights under this Agreement.  (v) With respect to any Performance Shares that become vested in connection with a Change in Control described in Subsection 2.7(e) of the Plan, with respect to a Participant as described therein (relating to certain transactions involving a Subsidiary or Business Segment), as soon as practicable following the Date of 

 

 5 Termination, the Participant shall receive a distribution of the following number of Shares, determined on the assumption that the Company achieved 100% performance against its Performance Goals as follows:    (A) If the Date of Termination occurs during the first year of the Performance Period, the Participant shall be entitled to receive Shares equal in number to one-third (1/3) of his or her Performance Shares.  (B) If the Date of Termination occurs during the second year of the Performance Period, the Participant shall be entitled to receive Shares equal in number to two-thirds (2/3) of his or her Performance Shares.     (C) If a Date of Termination occurs during the third year of the Performance Period, such Participant shall be entitled to receive Shares equal in number to the total of all of his or her Performance Shares.    Following a distribution in accordance with this subparagraph 4(d)(v), the Participant shall have no further rights under this Agreement.  (vi) For purposes of subparagraphs 4(e)(iii) and 4(e)(v) hereof, if, as a result of a Change in Control described in Subsection 2.7(e) of the Plan, the Participant’s employer ceases to be a Subsidiary (and the Participant’s employer is or becomes an entity that is separate from the Company), and the Participant is not, immediately following the Change in Control, employed by the Company or an entity that is then a Subsidiary, then the occurrence of the Change in Control shall be treated as the Participant’s Date of Termination caused by the Participant being discharged by the employer without Cause.    (f) Except pursuant to a domestic relations order, the Performance Shares may not be sold, assigned, transferred, pledged or otherwise encumbered until Shares have been distributed to the Participant free and clear of all restrictions.  5. Withholding.  The granting, vesting and settlement of Performance Shares under this Agreement are subject to withholding of all applicable taxes.  Subject to such rules and limitations as may be established by the Committee from time to time, the Participant may satisfy his or her withholding obligations through (i) payment of cash to the Company equal to the amount of taxes required to be withheld, (ii) contemporaneously withholding from other sources of income otherwise payable to the Participant by the Company or any Subsidiary, or (iii) the surrender of 

 

 6 Shares which the Participant already owns, or to which the Participant is otherwise entitled under the Plan or this Agreement; provided, however, that, except as otherwise provided by the Committee, Shares otherwise payable under this Agreement may not be used to satisfy more than the Company's minimum statutory withholding obligation (based on minimum statutory withholding rates for income tax purposes, including payroll taxes, that are applicable to such supplemental taxable income).  In the event that the withholding obligation arises during a period in which the Participant is prohibited from trading in Common Stock pursuant to the Company’s insider trading policy, or by applicable securities or other laws, then unless otherwise elected by the Participant during a period when he or she was not so restricted from trading, the Company shall automatically satisfy the Participant’s withholding obligation by withholding from Shares otherwise deliverable under this Agreement.  6. Heirs and Successors.  This Agreement shall be binding upon, and inure to the benefit of, the Company and its successors and assigns, including any person acquiring, whether by merger, consolidation, purchase of assets or otherwise, all or substantially all of the Company's assets and business.  If any rights of the Participant or benefits distributable to the Participant under this Agreement have not been exercised or distributed, respectively, at the time of the Participant's death, such rights shall be exercisable by the Designated Beneficiary, and such benefits shall be distributed to the Designated Beneficiary, in accordance with the provisions of this Agreement and the Plan.  If a deceased Participant fails to designate a beneficiary, or if the Designated Beneficiary does not survive the Participant, any rights that would have been exercisable by the Participant and any benefits distributable to the Participant shall be exercised by or distributed to the legal representative of the estate of the Participant.  If the Designated Beneficiary survives the Participant but dies before the exercise of all rights or the complete distribution of benefits under this Agreement, then any remaining rights and any remaining benefit distribution shall be exercisable by or distributed to the legal representative of the estate of the Designated Beneficiary.  7. Administration.  The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan.  Any interpretation of this Agreement by the Committee and any decision made by it with respect to this Agreement shall be final and binding on all persons.  8. Modification of Performance Goals.  Pursuant to Subsection 2.33(b) of the Plan, in determining the extent to which the Performance Goals have been achieved, the Committee may, in its sole discretion, include or exclude items or events that impact the final results, positively or negatively, as it deems appropriate.  9. Plan Governs.  Notwithstanding anything in this Agreement to the contrary, the terms of this Agreement shall be subject to the terms of the Plan, a copy of which 

 

 7 may be obtained by the Participant from the Director, Compensation of the Company. This Agreement is subject to all interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.  10. Not An Employment Contract.  The grant of Performance Shares hereunder will not confer on the Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate or modify the terms of such Participant's employment or other service at any time.  11. Notices.  Any written notices provided for in this Agreement or the Plan shall be provided in accordance with subparagraph 11(a) or 11(b), as applicable and, if provided to the Company, shall be addressed as follows:  GATX Corporation 222 West Adams Street Chicago, IL 60606-5314 U.S.A.  (a) Any notice required by the Participant pursuant to the definition of Good Reason, as defined below, shall be in writing given by hand delivery or by registered or certified mail, return receipt requested, postage prepaid, addressed to the Senior Vice President, Human Resources and shall be effective when actually received.    (b) All other notices shall be in writing and shall be deemed sufficiently given if either hand delivered or if sent by fax or overnight courier, or by postage paid first class mail.  Any such notice sent by mail shall be deemed received three business days after mailing, but in no event later than the date of actual receipt and shall be directed, if to the Participant, at the Participant's address indicated by the Company's records, or if to the Company, to the attention of the Director, Compensation.  12. Amendment.  This Agreement may be amended in accordance with the provisions of the Plan, and may otherwise be amended by written agreement of the parties.  13. Definitions.  For purposes of this Agreement, the terms used in this Agreement shall be subject to the following:  “3-Year Average Return on Equity” shall mean the sum of net income divided by average equity for each year in the Performance Period divided by three (3).  Accumulated other comprehensive income is excluded from equity.  

 

 8 “3-Year Cumulative Investment Volume” shall mean the sum of consolidated cumulative GAAP basis portfolio investments and capital additions as reported on the company’s audited balance sheet for each year in the Performance Period.  Purchases of leased in assets are excluded.  “Cause” shall mean (i) the willful and continued failure of the Participant to perform the Participant’s duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), or (ii) the willful engaging by the Participant in illegal conduct or gross misconduct in the course of his or her discharge of duties for the Company.   For purposes of this provision, no act or failure to act, on the part of the Participant, shall be considered “willful” unless it is done, or omitted to be done, by the Participant in bad faith or without reasonable belief, that the Participant’s action or omission was in the best interests of the Company.  “Change in Control” shall have the meaning ascribed to it in Section 2.7 of the Plan.  “Date of Termination” shall mean the date on which the Participant incurs a Termination of Service.  “Designated Beneficiary” shall mean the beneficiary or beneficiaries designated by the Participant in a writing filed with the Committee in such form and at such time as the Committee shall require.    “Disability” shall mean, except as otherwise provided by the Committee, the period in which the Participant is considered to be "disabled" as that term is defined in the Company's long term disability plan.  “Good Reason” shall mean the occurrence of one or more of the following conditions without the consent of the Participant:  (a) a material diminution in the Participant's base compensation, compared with the Participant's base compensation in effect immediately prior to the consummation of a Change in Control;  (b) a material diminution in the Participant's authority, duties, or responsibilities, compared with the authority, duties, and responsibilities of the Participant immediately prior to the consummation of a Change in Control;    (c) the Participant is required to report to a supervisor with materially less authority, duties, or responsibilities than the authority, duties, and responsibilities of the supervisor who had the greatest such authority, duties, and responsibilities at the time the Participant was required to 

 

 9 report to such supervisor during the 120-day period immediately preceding the consummation of a Change in Control;  (d) a material diminution in the budget over which the Participant retains authority, compared with the most significant budget, if any, over which the Participant had authority at any time during the 120-day period immediately preceding the consummation of a Change in Control;  (e) a material change in the geographic location at which the Participant must perform services; or  (f) any other action or inaction by the Company that constitutes a material breach of any change of control agreement between the Company and the Participant that is in effect when a Change in Control occurs.  If (I) the Participant provides written notice to the Company of the occurrence of Good Reason within a reasonable time (not more than 90 days) after the Participant has knowledge of the circumstances constituting Good Reason, which notice specifically identifies the circumstances which the Participant believes constitute Good Reason; (II) the Company fails to notify the Participant of the Company's intended method of correction within a reasonable period of time (not less than 30 days) after the Company receives the notice, or the Company fails to correct the circumstances within a reasonable period of time after such notice (except that no such opportunity to correct shall be applicable if the circumstances constituting Good Reason are those described in paragraph (e) above, relating to relocation); and (III) the Participant resigns within a reasonable time after receiving the Company's response, if such notice does not indicate an intention to correct such circumstances, or within a reasonable time after the Company fails to correct such circumstances (provided that in no event may such termination occur more than two (2) years after the initial existence of the condition constituting Good Reason); then the Participant shall be considered to have terminated for Good Reason.  “Performance Goals” shall mean 3-Year Average Return on Equity and 3-Year Cumulative Investment Volume established by the Committee for the Performance Period as set forth in Exhibit 1.  “Retirement shall mean retirement of the Participant on a "Retirement Date," as that term is defined in the GATX Corporation Non-Contributory Pension Plan for Salaried Employees.    

 

 10 Exhibit 1  Performance Goals, Weights and % of Target Earned 2018-2020 Performance Period  3-Year Average ROE (1) (50% weight)  % of Target Grant Earned <6.2% 0% 6.2% 25% 7.1% 50% 8.1% 75% 8.9% 100% 9.8% 125% 10.8% 150% 11.7% 175% >= 12.6% 200%    Interpolated for actual performance between levels shown  (1) 3-Year Average Return on Equity is defined as the sum of net income divided by average equity for each year in the Performance Period divided by three (3); excludes accumulated other comprehensive income from equity.   3-Year Cumulative Investment Volume (2) (50% weight)  % of Target Grant Earned <$1.75 billion 0% $1.75 billion 25% $2.00 billion 50% $2.25 billion 75% $2.50 billion 100% $2.75 billion 125% $3.00 billion 150% $3.25 billion 175% >= $3.50 billion 200%    Interpolated for actual performance between levels shown  (2) 3-Year Cumulative Investment Volume is defined as the sum of consolidated cumulative GAAP basis portfolio investments and capital additions as externally reported for each year in the Performance Period; excludes purchases of leased in assets.  In determining the extent to which the Performance Goals have been achieved, the Committee, in its sole discretion, may include or exclude items or events that impact the final results, positively or negatively.  

 

Exhibit 2 11 Sample Calculation of Performance Shares Earned    Number of Performance Shares Granted:  1,000     Performance Goal Weight  Target Goal  Assumed Actual Payout Percentage Weighted Payout Percentage  3-Year Average ROE  3-Year Cumulative Investment Volume  50%   50%   8.9%   $2.50 billion  10.8%   $2.25 billion  150%   75%  75.0%   37.5%  Total Weighted Payout     112.5%  Performance Shares Earned  Shares Granted Weighted Payout  Total Performance Shares Earned 1,000   x 112.5% =    1,125Exhibit 10.1

 

UNITED STATES DISTRICT COURT FOR

EASTERN DISTRICT OF VIRGINIA

ALEXANDRIA DIVISION

 

	 	)	 
	IN RE: LUMBER LIQUIDATORS	)	MDL No. 1 :15-md-02627 (AJT/TRJ)
	CHINESE- MANUFACTURED	)	 
	LAMINATE FLOORING) PRODUCTS	)	 
	MARKETING, SALES PRACTICES AND ) 	)	 
	PRODUCTS LIABILITY LITIGATION	)	 
	 	)	 
	 	)	 
	IN RE: LUMBER LIQUIDATORS	)	MDL No. 1:16-md-02743 (AJT/TRJ)
	CHINESE- MANUFACTURED	)	 
	LAMINATE FLOORING) DURABILITY	)	 
	MARKETING AND SALES PRACTICES	)	 
	 LITIGATION	)	 
	 	)	 

 

CLASS ACTION SETTLEMENT
AGREEMENT IN FORMALDEHYDE MDL AND DURABILITY MDL

 

This SETTLEMENT AGREEMENT is entered
into, subject to final approval of the Court and entry of final judgment of dismissal with prejudice, between the following:

 

A.           Plaintiffs
Lila Washington (dec.), Maria and Romualdo Ronquillo, Joseph Michael Balero, Ryan and Kristin Brandt, Devin and Sara Clouden, Kevin
and Julie Parnella, and Shawn and Tanya Burke (collectively the “Formaldehyde Plaintiffs”), individually and as representatives
of the purported class (“Formaldehyde Class”), in In Re: Lumber Liquidators Chinese-Manufactured Laminate Flooring
Products Marketing, Sales Practices and Products Liability Litigation, MDL No. I :15-md-02627 (AJT) (the “Formaldehyde
MDL”) pending in the United States District Court for the Eastern District of Virginia (“Court”); and

 

B.            Plaintiffs
Erin Florez, Jim Moylen, Kelly Ryan, Karen Hotaling, and Logan Perel (collectively the “Durability Plaintiffs”), individually
and as representatives of the purported class (“Durability Class”), in In Re: Lumber Liquidators Chinese-Manufactured
Laminate Flooring Durability Marketing and Sales Practices Litigation, MDL No. 1:16-md-02743 (the “Durability MDL”)
pending before the Court; and

 

    	 	- 1 -	 

     

    

 

C.           Defendant
Lumber Liquidators, Inc. (“Lumber Liquidators” or “Defendant”).

 

The Formaldehyde Plaintiffs, Durability
Plaintiffs, and Defendant are, at times, collectively referred to as the “Parties.” The Durability Plaintiffs and the
Formaldehyde Plaintiffs are collectively referred to as the “Plaintiffs.”

 

RECITALS

 

A.           WHEREAS,
beginning on or about March 3, 2015, multiple purported class action lawsuits were filed against Lumber Liquidators in various
U.S. federal district courts and state courts involving claims of formaldehyde emissions from Chinese-manufactured laminate flooring
in violation of the Airborne Toxic Control Measure found in Chapter 17 of the California Code of Regulations, sections 93120 et
seq. issued by the California Air Resources Board (“CARB”).

 

B.           WHEREAS,
on June 12, 2015, the United States Judicial Panel on Multidistrict Litigation (the “MDL Panel”) issued an order transferring
and consolidating the formaldehyde cases to the United States District Court for the Eastern District of Virginia. The consolidated
case is captioned In re: Lumber Liquidators Chinese-Manufactured Flooring Products Marketing, Sales, Practices and Products
Liability Litigation, MDL No. 1:15-md-02627 (the “Formaldehyde MDL”).

 

    	 	- 2 -	 

     

    

 

C.           WHEREAS,
pursuant to court order, Plaintiffs filed a First Amended Representative Class Action Complaint in the Formaldehyde MDL on September
18, 2015. The complaint asserted twelve causes of action including: 1) Fraudulent concealment, 2) Violation of the California Unlawful,
Unfair, or Fraudulent Business Acts and Practices Law, Cal. Bus. & Prof. Code s 17200 et seq., 3) Violation of the California
False Advertising Law, Cal. Bus. & Prof. Code § 17500 et seq., 4) Violation of the California Consumer Legal
Remedies Act, Cal. Code § 1750 et seq., 5) Violation of the Florida Deceptive and Unfair Trade Practices Act, Fla.
Stat. § 501.201 et seq., 6) Violation of New York Gen. Bus. Law § 349 et seq., 7) Violation of the Texas
Deceptive Trade Practices Act, Tex. Bus. & Com. Code § 17.50 et seq., 8) Violation of the Illinois Consumer Fraud
and Deceptive Business Practices Act, 815 III. Comp. Stat. § 505/1 et seq., 9) breach of implied warranty, 10) Violation
of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., 11) Negligent misrepresentation, and 12) Declaratory relief.

 

D.           WHEREAS,
Lumber Liquidators filed a motion for summary judgment as to the Formaldehyde MDL Representative Complaint. On June 20, 2017, the
Court issued a revised Memorandum Opinion in the Formaldehyde MDL granting Lumber Liquidators partial summary judgment as to (1)
all claims filed by Laura Washington; (2) claims filed by the Cloudens (New York plaintiffs), the Burkes (Illinois plaintiffs),
and Lila Washington (California plaintiff) for fraudulent concealment (Count 1); (3) all claims for violations of the California
False Advertising Law (Count III); (4) all claims for violation of the California Legal Remedies Act (Count IV); (5) all claims
for violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (Count VIII); and 6) all Plaintiffs’ demands
for declaratory relief (Count XII). The court denied the remainder of the motion, and the following claims remain: (1) claims filed
by Lila Washington, the Ronquillos, and Mr. Balero (California plaintiffs) and the Brandts (Florida plaintiffs) and Parnellas (Texas
plaintiffs) for fraudulent concealment (Count 1); (2) claims filed by Lila Washington, the Ronquillos, and Mr. Balero (California
plaintiffs under the California Unlawful, Unfair, or Fraudulent Business Acts and Practices Law (Count II); (3) the Brandts’
(Florida plaintiffs) claims under the Florida Deceptive and Unfair Trade Practices Act (Count V); (4) the Parnellas’ (Texas
plaintiffs) claims under the Texas Deceptive Trade Practices Act (Count VII); (5) the Cloudens’ (New York plaintiffs)
claims under New York General Business Law Section 349 (Count VI); (6) all plaintiffs’ claims for breach of implied warranty
and violations of the Magnuson-Moss Warranty Act (County IX-X) and (7) the Brandts’ (Florida plaintiffs) claims for negligent
misrepresentation (Count XI).

 

    	 	- 3 -	 

     

    

 

E.           WHEREAS,
the court further ruled that plaintiffs in the more than 100 pending cases, most purporting to represent class actions, must come
forward to explain why their cases are factually or legally unique such that they should not be bound by the summary judgment ruling.
On July 31, 2017, Plaintiffs filed a Report on Personal Injury and Objections to Application of the Summary Judgment Ruling identifying
19 plaintiffs who objected to the application of the summary judgment ruling to their claims.

 

F.           WHEREAS,
Lumber Liquidators filed a motion to dismiss the nationwide class allegations, on which the court has not yet ruled.

 

G.           WHEREAS,
Lumber Liquidators filed a motion to dismiss all personal injury claims asserted in class action complaints. Plaintiffs subsequently
agreed and the Court ordered that no Chinese formaldehyde class action pending in the Formaldehyde MDL will seek damages for personal
injury on a class-wide basis. The order did not affect any claims for personal injury brought solely on an individual basis.

 

H.           WHEREAS,
approximately 26 fact depositions and 10 expert depositions were completed in the Formaldehyde MDL.

 

I.            WHEREAS,
on May 20, 2015, a purported class action titled Abad v. Lumber Liquidators, Inc., was filed in the United States District
Court for the Central District of California and three amended complaints were subsequently filed challenging certain representations
about the durability and the abrasion class ratings of Lumber Liquidators’ Chinese-manufactured laminate flooring.
The California court ordered that all non-California plaintiffs re-file and were to be transferred to the district court located
near their place of residence. The non-California plaintiffs refiled their actions and were subsequently transferred to the respective
districts of each plaintiff. Additional plaintiffs filed purported class actions in Mississippi, Florida, and Alabama.

 

    	 	- 4 -	 

     

    

 

J.           WHEREAS,
on October 3, 2016, the MDL Panel issued an order transferring and consolidating the durability class actions to the United States
District Court for the Eastern District of Virginia. The consolidated case is captioned In re: Lumber Liquidators Chinese- Manufactured
Laminate Flooring Durability Marketing and Sales Practices Litigation, MDL No. 1:16-md-02743 (the “Durability MDL”).

 

K.          WHEREAS,
pursuant to court order, the Durability Plaintiffs filed a Representative Class Action Complaint on February 27, 2017, alleging
ten causes of action, including: 1) Breach of implied warranties, 2) Fraudulent concealment, 3) Violation of the Magnuson-Moss
Warranty Act, 25 U.S.C. § 2301 et seq., 4) Violation of the California Unfair Competition Law, Cal. Bus. & Prof.
Code s 17200 et seq., 5) Violation of the California False Advertising Law, Cal. Bus. & Prof. Code § 17500 et
seq., 6) Violation of the California Consumers Legal Remedies Act, Cal. Civ. Code § 1750 et seq., 7) Violation
of the Alabama Deceptive Trade Practices Act, Ala. Code § 8-12-1 et seq., 8) Violation of the Nevada Deceptive Trade
Practices Act, Nev. Rev. Stat. § 41,600 and § 598.0915 et seq., 9) Violation of the New York General Business
Law § 349, and 10) Violation of the Virginia Consumer Protection Act, VA Code § 59.1-98 et seq.

 

    	 	- 5 -	 

     

    

 

L.           WHEREAS,
Lumber Liquidators filed a motion to dismiss the Durability MDL Representative Complaint. On July 7, 2017, the Court partially
granted Lumber Liquidators’ motion and dismissed: (1) all Plaintiffs’ claims for breach of implied warranty
(Count 1); (2) Alabama Plaintiff Florez’s claim for fraudulent concealment (Count ID; (3) Virginia Plaintiff Perel’s
claim for breach of written warranty under the Magnuson-Moss Warranty Act (Count III); (4) California Plaintiff Moylen’s
claim for damages under the California Legal Remedies Act (Count VI); and (5) Alabama Plaintiff Florez’s claim under the
Alabama Deceptive Trade Practices Act. The Court denied the remainder of the motion to dismiss, and the following claims remain:
1) all Plaintiffs’ claims for fraudulent concealment other than that of Alabama Plaintiff Erin Florez (Count II); 2) all
Plaintiffs’ implied warranty claims and all Plaintiffs’ written warranty claims under the Magnuson-Moss Warranty Act
other than Plaintiff Perel (Count III); 3) California Plaintiff Moylen’s claim under the California
Unfair Competition Law (Count IV); 4) California Plaintiff Moylen’s claim under the California False Advertising Law (Count
V); 5) California Plaintiff Moylen’s claim for injunctive relief under California Legal Remedies Act (Count VI); 6) Nevada
Plaintiff Hotaling’s claim under the New York General Business Law (Count IX); and 8) Virginia Plaintiff Perel’s claim
under the Virginia Consumer Protection Act.

 

M.          WHEREAS,
approximately 13 depositions in the Durability MDL were completed before the discovery was stayed.

 

N.           WHEREAS,
in accordance with the Court ordered schedules, Plaintiffs have not yet moved for class certification in either the Formaldehyde
MDL or the Durability MDL, and no class has been certified against Lumber Liquidators.

 

O.           WHEREAS,
the Formaldehyde Plaintiffs and Defendant held mediations in December 2015 and July 2016, and had ongoing mediation negotiations
that also involved the Durability Plaintiffs in 2017. Beginning August 17, 2017, the Parties participated in mediation before the
Honorable Judge Leonie M. Brinkema of the Eastern District of Virginia and entered into a Memorandum of Understanding to
settle all claims in the Formaldehyde MDL and Durability MDL on October 23, 2017 (the “MOU”).

 

    	 	- 6 -	 

     

    

 

P.           WHEREAS,
Formaldehyde Plaintiffs, the Formaldehyde Class, Durability Plaintiffs, the Durability Class, and Plaintiffs’ Co-Lead Counsel
for the Formaldehyde MDL and Plaintiffs’ Co-Lead Counsel for the Durability MDL understand and acknowledge that Lumber Liquidators
admits no fault or liability and that it expressly denies any fault or liability in connection with these claims and that Defendant
has agreed to settle on the following terms set forth in this Settlement Agreement only to avoid the expense, inconvenience and
uncertainty of further litigation.

 

NOW, THEREFORE, the Parties,
in consideration of the foregoing, the terms and conditions set forth below, and the good and valuable consideration set forth
herein, acknowledged by each of them to be satisfactory and adequate, and intending to be legally bound, it is agreed by and among
the Parties that the Formaldehyde MDL and the Durability MDL are to be settled, and the Complaints dismissed on the merits, with
prejudice, subject to Court approval, and the Parties mutually agree as follows:

 

1.             DEFINITIONS

 

In addition  to the terms defined above, capitalized
terms shall have the meanings set forth below:

 

		a.	“Approved Claim” means a Claim submitted by
a Claimant that the Settlement Administrator, determines to be timely, accurate, eligible, and in proper form consistent with
this Settlement Agreement.

 

		b.	“Approved Claimants”
means those verified purchasers of Chinese-made laminate flooring sold by Lumber Liquidators between January 1, 2009 and May 31,
2015, who submitted Approved Claims. If a customer had an installer, contractor, or other professional purchase the product
on their behalf, the customer will be deemed a purchaser and eligible for participation in the Settlement Class provided:

 

    	 	- 7 -	 

     

    

 

		(1)	They have evidence to support the purchase made on their
behalf; and

 

		(2)	There is no double recovery by multiple Claimants related
to the same purchase as determined by the Claims Administrator.

 

		c.	“CARB1” refers to the standard employed by
the California Air Resources Board from at least January 1, 2009 to December 31, 2010 for levels of formaldehyde in laminate flooring
(.21 parts per million).

 

		d.	“CARB2” refers to the standard employed by
the California Air Resources Board from January 1, 2011 through May 31, 2015 for levels of formaldehyde in laminate flooring (.11
parts per million).

 

		e.	“CARB2/Durability Settlement Class” means all
purchasers of Chinese-made laminate flooring from Lumber Liquidators between January 1, 2011 and May 31, 2015.

 

		f.	“CARB1 Settlement Class” means all purchasers
of Chinese-made laminate flooring from Lumber Liquidators between January 1, 2009 and December 31, 2010.

 

		g.	“Claim” means a request to participate in the
Settlement Fund submitted by a Class Member on a Claim Form to the Settlement Administrator in accordance with the terms of the
Settlement Agreement. Each Claim shall be based on the total price of the Class Member’s purchase during the Class Period
of the Chinese-manufactured laminate flooring referenced in the Definition of the Settlement Classes at ¶1.c. and 1.d. herein,
before any taxes or other fees.

 

    	 	- 8 -	 

     

    

 

		h.	“Claim Form”
means the application provided by the Settlement Administrator to Class Members to make a Claim pursuant to this Settlement Agreement.
The Settlement Administrator shall make the Claim Form available online and in print. The Claim Form shall be developed
by the Settlement Administrator and is subject to review and approval by the Parties.

 

		i.	“Claim Deadline” means the date by which all
Claim Forms must be postmarked or received by the Settlement Administrator to be considered timely. The Claim Deadline shall be
120 days after Preliminary Approval.

 

		j.	“Claimant” means a Class Member who has submitted
a Claim by the Claim Deadline.

 

		k.	“Class Counsel” means the Co-Lead Counsel for
the Formaldehyde MDL and the Co- Lead Counsel for the Durability MDL selected to represent the Settlement Classes by the Court.

 

		l.	“Class Member” means all persons in the United
States who purchased Chinese-made laminate flooring from Lumber Liquidators between January 1, 2009 and May 31, 2015. Excluded
from the Classes are (1) Defendant, (2) all present and former affiliates and/or officers or directors of Defendant, (3) the Judge
of this Court, the Judge’s family and staff, (4) all individuals who have already entered a Release and Settlement Agreement
with Lumber Liquidators related to their purchase of the Chinese-made laminate flooring product during the Class Period, (5) contractors,
persons, or other entities who purchased Chinese-manufactured laminate flooring primarily for resale, (6) individuals bringing
Personal Injury Claims as defined below and identified in Exhibit A, and (7) all persons who timely request to be excluded from
the Settlement Class or Settlement Classes in accordance with the provisions of the Notice.

 

		m.	“Class Representatives
for the Formaldehyde MDL Representative Complaint” means Plaintiffs Lila Washington, Maria and Romualdo Ronquillo, Joseph
Michael Balero, Ryan and Kristin Brandt, Devin and Sara Clouden, Kevin and Julie Parnella, and Shawn and Tanya Burke.

 

    	 	- 9 -	 

     

    

 

		n.	“Class Representatives for the Durability MDL Representative
Complaint” means Plaintiffs Erin Florez, Jim Moylen, Kelly Ryan, Karen Hotaling, and Logan Perel.

 

		o.	“Class Period” means January 1, 2009 through
May 31, 2015. The “CARB2/Durability Period” means January 1, 2011 through May 31, 2015. The “CARB1 Period”
means January 1, 2009 through December 31, 2010.

 

		p.	“Complaints” means all lawsuits and claims
transferred to the Formaldehyde MDL and all lawsuits and claims transferred to the Durability MDL.

 

		q.	“Court” means the United States District Court
for the Eastern District of Virginia.

 

		r.	“Days” mean calendar days, excluding federal
holidays.

 

		s.	“Defendant” means Lumber Liquidators, Inc.

 

		t.	“Durability Plaintiffs” shall have the meaning
set forth in the introductory paragraph of this Settlement Agreement.

 

		u.	“Effective Date” means the first date by which
all of the following events shall have occurred:

 

(1)          The
Court has entered the Preliminary Approval Order.

 

(2)          The
Court has entered the Final Approval Order and Judgment approving the Settlement Agreement in all respects, dismissing the Formaldehyde
MDL and the Durability MDL, including all of the Complaints, with prejudice.

 

(3)          The
time for appeal from the Final Approval Order and Judgment shall have expired, or if any appeal of the Final Approval Order and
Judgment as to the Settlement Agreement is taken, that appeal shall have been finally determined by the highest court, including
any motions for reconsideration and/or petitions for writ of certiorari, and which Final Approval Order and Judgment is not subject
to further adjudication or appeal.

 

    	 	- 10 -	 

     

    

 

		v.	“Final Approval and Fairness Hearing” means
the hearing at which the Court will:

 

(1)          Determine
whether to grant Final Approval of this Settlement Agreement;

 

(2)          Consider
any timely objections to this Settlement Agreement and all responses thereto; and

 

(3)          Consider
Class Counsel’s request for an award of attorneys’ fees, costs and expenses.

 

		w.	“Final Approval Order and Judgment” shall mean
the order finally approving this Settlement Agreement and dismissal of the Formaldehyde MDL and Durability MDL, including all
of the Complaints, with prejudice.

 

		x.	“Formaldehyde Plaintiffs” shall have the meaning
set forth in the introductory paragraph of this Settlement Agreement.

 

		y.	“Long Form Notice” means the Notice of Proposed
Settlement of the Formaldehyde MDL and Durability MDL that will be published on the Settlement Administrator’s website.

 

		z.	“Net Settlement Fund” means the Settlement
Fund less (subject to Court approval):

 

(1)          Service
Awards;

 

(2)          Attorneys’
Fees not to exceed 33.33% of the Settlement Fund;

  

(3)          Plaintiffs’
Counsel’s actual costs and expenses related to the Formaldehyde MDL and Durability MDL; and

 

(4)          Notice
and Administrative Expenses.

 

    	 	- 11 -	 

     

    

 

		aa.	“Notice” means, collectively, the communications
by which purchasers of Chinese-made laminate flooring from Lumber Liquidators between January 1, 2009 and May 31, 2015 are notified
of this Settlement Agreement and the Court’s Preliminary Approval of this Settlement Agreement as required by Fed. R. Civ.
P. 23(e).

 

		bb.	“Notice Date” shall be fifteen days after entry
of the Preliminary Approval Order, or as soon as possible thereafter.

 

		cc.	“Notice Plan” means the notice program used
by parties and the Settlement Administrator to inform Class Members about the Settlement Agreement.

 

		dd.	“Party” and “Parties” shall have
the meaning set forth in the introductory paragraph of this Settlement Agreement.

 

		ee.	“Person(s)” shall mean any natural person,
individual, corporation, association, partnership, trust, or any other type of legal entity.

 

		ff.	“Personal Injury Claims” means those claims
filed by plaintiffs in the MDL or in state court as of the deadline for filing an objection or to opt out of the Settlement, and
who are not bound by this settlement. A current list of those Claimants is attached at Exhibit A.

 

		gg.	“Plaintiffs” collectively shall mean the Formaldehyde
Plaintiffs, the Formaldehyde Class, the Durability Plaintiffs, and the Durability Class.

 

		hh.	“Plaintiffs’ Co-Lead Counsel for the Formaldehyde
MDL” means the law firms of Cohen Milstein Sellers & Toll PLLC; Cotchett, Pine & McCarthy, LLP; and Hagens Berman
Sobol Shapiro LLP.

 

		ii.	“Plaintiffs’ Co-Lead Counsel for the Durability
MDL” means the law firms of Robertson & Associates LLP; Whitfield Bryson & Mason LLP and Ahdoot & Wolfson, PC.

 

		jj.	“Preliminary Approval” or “Preliminary
Approval Order” means the Court’s entry of an order of initial approval of this Settlement Agreement.

 

    	 	- 12 -	 

     

    

 

		kk.	“Recitals” means the Recitals set forth above,
which are incorporated by reference and are explicitly made part of this Agreement.

 

		ll.	“Released Claims” shall have the meaning set
forth in Section 15 of this Settlement Agreement.

 

		mm.	“Released Parties” shall have the meaning set
forth in Section 15 of this Settlement Agreement.

 

		nn.	“Releasing Parties” shall have the meaning
set forth in Section 15 of this Settlement Agreement.

 

		oo.	“Request for Exclusion” means a request to
opt-out or be excluded from the Class, timely submitted in accordance with the terms and conditions of this Settlement Agreement
and the instructions provided in the Notice.

 

		pp.	“Service Awards” means cash awards paid to
the Class Representatives for the Formaldehyde MDL Representative Complaint and the Class Representatives for the Durability MDL
Representative Complaint as set forth below in Section 13.

 

		qq.	“Settlement Administrator” means the Angeion
Group.

 

		rr.	“Settlement Agreement” or “Agreement”
or “Settlement” refers to this document, and supersedes any prior agreements or discussions.

 

		ss.	“Settlement Class” or “Settlement Classes”
means the CARB2/Durability Settlement Class and/or the CARB1 Settlement Class, which derive from the Formaldehyde MDL and Durability
MDL pending in the Eastern District of Virginia, as identified herein.

 

		tt.	“Settlement Fund” means a total of $22 million
dollars in cash and $14 million dollars in Store-credit Vouchers. The $22 million in cash shall be paid by Defendant into the
Escrow Fund, as set forth below in Paragraph 4.A. The Store-credit Vouchers shall be provided by Defendant to the Settlement Administrator.

 

    	 	- 13 -	 

     

    

 

		uu.	“Settlement Fund Escrow Account” means an escrow
account established by Class Counsel and supervised by the Court to receive and maintain funds paid pursuant to this Settlement
Agreement for the benefit of the Settlement Class.

 

		vv.	“Store-credit Vouchers” or “Vouchers”
means product vouchers distributed by the Claims Administrator as part of this Settlement Agreement to certain Class Members who
so elect of the CARB2/Durability Settlement Class for their use to purchase product from Lumber Liquidators.

 

		2.	NO ADMISSION OF WRONGDOING

 

A.           This
Settlement Agreement is made to terminate any and all controversies, real or potential, asserted or unasserted, and claims for
injuries or damages or any nature whatsoever, between Defendant and the Plaintiffs. Neither the execution of this Settlement Agreement
or compliance with its terms shall constitute an admission of any fault or liability on the part of the Defendant, or any of the
Released Parties. Defendant does not admit fault or liability of any sort and, in fact, Defendant expressly denies fault and liability.

 

B.           Further,
there has been no consideration or determination as to whether any class pending as part of the Formaldehyde MDL No. 1:15-md-02627
or the Durability MDL No. 1:16- md-02743 would be suitable for class treatment in any form other than as the Settlement Classes
agreed to in this Settlement Agreement. These Settlement Classes are not a concession and shall not be used as an admission that
any class other than these Settlement Classes are appropriate.

 

    	 	- 14 -	 

     

    

 

		3.	COOPERATION BY PARTIES AND REASONABLE BEST EFFORTS TO EFFECTUATE
SETTLEMENT

 

The Parties and their counsel agree
to cooperate fully with each other to promptly execute all documents and take all steps necessary to effectuate the terms and conditions
of this Settlement Agreement. The Parties shall recommend approval of this Settlement Agreement by the Court. The Parties and their
counsel further agree to support the final approval of the Settlement Agreement including against any appeal of the Final Approval
Order and Judgment and including any collateral attack on the Settlement Agreement or the Final Approval Order and Judgment.

 

		4.	CONSIDERATION TO PLAINTIFFS

 

In exchange for the terms and conditions
set forth herein, Defendant will provide the following consideration:

 

A.           Settlement
Fund. Defendant will pay $22 million dollars in cash and $14 million dollars in Store-credit Vouchers for a total of $36 million
to establish a common fund for the benefit of the Settlement Class. The Settlement Fund shall be paid in the following manner:

 

i.             Within
five (5) days of the Court’s Preliminary Approval of the Settlement Agreement, Lumber Liquidators will transfer $500,000.00
to the Settlement Fund Escrow Account to be used to pay for Class Notice and the Settlement Administrator’s fees.

 

ii.            Within
thirty (30) days of the Court’s Final Approval Order and Judgment, Lumber Liquidators will transfer $21,500,000.00 in cash
to the Settlement Fund Escrow Account. To the extent Lumber Liquidators elects to sell/transfer stock to fund the cash obligation,
Plaintiffs agree, at no risk, cost or expense to them, to cooperate with Lumber Liquidators to ensure the process is as expedient
and efficient as possible. To the extent stock is used to fund the Settlement Agreement, the stock qualifies for a Section (a)(10)
exemption of the Securities Act of 1933, as amended (the “Securities Act”). For the avoidance of doubt, the Court must
find and order in its Final Approval Order and Judgment that any stock used to fund the Settlement Agreement is exempt from
registration under Section 3(a)(10) of the Securities Act.

 

    	 	- 15 -	 

     

    

 

iii.           Lumber
Liquidators will work with Class Counsel and with the Settlement Administrator to prepare $14,000,000.00 worth of Store-credit
Vouchers for distribution to eligible Claimants.

 

iv.           The
payments described above constitute the entire payment due from Defendant or any of the Released Parties under the Settlement Agreement.
The Parties agree and acknowledge that none of the Settlement Fund paid by Defendant under the Settlement Agreement shall be deemed
to be, in any way, a penalty or a fine of any kind.

 

v.            A
Settlement Fund Escrow Account shall be established and administered by Class Counsel under the Court’s continuing supervision
and control. No disbursements of funds from the Settlement Fund Escrow Account will occur without order of the Court.

 

vi.           The
Settlement Fund Escrow Account is intended by the Parties to be treated as a “qualified settlement fund” for federal
income tax purposes pursuant to Treasury Reg. 1.468B-1, and to that end, the Parties shall cooperate with each other and shall
not take a position in any filing or before any tax authority that is inconsistent with such treatment.

 

vii.          Defendant
shall have no responsibility or liability relating to the administration, investment, or distribution of the Settlement Fund, which
shall be the sole responsibility of Class Counsel and the Settlement Administrator.

 

B.           Distribution
of the Net Settlement Fund. This is a common fund settlement to be administered on a claims-made basis. In order to be entitled
to participate in the Settlement Fund, a member of the Classes, who has not requested exclusion, must submit a valid Claim on or
before the deadline established by the Court. Any member of the Classes who does not submit a timely, valid Claim shall not be
entitled to share in the Settlement Fund, but nonetheless shall be barred and enjoined from asserting any of the Released Claims
described herein.

 

    	 	- 16 -	 

     

    

 

There shall be two separate classes
of participants: the CARB2/Durability Settlement Class and the CARB1 Settlement Class (sometimes jointly referred to as “Class”
or “Classes”).

 

i.             CARB2/Durability
Settlement Class

 

a.            The
CARB2/Durability Settlement Class will be limited to purchasers of Chinese-made laminate flooring from Lumber Liquidators between
January 1, 2011 and May 31, 2015. Benefits will only be available for Approved Claimants.

 

b.            All
members of the CARB2/Durability Settlement Class will be entitled to make a claim against the Settlement Fund. Claim Forms will
be submitted electronically or by mail and will be administered by the Settlement Administrator.

 

c.            CARB2/Durability
Settlement Class members who submit an Approved Claim will have the option of choosing either a cash award or a Lumber Liquidators’
Store-credit Voucher. Claimants will be limited to one recovery per household, but if multiple purchases were made, the total purchase
price of all purchases will be used to calculate the award.

 

d.            For
CARB2/Durability Settlement Class members electing cash, each household will receive a cash award subject to participation and
eligibility. The cash Settlement Fund will be distributed as follows: For each Approved Claim, the Approved Claimant receives back
a percentage of what he or she paid for the purchase of his or her laminate flooring. That percentage may increase or be reduced
by the Settlement Administrator so as to exhaust but not exceed the Settlement Fund.

 

e.            The
total amount of cash shall not exceed the Settlement Fund described above.

 

    	 	- 17 -	 

     

    

 

(i)            In
the event that the cash fund is not exhausted after all Approved Claims, attorneys’ fees, costs, Service Awards,
and administration costs have been paid, cash Approved Claimants will receive a proportional additional cash payment.

 

(ii)           If
after having paid all attorneys’ fees, costs, Service Awards, and administrative costs, the cash Settlement Fund is reduced
such that it cannot pay Approved Claimants the anticipated amount, the cash payments will be proportionally reduced across the
Approved Claimants.

 

(iii)          If
any amounts remain in the cash Settlement Fund (for example, because of uncashed checks), Class Counsel may seek a cy pres award
to benefit the victims of 2017 hurricanes that struck the U.S. or its territories.

 

f.             For
CARB2/Durability Settlement Class members electing Store-credit Vouchers, Lumber Liquidators will provide Vouchers, good for 3
years from date of issuance, one per household, with the following exceptions based on state escheat laws:

 

(i)            Store-credit
Vouchers issued to Approved Claimants in the following states shall have no expiration date: California, Connecticut, Florida,
Maine, Minnesota, Rhode Island, and Washington.

 

(ii)           Store-credit
Vouchers issued to Approved Claimants in the following states shall have the expiration dates identified below:

 

(a)          Illinois
- 5 year expiration

 

(b)          Maryland
- 4 year expiration

 

(c)          North
Dakota - 6 year expiration.

 

At the time of making the election for Store-credit
Vouchers, or within 20 days thereafter, CARB2/Durability Settlement Class members may designate a family member or nationally recognized
charity to be the recipient of the Store-credit Vouchers. The Settlement Administrator will determine whether a charity is a nationally
recognized charity for purposes of this Settlement. The term “family member,” as defined by the SEC at 17 C.F.R. §
275.202(a)(11)(G)- 1, shall mean:

 

    	 	- 18 -	 

     

    

 

All lineal descendants (including
by adoption, stepchildren, foster children, and individuals that were a minor when another family member became a legal guardian
of that individual) of a common ancestor (who may be living or deceased), and such lineal descendants’ spouses or spousal
equivalents; provided that the common ancestor is no more than 10 generations removed from the youngest generation of family members.

 

g.            Approved
Claimants may use their Store-credit Vouchers to purchase product and have the product shipped to a third party within the United
States. Except as described above, the Store-credit Vouchers will not otherwise be transferrable, nor may they be sold or redeemed
for cash.

 

h.            The
total amount of Store-credit Vouchers will not exceed $14 million in the aggregate.

 

i.             The
Store-credit Vouchers will be distributed as follows: For each Approved Claim, the Approved Claimant receives a voucher that contains
an amount that is a percentage of the price he or she paid for the purchase of his or her laminate flooring. That percentage may
increase or be reduced by the Settlement Administrator to exhaust but not exceed the portion of the Settlement Fund designated
for Store-credit Vouchers.

 

j.             Depending
on the level of eligible participation, the values of the Store- credit Vouchers may increase or decrease so that the full $14
million in Store-credit Vouchers are distributed to electing, Approved Claimants from the CARB2/Durability Settlement Class.

 

    	 	- 19 -	 

     

    

 

ii.            CARB1
Settlement Class

 

a.            The
CARB1 Settlement Class will be limited to purchasers of Chinese- made laminate flooring from Lumber Liquidators between January
1, 2009 and December 31, 2010. Benefits will only be available for Approved Claimants. If a Class Member made a purchase
during both the 2009-2010 CARB1 Settlement Class period and the 2011-2015 CARB2/Durability Settlement Class period, he or she will
be entitled to receive both: (a) the $50 cash benefit described below as a member of the CARB1 Settlement Class; and (b) either
cash or a Store-credit Voucher as a member of the CARB2/Durability Settlement Class based upon the total purchase price of all
purchases made between 2011-2015.

 

b.            Members
of the CARB1 Settlement Class will be entitled to make a claim against the Settlement Fund for $50; provided, however, that a maximum
of $1.0 million in cash will be set aside for the CARB1 Settlement Class.

 

c.            If
the CARB1 Settlement Class Settlement Fund is oversubscribed (i.e., if Approved Claims exceed $1.0 million, such that funds
are insufficient to pay Approved Claimants $50 each), then these cash payments will be proportionally reduced across the Approved
Claimants. If, on the other hand, the $1.0 million cash fund set aside for CARB1 Settlement Class Members is not exhausted by Approved
Claims, the remaining cash will be added to the funds available to pay Approved Claimants of the CARB2/Durability Settlement Class.

 

d.            Claim
forms for CARB1 Settlement Class members will be submitted electronically or by mail, and will be administered by the Settlement
Administrator.

 

e.            CARB1
Settlement Class members who are not also members of the CARB2/Durability Settlement Class may only elect cash and may not elect
Store-credit Vouchers.

 

    	 	- 20 -	 

     

    

  

		5.	PRELIMINARY APPROVAL OF SETTLEMENT AND CONDITIONAL CERTIFICATION
OF SETTLEMENT CLASS

 

Plaintiffs’ Co-Lead Counsel
for the Formaldehyde MDL and Plaintiffs’ Co-Lead Counsel for the Durability MDL shall prepare the motion seeking preliminary
approval of the Settlement Class, and the Parties shall work in good faith to support the motion. The Court shall be asked to approve
the terms and conditions of the Settlement Agreement, the notice to the Class, the method of notice, the claim forms, and the procedure
for submitting claims, and to appoint Class Representatives for the CARB2/Durability Settlement Class and the CARB1 Settlement
Class, and Class Counsel for both of these Settlement Classes, all as part of preliminary approval.

 

		6.	SETTLEMENT ADMINISTRATOR

 

The Settlement Administrator
shall be selected by Plaintiffs’ Co-Lead Counsel for the Formaldehyde MDL and Plaintiffs’ Co-Lead Counsel for the Durability
MDL based on cost, experience and reputation of the proposed administrators. The Settlement Administrator will work to:

 

A.           Provide
Notice to potential Class Members;

 

B.           Maintain
a Settlement website;

 

C.           Process
Claim Forms;

 

D.           Preserve
(on paper or transferred in to electronic format) all Requests for Exclusion, Claim Forms, and any and all other written communications
from Class Members in response to the Notices for a period of one (1) year following the Claim Deadline, or pursuant to further
order of the Court. All written communications received by the Settlement Administrator from Class Members relating to the Settlement
Agreement shall be available and provided upon request to Class Counsel and Counsel for Defendant.

 

E.           Distribute
the proceeds of the Settlement Fund in accordance with the Settlement Agreement;

 

F.           Confirm
the issuance of payment to the Approved Claimants;

 

    	 	- 21 -	 

     

    

 

G.           Provide
any necessary certifications to the Court concerning the administration and processing of the claims; and

 

H.           Respond
to inquiries from Class Counsel, Counsel for Lumber Liquidators, the Court, and Class Members.

 

		7.	NOTICE OF SETTLEMENT AND ADMINISTRATION OF CLAIMS

 

A.           Plaintiffs’
Co-Lead Counsel for the Formaldehyde MDL and Plaintiffs’ Co-Lead Counsel for the Durability MDL shall work with the Settlement
Administrator to prepare the Notice program. It is the Parties’ intent that Class Members receive constitutionally adequate
notice of the Settlement. Plaintiffs’ Co-Lead Counsel for the Formaldehyde MDL and Plaintiffs’ Co-Lead Counsel for
the Durability MDL shall submit to the Court for approval the Notice Plan. The Notice Plan will provide the best notice practicable
under the circumstances of the foregoing actions, conform to all aspects of Federal Rule of Civil Procedure 23, satisfy the Due
Process Clause of the United States Constitution, and comply with the terms and conditions of the Agreement. Plaintiffs’
Co-Lead Counsel for the Formaldehyde MDL and Plaintiffs’ Co-Lead Counsel for the Durability MDL also shall work with the
Settlement Administrator and/or other class notice specialists, as necessary, to prepare drafts of the proposed Class Notice. Lumber
Liquidators shall have the right to review and approve the proposed Class Notice, including the content of the Settlement website.
If any objections to the proposed Class Notice cannot be resolved by the Parties, they shall be submitted to the Court for resolution.

 

B.           Class
Member Information

 

Defendant shall provide Class Counsel
and the Settlement Administrator with information in its possession reflecting the name, e-mail address, telephone number, physical
mailing address, and total value of Chinese-made laminate flooring purchased (collectively, “Class Member Information”)
of each reasonably identifiable person or entity who falls within the definition of the Classes by the time this Agreement is executed.
Defendant warrants and represents that the Class Member Information provided to Class Counsel accurately reflects the information
retained by Defendant in the ordinary course of business.

 

    	 	- 22 -	 

     

    

 

C.           Internet
Website

 

Prior to the Notice Date, the Settlement
Administrator shall establish an Internet website, www.laminatesettlement.com that will inform Settlement Class members of the
terms of this Settlement, their rights, dates and deadlines and related information. The website shall include, in .pdf format
and available for download, the following: (i) the Long Form Notice; (ii) the Claim Form; (iii) the Preliminary Approval Order;
(iv) this Agreement (including all of its Exhibits), (v) the operative Complaints filed in the Formaldehyde and Durability MDLs;
and (vi) any other materials agreed upon by the Parties and/or required by the Court. The Internet website shall provide Settlement
Class Members with the ability to complete and submit the Claim Form electronically. The Internet website shall also make the Claim
Form available for download. Banner ads on the Internet shall direct Class Members to the Settlement website at www.laminatesettlement.com.

 

D.           Toll-Free
Telephone Number

 

Commencing by the Notice Date,
the Settlement Administrator shall establish a toll-free telephone number, through which Settlement Class members may obtain information
about the Formaldehyde MDL and the Durability MDL, the Settlement, and request a mailed copy of the Long Form Notice and/or the
Claim Form, pursuant to the terms and conditions of this Settlement. The Long Form Notice and Claim Form will be mailed to all
persons who request one via the toll-free phone number maintained by the Settlement Administrator.

 

    	 	- 23 -	 

     

    

 

E.           Direct
Notice – United States Mail

 

By the Notice Date, the Settlement
Administrator will send the notice (“Postcard Notice”) by United States Postal Service (“USPS”) first class
mail to all Settlement Class Members for whom a physical mailing address can be identified from the Class Member Information. Each
Postcard Notice will include a claim number and will have a detachable claim form with business reply mail postage included. The
Settlement Administrator shall send one of three versions of the Postcard Notice attached to the Settlement Administrator’s
Declaration at Exhibit B to this Agreement: one for CARB2/Durability Settlement Class Members, one for CARB1 Settlement Class Members,
and one for those who qualify for both the CARB2/Durability and CARB1 Settlement Classes.

 

Prior to
the initial mailing of the Postcard Notice, postal mailing addresses will be checked against the National Change of Address (“NCOA”)
database maintained by the USPS. Postcard Notices that are returned as undeliverable by the USPS and have a forwarding address
will be re-mailed to that forwarding address, and Postcard Notices that are returned as undeliverable by the USPS without a forwarding
address will be subject to address verification (“skip tracing”), utilizing a wide variety of data sources, including
public records, real estate records, electronic directory assistance listings, etc. to locate updated addresses. Postcard notices
will then be re-mailed to updated addresses located through skip tracing.

 

F.           Direct
Notice – E-mail Notice

 

By the Notice Date, the Settlement
Administrator shall e-mail each Settlement Class Member included in the Class Member Information provided by Defendant (“Email
Notice”). The content of the Email Notice shall substantially conform to the information provided in the Claim Form and will
contain a link that the Settlement Class members can click to take them directly to the claim filing page on the settlement agreement
website where they can enter their individualized claim number and confirmation code.

 

    	 	- 24 -	 

     

    

 

G.           Publication

 

By the Notice Date, and subject
to the requirements of this Agreement and the Preliminary Approval Order, the Settlement Administrator will provide Notice to
the Settlement Class as follows: Publishing the publication notice and digital notice pursuant to the Preliminary Approval Order
and as set forth in the Notice Plan described in the Declaration of the Settlement Administrator attached hereto as Exhibit B;
Publishing, on or before the Notice Date, the Long Form Notice on the settlement website (www.laminatesettlement.com), as specified
in the Preliminary Approval Order and as set forth in the Notice Plan described in the Declaration of the Settlement Administrator
attached hereto as Exhibit B; and Providing the Internet address, in the Long Form Notice and the Summary Notice, to the settlement
website (www.laminatesettlement.com).

 

H.           Notice
to Appropriate Federal and State Officials

 

Not later than 10 days after
for the Court enters the Preliminary Approval Order, the Settlement Administrator shall comply with 28 U.S.C. § 1715.

 

I.           Confirmation

 

The Settlement Administrator
is directed to file with the Court and serve upon Class Counsel a declaration confirming the dissemination of the Notice to the
Class has taken place in accordance with this Order no later than fifteen (15) days before the Final Approval and Fairness Hearing.

 

    	 	- 25 -	 

     

    

 

		8.	REQUESTS FOR EXCLUSION

 

A.           Members
of CARB2/Durability Settlement Class and the CARB1 Settlement Class who wish to exclude themselves from their respective Class(es)
must submit a written Request for Exclusion. To be effective, such a request must include the Class Member’s name, mailing
address, e-mail address, the signature of the Class Member, identify their individual counsel (if any), and substantially the following
statement: “I want to opt out of the Class(es) certified in the Lumber Liquidators Chinese-laminate flooring litigation.”
Requests for Exclusion must be submitted via First Class U.S. Mail paid by the Class Member and sent to the Settlement Administrator
at the address provided in the Notice. Requests for Exclusion shall be served not later than thirty (30) days prior to the Final
Approval and Fairness Hearing. Personal Injury Claims already filed in the MDL or State Court and listed in Exhibit A are already
excluded from the Settlement.

 

B.           The
Settlement Administrator shall promptly log each Request for Exclusion that is received, and shall provide copies of the log and
all such Requests for Exclusion to Class Counsel and Counsel for Defendant on a monthly basis and the final list no later than
fifteen (15) days before the Final Approval and Fairness Hearing.

 

C.           Any
Class Member who does not properly and timely mail a Request for Exclusion shall be automatically included in the Settlement Class
and shall be bound by all the terms and provisions of the Settlement Agreement, and any Court order related to the Settlement,
whether or not such Class Member received actual notice or shall have objected to the Settlement, and whether or not such Class
Member makes a Claim upon or participates in the Settlement.

 

D.           If
the number of Requests for Exclusion exceeds a percentage of the total size of the CARB2/Durability Settlement Class and the CARB1
Settlement Class combined, as agreed upon by the Parties hereto, Defendant has the option to terminate this Settlement Agreement.
The confidential opt-out number shall be memorialized in a separate Supplemental Agreement and communicated confidentially to the
Court.

 

    	 	- 26 -	 

     

    

 

E.           The
Class Representatives, Plaintiffs’ Co-Lead Counsel for the Formaldehyde MDL, and Plaintiffs’ Co-Lead Counsel for the
Durability MDL covenant and agree to take no actions, directly or indirectly, designed or intended to influence any putative member
of the Settlement Classes to opt out of the Settlement Agreement, or to assist others in doing so. The Parties acknowledge, however,
that if and when Class Counsel answer Class Member questions pertaining to their respective matters, the Parties’ Settlement,
or the Settlement Agreement or related matters, answering these questions shall not constitute taking action to influence any putative
member of the Classes to opt out of the Settlement or to assist others in doing so.

 

		9.	OBJECTIONS

 

A.           Class
Members who do not request exclusion from the Class may object to the Settlement Agreement. Class Members who choose to object
to the Settlement must file written notices of intent to object with the Court and serve copies of any such objection on counsel
for the Parties, identified in Section 27 unless filed via the Court’s ECF system, such that copies will be transmitted electronically
to these counsel. Any Class Member may appear at the Final Approval and Fairness Hearing, in person or by counsel, and be heard
to the extent permitted under applicable law and allowed by the Court. The right to object to the Settlement must be exercised
individually by an individual Class Member and, except in the case of a deceased, minor, or incapacitated Person or where represented
by counsel, not by the act of another Person acting or purporting to act in a representative capacity.

 

To be effective, an objection to the Settlement
that is filed with the Court must:

 

i.             Contain
a caption that includes the case name and the case number as follows: In Re: Lumber Liquidators Chinese-Manufactured Flooring
Products Marketing, Sales Practices and Products Liability Litigation, MDL No. 1:15-md-02627; or In Re Lumber Liquidators
Chinese- Manufactured Laminate Flooring Durability Marketing and Sales Practices Litigation, MDL No. 1:16-md-2743; or both;

 

    	 	- 27 -	 

     

    

 

ii.           Provide
the name, mailing address, email address, telephone number and signature of the Class Member filing the intent to object, and identify
his or her individual counsel, if any;

 

iii.           Provide
a valid proof of membership in one of the Settlement Classes, or both;

 

iv.          File
a written letter or brief detailing the specific basis for each objection, including any legal and factual support the objector
wishes to bring to the Court’s attention and any evidence the objector wishes to introduce in support of the objection with
the United States District Court for the Eastern District of Virginia not later than thirty (30) days prior to the Final Approval
and Fairness Hearing;

 

v.           Be
served contemporaneously on Plaintiffs’ Co-Lead Counsel for the Formaldehyde MDL, Plaintiffs’ Co-Lead Counsel for the
Durability MDL, and Counsel for Defendant (unless filed via the Court’s ECF system, such that copies will be transmitted
electronically to these counsel);

 

vi.          Contain
the number of class action settlements objected to by the Class Member in the last three years;

 

vii.         State
whether the objecting Class Member intends to appear at the Final Approval and Fairness Hearing, either in person or through counsel.

 

B.           Any
Class Member who does not file a timely and adequate notice of intent to object in accordance with this Settlement Agreement waives
the right to object or to be heard at the Final Approval and Fairness Hearing, unless the Court permits otherwise, and shall be
forever barred from making any objection to the Settlement. To the extent any Class Member objects to the Settlement, and
such objection is overruled in whole or in part, such Class Member will be forever bound by the Final Approval Order and Judgment
of the Court.

 

    	 	- 28 -	 

     

    

 

C.           The
filing of an objection allows Plaintiffs’ Co-Lead Counsel for the Formaldehyde MDL, Plaintiffs’ Co-Lead Counsel for
the Durability MDL, or Counsel for Defendant to request the Court to notice such objecting Class Member for and take his or her
deposition consistent with the Federal Rules of Civil Procedure at an agreed-upon location, and to seek any documentary evidence
or other tangible things that are relevant to the objection. Failure by an objecting Class Member to make himself or herself available
for a deposition or to comply with expedited discovery requests may result in the Court striking the Class Member’s objection
and otherwise denying that Class Member the opportunity to make an objection or be further heard. The Parties reserve the right
to ask the Court to tax the costs of any such discovery to the objecting Class Member or the objecting Class Member’s separate
counsel should the Court determine that the objection is frivolous or is made for an improper purpose.

 

D.           If
the objection is made through an attorney, the written objection must also include: (1) the identity and number of the Class Members
represented by objector’s counsel; and (2) the number of such represented Class Members who have opted out of the Settlement
Class.

 

		10.	REPORT BY SETTLEMENT ADMINISTRATOR

 

A.           No
later than fifteen (15) days before the Final Approval and Fairness Hearing, the Settlement Administrator shall provide to Class
Counsel and Counsel for Defendant the following information:

 

i.             The
number of Notices mailed or sent to Class Members;

 

 

ii.            The
number of Class Members who have submitted Approved Claims for the CARB2/Durability Settlement Class and the CARB1 Settlement Class;

 

    	 	- 29 -	 

     

    

 

iii.           The
number of Class Members who have submitted Requests for Exclusion from the Settlement Classes and the names of such persons;

 

iv.           Any
information about any objections to the Settlement that the Settlement Administrator has not previously forwarded; and

 

v.            Any
other tracking information reasonably requested by Class Counsel or Counsel for Defendant.

 

B.           A
report stating the total number of class members who have submitted timely and valid Requests for Exclusions and the names of such
class members shall be filed by Class Counsel not later than ten (10) days before the Final Approval and Fairness Hearing.

 

		11.	FINAL APPROVAL

 

A.           If
the Court preliminarily approves the Settlement, Class Counsel, with the cooperation of counsel for Defendant, shall submit a motion
for final approval of the Settlement Agreement by the Court at a date set by the Court, but no later than forty-five (45) days
before the Final Approval and Fairness Hearing. The parties may submit supplemental memoranda in support of the motions for final
settlement approval or the awarding of costs and fees at a date set by the Court, but no later than ten (10) days before the Final
Approval and Fairness Hearing.

 

B.           The
Notice to the Class shall contain a date, time and location for the Final Approval and Fairness Hearing to be conducted by the
Court. The Parties shall jointly request the Court to set a hearing on Final Approval of the Settlement Agreement approximately
hundred

(100) days from the date the Court enters an order
granting preliminary approval of the Settlement Agreement.

 

C.           The
Parties shall request the Court upon final approval of this Settlement Agreement, to enter the Final Approved Order and Judgment,
which shall, inter alia:

 

    	 	- 30 -	 

     

    

 

i.             Grant
final approval to the Settlement and Settlement Agreement as fair, reasonable, adequate, in good faith and in the best interests
of the Class(es), and order the Parties to carry out the provisions of this Settlement Agreement;

 

ii.             Dismiss
with prejudice and without costs all Complaints pending in the Formaldehyde MDL and the Durability MDL, including the Representative
Complaints, and dismiss with prejudice and without costs the litigation against Defendant and the Released Parties;

 

iii.           Adjudge
that Releasing Parties are conclusively deemed to have released Defendant and the Released Parties of the Released Claims;

 

iv.           Bar
and permanently enjoin each Class Member who has not timely submitted a Request for Exclusion from prosecuting against the Released
Persons any and all of the Released Claims;

 

v.             Reserve
continuing and exclusive jurisdiction by the Court to preside over any ongoing proceedings relating to the Claims or this Settlement
Agreement;

 

vi.           Determine
under Fed. R. Civ. P. 54(b) that there is no just reason for delay and direct that the Final Judgment as to the Released Parties
to be final and appealable and entered forthwith; and

 

vii.          To
the extent stock will be used to fund the Settlement, find and conclude that the Court has sufficient information before it to
assess the value of the claims and securities to be exchanged in the Settlement. Additionally, conclude that the applicable procedural
and substantive fairness requirements of Section 3(a)(10) of the Securities Act have been satisfied, and find that any such stock
used is exempt from registration under Section 3(a)(10) of the Securities Act.

 

    	 	- 31 -	 

     

    

 

		12.	CLASS COUNSEL FEES AND ADMINISTRATIVE COST

 

A.           Co-lead
Counsel for the Formaldehyde MDL and the Durability MDL may jointly or separately file for costs and fees in this action.
At a time to be set by the Court, but no later than forty-five (45) days before the Final Approval and Fairness Hearing, Class
Counsel may seek an award of attorneys’ fees of up to 33.33% of the Settlement Fund, and for actual costs and expenses, together
with the cost of Notice and administrative costs, to be paid from the Settlement Fund. Co-Lead Counsel for the Formaldehyde MDL
and Co-Lead Counsel for the Durability MDL may jointly or separately file motion(s) for attorneys’ fees, costs, and expenses.

 

B.           Within
thirty-one (31) days of Final Approval Order and Judgment and entry by the Court of an order awarding attorneys’ fees, costs,
and expenses (“Fee, Cost, and Expense Order”), any awarded attorneys’ fees, costs, and expenses shall be paid
to Class Counsel from the Escrow Account by the Escrow Agent, notwithstanding the existence of or pendency of any appeal or collateral
attack on the Settlement or any part thereof or the Fee, Cost, and Expense Order. In the event that the Effective Date does not
occur or the Settlement is terminated pursuant to its terms, or if, as the result of any appeal or further proceedings on remand,
or successful collateral attack, the Fee, Cost, and Expense Order is reversed or modified pursuant to a final court order and attorneys’
fees, costs, and expenses have been paid out of the Escrow Account to any extent, then Class Counsel shall be obligated and does
hereby agree, within ten (10) business days after receiving notice of the foregoing from Defendants’ Counsel or from
a court of appropriate jurisdiction, to refund to the Escrow Account such attorneys’ fees, costs, and expenses that have
been paid, plus interest thereon at the same rate as would have been earned had those sums remained in the Escrow Account. For
avoidance of doubt, however, under no circumstances shall Class Counsel be required to return to the Escrow Account or the Defendant
the $500,000 paid pursuant to section 4(A)(i) to the Settlement Administrator or to any other Notice consultant or provider.

 

    	 	- 32 -	 

     

    

 

		13.	SERVICE AWARDS

 

Subject to approval by the Court,
the following seven (7) Plaintiff households identified in the Formaldehyde MDL representative complaint (A-G below) and the five
(5) Plaintiff households identified in the Durability MDL representative complaint (H-L below) will each receive a Service Award
for their service as named Plaintiffs in the MDLs in the amount of $5,000 each:

 

A.           Lila
Washington (California) (dec.)

 

B.           Maria
and Romualdo Ronquillo (California)

 

C.           Joseph
Michael Balero (California)

 

D.           Ryan
and Kristin Brandt (Florida)

 

E.           Devin
and Sara Clouden (New York)

 

F.           Kevin
and Julie Parnella (Texas)

 

G.           Shawn
and Tanya Burke (Illinois)

 

H.           Erin
Florez (Alabama)

 

I.           Jim
Moylen (California)

 

J.           Kelly
Ryan (Nevada)

 

K.          Karen
Hotaling (New York)

 

L.           Logan
Perel (Virginia)

 

No individual shall be entitled
to more than one Service Award. If a husband and wife, or other co-purchasers were both Plaintiffs, they are entitled to a single
Service Award.

 

		14.	CLAIM PROCESSING AND DISTRIBUTION OF SETTLEMENT

 

A.           Class
Members may electronically complete and sign the appropriate Claim Form and submit it to the Settlement Administrator via an electronic
Claim Form submission process to be established by the Settlement Administrator. Alternatively, Class Members may submit such
Claim Forms via U.S. mail. A Claim Form shall be considered defective if the Claimant fails to timely submit the Claim Form, provide
the required information on the Claim Form, or fails to electronically or physically sign certifying that the Claimant is entitled
to the benefit sought.

 

    	 	- 33 -	 

     

    

 

B.           Within
thirty forty-five (45) days of the entry of the Final Approval Order and Judgment, the Settlement Administrator will notify Class
Counsel of any Class Member who has submitted a deficient Claim Form, and those Class Members will be given ten (10) calendar days
from the date of the deficiency notice to cure the deficiency.

 

C.           Within
sixty (60) days of the Effective Date, the Settlement Administrator will distribute the checks and the vouchers.

 

D.           Cash
payments made pursuant to this Settlement Agreement will be made to Claimants via physical checks mailed to the address provided
on the Claim Form. Alternatively, if elected, Store-credit Vouchers will be mailed to the address provided on the Claim Form. Class
Counsel and Counsel for Defense shall confer before the Settlement Administrator begins to distribute the checks or Store-credit
Vouchers to the Class Members who have submitted an Approved Claim. If an appeal is filed, distribution of Settlement Fund to Claimants
will be stayed until further order by the Court.

 

E.           The
Class Members acknowledge that the Claims process may take longer than described above due to the number of potential Class Members.
The Settlement Administrator will employ all due commercially reasonable speed to distribute claimed cash payments and Store-credit
Vouchers to Approved Claimants as set forth herein.

 

F.           The
Class Members shall be entitled solely to the Settlement Funds and Store- Credit Vouchers for settlement and satisfaction against
Defendant and the Released Parties for the Released Claims, and shall not be entitled to any other payment or relief from
Defendant or the Released Parties. The Class Representatives, Class Members and their counsel, Class Counsel, as well as the Settlement
Administrator will be reimbursed and indemnified solely out of the Settlement Funds. Defendant and the other Released Parties shall
not be liable for any costs, fees, or expenses of any description, including any costs, fees or expenses of the Class Representatives
or their attorneys, experts, advisors, or other representatives of the Class.

 

    	 	- 34 -	 

     

    

 

		15.	RELEASE BY ALL SETTLEMENT CLASS MEMBERS

 

A.           Effective
upon Final Approval, Plaintiffs, for and on behalf of themselves, and every member of the Settlement Classes, every purchaser of
Chinese-manufactured laminate flooring sold by Lumber Liquidators between January 1, 2009 and May 31, 2015, and each of their respective
heirs and assigns, except for those who have requested to be excluded from the Classes pursuant to Section 8 of this Agreement,
and those who as of the Final Approval and Judgment have filed personal injury cases as set out in Exhibit A (hereafter the “Releasing
Parties’), jointly and severally, hereby RELEASE, HOLD HARMLESS, FOREVER DISCHARGE, AND SHALL FOREVER BE ENJOINED FROM PROSECUTION
against Defendant and the Released Parties of any and all claims, causes of action, lawsuits, proceedings, damages, judgments,
losses, penalties, liabilities, rights, obligations, duties, demands, liens, actions, administrative proceedings, warranty claims,
remedies, costs, fees of any kind, expenses, and claims of any kind whatsoever, including based on fraud, whether known or unknown,
continent or unsuspected, disclosed or undisclosed, liquidated or unliquidated, asserted or un- asserted, accrued or un-accrued,
in law, in equity or otherwise, in contract, tort, warranty, strict liability or otherwise, that have been, could have been, or
in the future can or might be asserted in any court, tribunal or proceeding (including but not limited to any claims arising under
federal, state, foreign or common law, including any federal or state consumer protection law or personal injury claim),
by or on behalf of Plaintiffs or any member of the Class, whether individual, direct, class, representative, legal, equitable,
or other type or in any other capacity against Defendant and the Released Parties, which the Releasing Parties ever had, now have,
or may have had, from the beginning of time to the Effective Date, by reason of, arising out of, relating to, or in connection
with the acts, events, facts, matters, transactions, occurrences, statements, representations, misrepresentations, omissions, or
any other matter whatsoever related directly or indirectly to: 1) the Plaintiffs’ and Class Members’ purchase and/or
use of Chinese-manufactured laminate flooring sold by Lumber Liquidators between January 1, 2009 and May 31, 2015; 2) the manufacture,
sale, distribution, labeling, marketing or advertising of Chinese-laminate flooring sold by Lumber Liquidators between January
1, 2009 and May 31, 2015; 3) Defendant’s compliance with state or federal labeling laws and regulations related to the Chinese-laminate
flooring sold by Lumber Liquidators between January 1, 2009 and May 31, 2015; and/or 4) any claim by Plaintiffs of any nature related
to Chinese-manufactured laminate flooring sold by Lumber Liquidators between January 1, 2009 and May 31, 2015 (the “Released
Claims”).

 

    	 	- 35 -	 

     

    

 

The Released Claims, however,
shall not include any claims to enforce the Settlement Agreement, or the request of Class Counsel for fees, costs, and expenses
as set forth in, or as related to, this Settlement Agreement. Nor shall the Released Claims extinguish any existing express warranty
rights that do not pertain to the allegations in the Durability MDL or the Formaldehyde MDL, to the extent they exist.

 

B.           The
“Released Parties” shall include Lumber Liquidators, Inc., its parent, subsidiaries, and affiliates, including but
not limited to, Lumber Liquidators, Holdings, Inc.; Lumber Liquidators Services, LLC; Lumber Liquidators Leasing, LLC; individual
Lumber Liquidators retail stores located throughout the United States; the China Regional Office; Fesco; Pure Air Control
Services; ED Labs; and including but not limited to any controlling persons, associates, affiliates, or subsidiaries and each and
all of their respective past or present officers, members, managers, directors, stockholders, principals, representatives, employees,
attorneys, financial or investment advisors, insurers, consultants, experts, accountants, bankers, testing laboratories, advisors
or agents, heirs, executors, trustees, general or limited partners or partnerships, limited liability companies, members, joint
ventures, personal or legal representatives, estates, administrators, predecessors, successors, and assigns.

 

    	 	- 36 -	 

     

    

 

C.           In
agreeing to the foregoing waiver, the Releasing Parties expressly acknowledge and understand that they may hereafter discover facts
in addition to or different from those which they now believe to be true with respect to the subject matter of the claims released
herein, but expressly agree that they have taken these possibilities into account in electing to participate in this release, and
that the release given herein shall be and remain in effect as a full and complete release notwithstanding the discovery or existence
of any such additional or different facts, as to which the Releasing Parties expressly assume the risk.

 

D.           As
of the Effective Date, by operation of the entry of the Final Approval Order and Judgment, each Class Member who does not file
a valid Request for Exclusion, automatically, upon entry of the Final Approval Order and Judgment, shall be held to have fully
released, waived, relinquished, and discharged the Released Parties from the Released Claims, to the fullest extent permitted by
law, and shall be enjoined from continuing, instituting, or prosecuting any legal proceeding against the Released Parties relating
in any way whatsoever to the Released Claims.

 

    	 	- 37 -	 

     

    

 

E.           The
Releasing Parties, on behalf of themselves and their respective assigns, agree not to sue or otherwise make a claim against
any of the Released Parties that is in any way related to the Released Claims.

 

F.           With
respect to the Released Claims, the Releasing Parties shall expressly waive any and all provisions, rights, and benefits conferred
by any law of any state or territory of the United States which is similar, comparable or equivalent to California Civil Code Section
1543, which provides:

 

A general release does not extend to claims which
the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him
or her must have materially affected his or her settlement with the debtor.

 

		16.	DISMISSAL

 

The Releasing Parties stipulate
and agree that upon the Court’s entry of the Final Approval Order and Judgment, and after expiration of any appeals of that
Order, the following shall be DISMISSED WITH PREJUDICE (except for those Personal Injury cases filed in the Formaldehyde MDL or
in state court and included on Exhibit A):

 

A.           All
cases pending before the Court consolidated in In Re: Lumber Liquidators Chinese-Manufactured Flooring Products Marketing, Sales
Practices and Products Liability Litigation, MDL No. 1:15-md-02627, including any additional filed and/or transferred cases
as of the date of Final Approval Order; and

 

B.           All
cases pending before the Court in In Re Lumber Liquidators Chinese- Manufactured Laminate Flooring Durability Marketing and
Sales Practices Litigation, MDL No. 1:16-md-2743, including any additional filed and/or transferred cases as of the date of
Final Approval Order.

 

    	 	- 38 -	 

     

    

 

		17.	CONFIDENTIALITY

 

Plaintiffs and Class Counsel
agree that they will not affirmatively seek media coverage in print, Internet, or other media regarding this Settlement Agreement,
but may neutrally respond to press or media inquiries by describing the Settlement as a good result for the Settlement Class, or
other substantially similar words. Nothing in this paragraph, however, restricts Class Counsel from:

 

A.           Publishing
the Settlement and the result on their websites;

 

B.           Utilizing
media as set forth in the Court-approved Notice plan;

 

C.           Truthfully
responding privately to inquiries concerning the Settlement from their clients, including Class Members; or

 

D.           Truthfully
responding to any press or media inquiries regarding details of the Settlement.

 

		18.	AMENDMENT

 

This Agreement may be modified,
amended or supplemented only by written agreement signed by or on behalf of all Parties, and if such modification, amendment or
supplement is to be executed and become effective subsequent to the entry of the Preliminary Approval Order, only with the approval
of the Court.

 

		19.	AUTOMATIC TERMINATION OF SETTLEMENT AGREEMENT AND TERMINATION
RIGHTS

 

In the event that this Settlement
Agreement does not become a final, enforceable contract that is approved by the Court and upheld on appeal for any reason:

 

A.           Except
as expressly stated herein, this Settlement Agreement shall automatically become null and void and have no further force or effect,
and all proceedings that have taken place with regard to this Settlement shall be without prejudice to the rights and contentions
of the Parties;

 

    	 	- 39 -	 

     

    

 

B.           If
the Settlement Agreement is not preliminarily or finally approved by the Court, the Parties will resume the litigation of
the referenced MDLs without prejudice as to their procedural status as of August 17, 2017;

 

C.           This
Settlement Agreement, any provision of this Settlement Agreement and the fact of this Settlement Agreement having been made, shall
not be admissible or entered into evidence for any purpose whatsoever; nor will any information produced solely in connection with
any of the Parties’ mediations be admissible;

 

D.           If
this Settlement Agreement; the order preliminarily approving the Settlement Agreement and/or Final Order and Judgment approving
this Settlement Agreement is vacated, materially modified or reversed, in whole or part, this Settlement Agreement will be deemed
terminated, unless the Parties, in their sole discretion within thirty (30) days of receipt of such ruling, agree to proceed with
the Settlement Agreement as modified by the Court or on appeal.

 

E.           If
the Settlement Agreement is terminated, any Settlement Funds in the Settlement Fund Escrow Account or that have come into possession
of the Plaintiffs or Class Counsel, except for any funds paid or owed to the Settlement Administrator or to any other Notice consultant
or provider, or any funds otherwise paid or owed for any Settlement administration or Notice-related purpose, shall be returned
to Defendant within ten (10) Days of termination.

 

F.           This
Section and the Section on Confidentiality shall survive any termination of this Settlement Agreement.

 

		20.	SEVERABILITY

 

With the exception of the provisions
contained in Section 15, 16 and 19, in the event any covenant, term or other provision contained in this Settlement Agreement is
held to be invalid, void or illegal, the same shall be deemed severed from the remainder of this Settlement Agreement and shall
in no way affect, impair or invalidate any other covenant, condition or other provision herein. If any covenant, condition or other
provision herein is held to be invalid due to its scope or breadth, such covenant, condition or other provision shall be deemed
valid to the extent of the scope or breadth permitted by law.

 

    	 	- 40 -	 

     

    

 

		21.	INCORPORATION OF EXHIBITS

 

All attached exhibits are hereby
incorporated by reference as though set forth fully herein and are a material part of the Settlement Agreement.

 

		22.	GOVERNING LAW AND COMPLIANCE WITH TERMS OF SETTLEMENT AGREEMENT

 

All questions with respect to
the construction of this Settlement Agreement and the rights and liabilities of the Parties shall be governed by the laws of the
Commonwealth of Virginia, without giving effect to its law of conflict of laws.

 

The Court shall have continuing
and exclusive jurisdiction to resolve any dispute that may arise with regard to the terms and conditions of this Settlement Agreement,
and the Parties hereby consent to such jurisdiction.

 

		23.	PREPARATION OF SETTLEMENT AGREEMENT, SEPARATE COUNSEL AND
AUTHORITY TO ENTER SETTLEMENT AGREEMENT

 

A.           The
Parties and their counsel have each participated and cooperated in the drafting and preparation of this Settlement Agreement. Hence,
in any construction to be made of this Settlement Agreement, the same shall not be construed against any Party as drafter of the
Settlement Agreement.

 

B.           In
entering this Settlement Agreement, each Party has relied upon the advice of the Party’s own attorneys of choice, and has
not relied upon any representation of law or fact by any other Party hereto.

 

C.           This
Settlement Agreement, including exhibits attached hereto, supersedes any and all prior agreements, including, without limitation,
the MOU, and it constitutes the entire understanding between and among the Parties with regard to the matters herein. There are
no representations, warranties, agreements, or undertakings, written or oral, between the Parties hereto, relating to the
subject matter of this Settlement Agreement which are not fully expressed herein.

 

    	 	- 41 -	 

     

    

 

D.           The
Parties each represent and warrant that each of the Persons executing this Settlement Agreement is duly empowered and authorized
to do so.

 

		24.	COUNTERPARTS

 

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

 

		25.	BINDING EFFECT

 

This Settlement Agreement shall
be binding upon and inure to the benefit of the Parties and to their respective heirs, assigns, and successors-in-interest.

 

		26.	ENTIRE AGREEMENT

 

This Settlement Agreement and
the Supplemental Agreement referenced in 8.D above, represent the entire agreement between the Parties and supersedes all other
oral and written agreements and discussions. Each of the Parties covenants that he, she or it has not entered into this Settlement
Agreement as a result of any representation, agreement, inducement, or coercion, except to the extent specifically provided herein.
Each Party further covenants that the consideration recited herein is the only consideration for entering into this Settlement
Agreement and that no promises or representations of another or further consideration have been made by any Person,

 

		27.	NOTICE

 

All notices, requests,
demands and other communications to the Parties or their counsel required or permitted to be given pursuant to this
Settlement Agreement shall be in writing and shall be delivered personally or mailed postage-prepaid by First Class U.S. Mail
to the following persons at their addresses set forth as follows:

 

    	 	- 42 -	 

     

    

 

	Formaldehyde	 	Durability
	Plaintiffs’ Co-Lead Counsel:	 	Plaintiffs’ Co-Lead Counsel:
	Steven Toll, Esq.	 	Alexander Robertson, IV, Esq.
	Cohen Milstein Sellers & Toll PLLC	 	Robertson & Associates, LLP
	1100 New York Ave, NW	 	32121 Lindero Canyon Rd, Suite 200
	Suite 500 — West Tower	 	Westlake Village, CA 91361
	Washington, DC 20005	 	 

 

	Defendant Lumber Liquidators, Inc.
	Lead Counsel:
	Diane P. Flannery, Esq.
	McGuireWoods LLP
	Gateway Plaza
	800 East Canal Street
	Richmond, VA 23219

 

WHEREFORE, the undersigned, being
duly authorized, have caused this Settlement Agreement to be executed on the dates shown below and agreed that it shall take effect
on the last date of execution by all undersigned representatives of the Parties.

 

[signatures on following page]

 

    	 	- 43 -	 

     

    

 

Dated this 15th day of March, 2018.

 

	Formaldehyde	 	Durability
	Plaintiffs’ Co-Lead Counsel	 	Plaintiffs’ Co-Lead Counsel
	 	 	 
	/s/ Steven Toll	 	/s/ Alexander Robertson, IV
	Steven Toll, Esq.	 	Alexander Robertson, IV,
	Cohen Milstein Sellers & Toll PLLC	 	Esq. Robertson & Associates, LLP
	1100 New York Ave, NW	 	32121 Lindero Canyon Road, Suite 200
	Suite 500 — West Tower	 	Westlake Village, CA 91361
	Washington, DC 20005	 	 
	 	 	 
	/s/ Niall McCarthy	 	/s/ Daniel K. Bryson
	Niall McCarthy	 	Daniel K. Bryson, Esq.
	Cotchett Pitre & McCarthy LLP	 	Whitfield Bryson & Mason LLP
	840 Malcolm Rd #200	 	900 W. Morgan St.
	Burlingame, CA 94010	 	Raleigh, NC 27603
	 	 	 
	/s/ Steve W. Berman	 	/s/ Robert R. Ahdoot
	Steve W. Berman	 	Robert R. Ahdoot
	Hagens Berman Sobol Shapiro LLP (WA-NA)	 	Ahdoot & Wolfson, P.C.
	1918 Eighth Avenue	 	10728 Lindbrook Drive
	Suite 3300	 	Los Angeles, CA 90024
	Seattle, WA 98101	 	 
	 	 	 
	
        Defendant, Lumber Liquidators,
Inc.
	 	 
	 	 	 
	/s/ Lee Reeves	 	 
	Lee Reeves	 	 
	Sr. Vice President, Chief Legal Officer &	 	 
	Corporate Secretary	 	 
	Lumber Liquidators, Inc.	 	 
	3000 John Deere Road	 	 
	Toano, VA 23168	 	 

  

    	 	- 44 -

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