Item 2.02. Results of Operations and Financial Condition.
On May 28, 2020, Lumber Liquidators Holdings, Inc. (the "Company") issued a
press release announcing certain financial and operating results for the quarter
ended March 31, 2020. A copy of the press release is being furnished as Exhibit
99.1 to this report and is incorporated by reference into this Item 2.02.
The information in this Item 2.02, including Exhibit 99.1 attached hereto, is
being furnished and shall not be deemed "filed" for the purposes of Section 18
of the Securities Exchange Act of 1934, as amended ("Exchange Act"), or
otherwise subject to the liabilities of that Section and shall not be
incorporated by reference into any registration statement or other document
pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except
as otherwise expressly stated in such filing.
Item 5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On May 28, 2020, the Company announced that the Board of Directors of the
Company (the "Board") has appointed Charles E. Tyson as President and Chief
Executive Officer and as a member of the Board effective May 27, 2020. Mr.
Tyson, age 58, has served as the Company's Interim President and Principal
Executive Officer since February 5, 2020 and as Chief Customer Experience
Officer since June 2018. Prior to joining the Company, from 2008 to 2017, Mr.
Tyson held various roles at Advance Auto Parts, Inc., including Executive Vice
President, Merchandising, Marketing and Supply Chain from 2013 to 2017 and
Senior Vice President, Merchandising, Replenishment and Marketing from 2011 to
2013.
Mr. Tyson will be entitled to receive an annual base salary of $700,000, subject
to the previously disclosed 25% salary reduction currently in place, and an
annual bonus target of 100% of his base salary. In addition, Mr. Tyson will
receive a $550,000 supplemental equity award, 25% of which will be in the form
of stock options, 25% of which will be in the form of time-based restricted
stock units that vest ratably over four years and 50% of which will be in the
form of performance stock units, in each case pursuant to the terms of our
Amended and Restated 2011 Equity Compensation Plan.
In addition, the Company and Mr. Tyson entered into a Severance Agreement. The
terms of the Severance Agreement are substantially similar to the terms of the
severance agreements entered into by the Company and certain officers of the
Company on July 26, 2018 and described in Item 5.02 of the Company's Current
Report on Form 8-K, filed with the Securities and Exchange Commission on July
28, 2018, which description is incorporated herein by reference. This
description does not purport to be complete and is qualified in its entirety by
reference to the full text of the Severance Agreement, which is attached as
Exhibit 10.1 to this report and is incorporated by reference into this Item
5.02. Additionally, Mr. Tyson has agreed that the temporary reduction in his
base salary does not constitute "Good Reason" (an event that could permit such
officer to resign and receive severance) under his severance agreement with the
Company.
There are no arrangements or understandings between Mr. Tyson and any other
persons, pursuant to which Mr. Tyson was selected as a director. Mr. Tyson has
no family relationship with any director or executive officer of the Company,
and he has no direct or indirect material interest in any transaction required
to be disclosed pursuant to Item 404(a) of Regulation S-K.
In connection with Mr. Tyson's appointment, the previously disclosed interim
compensation arrangements with Mr. Tyson and Nancy A. Walsh, the Company's Chief
Financial Officer, have been terminated. In addition, the Board approved an
increase to Ms. Walsh's base salary to $515,000, subject to the previously
disclosed 25% salary reduction currently in place, and a $125,000 grant of
restricted stock that vests ratably over four years. Additionally, the Severance
Agreement between the Company and Ms. Walsh was amended to provide that the
temporary reduction in base salary would not constitute "Good Reason."
On May 27, 2020, M. Lee Reeves, the Senior Vice President, Chief Legal Officer
and Corporate Secretary of the Company, resigned from the Company to pursue
other opportunities.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
10.1 Severance Agreement, dated as of May 27, 2020, by and between
Lumber Liquidators Holdings, Inc. and Charles E. Tyson
99.1 Press Release dated May 28, 2020.
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