UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No.   )

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Preliminary Proxy Statement

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to §240.14a-12

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Lumber Liquidators Holdings, Inc.
(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 23, 2018

To Our Stockholders:

The Annual Meeting of the Stockholders (the “Annual Meeting”) of Lumber Liquidators Holdings, Inc. will be held on Wednesday, May 23, 2018, at 10:00 a.m., at the Hilton Garden Inn Williamsburg, 1624 Richmond Road, Williamsburg, Virginia, for the following purposes:

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To elect three directors, Douglas T. Moore, Nancy M. Taylor, and Jimmie L. Wade to hold office until the 2021 Annual Meeting of Stockholders and one director, Famous P. Rhodes, to hold office until the 2019 Annual Meeting of Stockholders, until their successors are elected and qualified (Proposal One);

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To ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2018 (Proposal Two);

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To approve a non-binding advisory resolution approving the compensation of our named executive officers (Proposal Three); and

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To consider and act upon any other business which may properly come before the Annual Meeting or any adjournments or postponements thereof.

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Only stockholders of record at the close of business on March 26, 2018 are entitled to notice of, and to vote at, the Annual Meeting.

The foregoing items of business are more fully described in the Proxy Statement accompanying this notice.

Whether or not you plan to attend the Annual Meeting, your vote is very important. Please vote. There are four ways that you can cast your vote — by Internet, by telephone, by mail or in person at the Annual Meeting. Voting by the Internet or telephone is fast and convenient, and your vote is immediately confirmed and tabulated. By using the Internet or telephone, you help us reduce postage and proxy tabulation costs. Please do not return the enclosed paper ballot if you are voting over the Internet or by telephone.

Any stockholder who later finds that he or she can be present at the Annual Meeting, or for any reason desires to do so, may revoke his or her proxy at any time before it is voted.

By order of the Board of Directors,

/s/ M. Lee Reeves

M. Lee Reeves
Secretary

Toano, Virginia
April 6, 2018

Important Notice Regarding the Availability of Proxy Materials
for the STOCKhOLDER Meeting to be Held on MAY 23, 2018.

The proxy statement and the 2017 Annual Report to Stockholders on Form 10-K are available at www.investors.lumberliquidators.com/proxy.

TABLE OF CONTENTS

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PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Lumber Liquidators Holdings, Inc. (the “Company,” “us” or “we”) for use at the 2018 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Wednesday, May 23, 2018, at the time and place set forth in the notice of the meeting, and at any adjournments or postponements thereof.

We are providing access to our proxy materials, including this Proxy Statement, our annual report on Form 10-K and an electronic form of proxy card, primarily over the Internet rather than mailing paper copies of those materials to each stockholder. On or about April 6, 2018, we will mail to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”), which provides website and other information for the purpose of accessing our proxy materials. You may access the proxy materials on the website referred to in the Notice or request a printed or electronic set of the proxy materials. Instructions on how to access the proxy materials through the Internet or to request a printed or electronic copy may be found in the Notice.

Stockholders may vote in any of the following four ways — by Internet, by telephone, in person at the Annual Meeting or, if you requested printed copies of the proxy materials, by signing, dating and mailing the proxy card you receive in the envelope provided.

A properly executed proxy will be voted in the manner directed by the stockholder. If no instructions are specified, proxies will be voted for the director nominees listed in Proposal One, and in favor of Proposals Two and Three. In addition, if other matters properly come before the Annual Meeting or any adjournments or postponements thereof, the persons named in the accompanying proxy and acting thereunder will have discretion to vote on such matters in accordance with their best judgment. The Board does not presently know of any other such business.

Any person has the power to revoke a proxy by submitting a subsequent vote using any of the methods described above, by voting in person at the Annual Meeting, or by giving written notice of revocation to our corporate secretary at any time before the proxy is exercised. Your latest proxy card, telephone vote or Internet proxy with respect to the same shares is the one that will be counted. Please note, however, that if your shares are held of record by a broker, bank or nominee and you wish to vote at the Annual Meeting, you will not be permitted to vote in person unless you first obtain a legal proxy issued in your name from the record holder.

A quorum is necessary for the transaction of business at the Annual Meeting. A quorum exists when a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting is present either in person or represented by proxy at the Annual Meeting. Abstentions, broker non-votes and votes withheld for director nominees will count as “shares present” at the Annual Meeting for purposes of determining whether a quorum exists.

If you own your shares of common stock in street name, which means that your shares are registered in the name of your bank, broker or its nominee, your shares of common stock may be voted even if you do not provide your bank, broker or other nominee with voting instructions. Under the rules of the New York Stock Exchange (“NYSE”), your bank, broker or other nominee may vote your shares of common stock in its discretion on “routine” matters. However, NYSE rules do not permit your bank, broker or other nominee to vote your shares of common stock on proposals that are not considered routine. When a proposal is not a routine matter and your bank, broker or other nominee has not received your voting instructions with respect to such proposal, your bank, broker or other nominee cannot vote your shares of common stock on that proposal. It is called a “broker non-vote” when a bank, broker or other nominee does not cast a vote for a routine or a non-routine matter.

Please note in the absence of your specific instructions as to how to vote, your bank, broker or other nominee may not vote your shares with respect to (1) the election of the director nominees, or (2) the non-binding proposal regarding the approval of the compensation of our named executive officers. Under NYSE rules, these matters are not considered routine matters. Based on NYSE rules, we believe that the ratification of the appointment by the Audit Committee of Ernst & Young LLP as our independent registered public accounting firm is a routine matter for which brokerage firms may vote on behalf of their

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clients if no voting instructions are provided. Therefore, if you are a stockholder whose shares of common stock are held in street name with a bank, broker or other nominee and you do not return your voting instruction card, your bank, broker or other nominee may vote your shares FOR the ratification of the appointment by the Audit Committee of Ernst & Young LLP as our independent registered public accounting firm.

With respect to the election of directors, votes may be cast in favor or withheld. If a quorum is present, such election will be decided by plurality vote of the votes cast at the Annual Meeting, either in person or by proxy; provided, however, that any director so elected that does not receive an affirmative vote of the majority of the votes cast by shares entitled to vote in the election shall submit his/her resignation to the Board. The Board is not legally obligated to accept such resignation and can take other factors into consideration, including but not limited to, the individual’s history on the Board, relevant outside work experience, knowledge of industry, and knowledge of regulatory requirements, and choose to retain the director if the director otherwise received the highest number of shares voted. Therefore, abstentions, broker non-votes or withheld shares will have no effect on the outcome of the election of directors. Brokers may not vote on the election of directors without instructions from the beneficial owners of the shares. Subject to the limitation set forth above, the three nominees for Class III director and the one nominee for Class I director receiving the highest number of votes cast in person or by proxy at the Annual Meeting will be elected.

For approval of the ratification of auditors and the advisory vote on executive compensation, votes may be cast for or against, or you may abstain from voting. If a quorum is present, the votes cast at the Annual Meeting for each of these proposals, either in person or by proxy, must exceed the votes cast against the action for approval. Abstentions and broker non-votes will have no effect on the outcome of such proposals.

Our inspector of elections will tabulate the votes cast by each proxy and in person at the Annual Meeting.

We will bear the cost of the solicitation of proxies for the Annual Meeting. In addition to mailing the proxy materials to stockholders, we have asked banks and brokers to forward copies to persons for whom hold our stock and request authority for execution of the proxies. We will reimburse the banks and brokers for their reasonable out-of-pocket expenses in doing so. Our officers and regular employees, without being additionally compensated, may solicit proxies by mail, telephone, telegram, facsimile or personal contact. All reasonable proxy soliciting expenses will be paid by us in connection with the solicitation of votes for the Annual Meeting.

Our principal executive offices are located at 3000 John Deere Road, Toano, Virginia 23168, and our telephone number is (757) 259-4280.

Record Date and Voting Securities

Only stockholders of record at the close of business on March 26, 2018 are entitled to notice of and to vote at the Annual Meeting. On that date, we had outstanding and entitled to vote 28,539,484 shares of common stock, $0.001 par value per share. Each outstanding share of our common stock entitles the record holder to one (1) vote on each matter.

Directions to Annual Meeting

Directions to attend the Annual Meeting, where you may vote in person, may be obtained by calling Investor Relations at (757) 566-7512. If your shares are held by a bank, broker or other holder of record (commonly referred to as registered in “street name”), you are considered a beneficial owner of those shares rather than a shareholder of record. In that case, you must present proof of your beneficial ownership of our common stock, such as a recent bank or brokerage statement, for admission to the Annual Meeting.

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ELECTION OF DIRECTORS

The Board is currently fixed by resolution of the Board at eight members divided into three classes. The three-year terms of each class are staggered so that the term of one class expires at each annual meeting. The term of office of our Class III directors will end at this year’s Annual Meeting of Stockholders. Our Class I directors’ terms will end at the Annual Meeting of Stockholders in 2019. Our Class II directors’ terms will end at the Annual Meeting of Stockholders in 2020. Each director serves a three-year term and will continue in office until a successor has been elected and qualified, subject to earlier resignation, retirement or removal from office. On December 7, 2017, the Board appointed Famous P. Rhodes to fill a vacancy in Class I directors and will serve the remaining of the Class I term which expires in 2019. Because Mr. Rhodes was appointed in 2017, the Board has determined to nominate Mr. Rhodes for election as a Class I director at this Annual Meeting to serve the remainder of the Class I term.

The following pages set forth information concerning the nominees and the directors whose terms of office will continue after the Annual Meeting including certain experiences, qualifications, attributes and/or skills that led the Board to conclude that each of them should serve as a director.

If any nominee is unable to serve as a director, the persons named in the enclosed proxy reserve the right to vote for a lesser number of directors or for a substitute nominee designated by the Board, to the extent consistent with our Certificate of Incorporation and our Bylaws. All of the nominees listed above have consented to be nominated and to serve if elected. We do not expect that any nominee will be unable to serve.

Should all the nominees be elected to our Board, the director classes after the 2018 Annual Meeting of Stockholders will be as follows:

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PROPOSAL ONE

ELECTION OF THREE CLASS III DIRECTORS AND ONE CLASS I DIRECTOR

The Board, upon the recommendation of the Nominating and Corporate Governance Committee, has (i) nominated Douglas T. Moore, Nancy M. Taylor, and Jimmie L. Wade for re-election to the Board as Class III directors for three-year terms ending in 2021 and (ii) Famous P. Rhodes for election to the Board as a Class I director for a one-year term ending in 2019.

Nominees for Election for Terms Expiring in 2021 (Class III)

Douglas T. Moore, 61, has been a director since April 2006. He currently serves as the president and chief executive officer of Med-Air Homecare, a home healthcare equipment and service provider, and senior vice president of First Street, Inc., a leading direct marketer of products for baby boomers, where he has worked since June 2012. From February 2012 through June 2012, Mr. Moore served as the chief merchandising and marketing officer at hhgregg, Inc. From December 2010 through February 2012, Mr. Moore served as vice president operations for Safelite Group, a subsidiary of Belron, and as the principal of First Street Consulting, LLC. Prior to December 2010, Mr. Moore served as senior vice president, president — appliances for Sears Holdings Corporation. From 2007 to 2008, Mr. Moore served as senior vice president, hardlines — merchandising for Sears where he was the chief merchant for the appliance, lawn and garden, tools, home electronics and sporting goods businesses. Prior to joining Sears, Mr. Moore served for 17 years as a senior executive of Circuit City Stores, Inc., with his last position as executive vice president, chief merchandising officer. Circuit City filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code in November 2008. Mr. Moore has also held operational and consumer marketing positions at AMF Bowling, Inc., A.H. Robins Company, Inc. and the Carnation Company. He received his undergraduate degree and M.B.A. from the University of Virginia.

Through his more than 25 years of retail experience, Mr. Moore has developed an understanding of strategic and tactical business issues that include store operations, merchandising, supply chain, sourcing and human resource planning. He also possesses senior management, marketing, risk assessment and retail knowledge. He has served on our Board for approximately eleven years and has been Chairman of our Nominating and Corporate Governance Committee since our IPO and a member of our Compliance and Regulatory and Affairs Committee since May 2016. Mr. Moore also served as a member of our Audit Committee from our IPO until May 2016. Through his service as a director, Mr. Moore has gained insight, perspective and knowledge regarding our business, growth, operations and personnel.

Nancy M. Taylor, 58, has been a director since April 2014. Ms. Taylor is the former president and chief executive officer of Tredegar Corporation, a manufacturing company, serving in such roles from January 2010 to June 2015, and, during such time, was a member of Tredegar’s board of directors. Prior to such time, she was executive vice president of Tredegar and president of Tredegar Film Products and also had responsibility for corporate development. Ms. Taylor joined Tredegar in 1991 and during her tenure held other senior executive positions, including senior vice president, strategy, vice president, administration, and general counsel. Ms. Taylor received a B.A. from the College of the Holy Cross and a law degree from Catholic University of America.

Ms. Taylor has significant experience as a chief executive officer of a publicly traded international manufacturer. Through her experience, she has gained and developed extensive business, finance and leadership skills. Further, she possesses an understanding of strategic planning, risk assessment and international operations. In addition, she has experience serving as a director of a public company. Ms. Taylor has been a member of our Compensation Committee since May 2014 and a member of our Nominating and Corporate Governance Committee since January 2015. Additionally, Ms. Taylor was appointed Chairperson of our Board in November 2015. Through her service as a director, Ms. Taylor has gained insight, perspective and knowledge regarding our business, growth, operations and personnel.

Jimmie L. Wade, 63, has been a director since September 2011. Mr. Wade served on the board of directors and finance committee of Advance Auto Parts, Inc., an automotive aftermarket parts provider, from September 2011 through May 2016. Mr. Wade joined Advance in February 1994 and served as president from October 1999 through May 2005 and from January 2009 until December 2011. He also held

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several other key senior executive roles with Advance at various times including executive vice president, from May 2005 to December 2008, and chief financial officer from March 2000 to August 2002. Before joining Advance, Mr. Wade worked for S.H. Heironimus, Inc., a regional department store, as vice president, finance and operations. Earlier in his career, Mr. Wade held positions with American Motor Inns, Inc. and KPMG LLP. He also served on the board of directors of Tuesday Morning Corporation, a leading closeout retailer, from July 2014 through November 2017, as well as its audit committee and compensation committee. Mr. Wade holds a B.S. in accounting from Virginia Tech.

Mr. Wade has extensive experience as a senior executive and director of a leading publicly traded specialty retailer that has achieved significant growth during his tenure. Through his experience, he has gained and developed extensive business, finance, distribution, marketing and leadership skills. Further, he possesses an understanding of strategic business planning, risk assessment and store operations. Mr. Wade has served on our Board for more than six years and has been a member of our Audit Committee since November 2011 and has served as Chairman of our Audit Committee and our “audit committee financial expert” since November 2015. Mr. Wade also has served as a member of our Nominating and Corporate Governance Committee since May 2016. Through his service as a director, Mr. Wade has gained insight, perspective and knowledge regarding our business, growth, operations and personnel.

Nominee for Election for Term Expiring in 2019 (Class I)

Famous P. Rhodes, 43, has been a director since December 2017. Mr. Rhodes currently serves as executive vice president and chief marketing officer of Bluegreen Vacations Corporation, a vacation ownership company, serving in such role since August 2017. Prior to assuming his current position, he was vice president of digital marketing and customer experience for AutoNation, Inc., an automotive retailer, from 2015 to 2017 and as vice president of eCommerce for AutoNation, Inc. from 2012 to 2015. Before joining AutoNation, Inc., Mr. Rhodes served as senior director of Yahoo! Autos in 2012 and in several leadership roles for eBay Motors from 2007 to 2012, including senior director from 2011 to 2012. Mr. Rhodes’ experience prior to 2007 includes serving as executive vice president of DXS Financial Services, LP, vice president of Car.com, and manager at KPMG LLP. Mr. Rhodes received a B.A. degree at Texas A&M University and an M.B.A. from Texas Christian University.

Mr. Rhodes brings significant marketing and omni-channel retail experience to the Board. Currently serving as the chief marketing officer of a public retail corporation, and having held other senior executive roles with additional retail companies, Mr. Rhodes has developed operational and leadership aptitude in addition to his significant capability in the areas of digital technology and customer-experience.

The Board of Directors recommends a vote FOR the election of Messrs. Moore and Wade and Ms. Taylor for a three-year term expiring in 2021 and Mr. Rhodes for a one-year term expiring in 2019.

Incumbent Director Whose Term Expires in 2019 (Class I)

W. Stephen Cannon, 66, has been a director since March 2016. Mr. Cannon joined Constantine Cannon LLP, a law firm, in 2005 as the managing partner of Constantine Cannon LLP’s Washington D.C. office and has been chairperson of the firm since 2007. From 1994 to 2005, Mr. Cannon was the senior vice president, general counsel and secretary of Circuit City Stores, Inc., a retailer of consumer electronics, which, at the time, was publicly traded on the New York Stock Exchange. Prior to joining Circuit City, Mr. Cannon served as a partner at the law firm of Wunder, Diefenderfer, Ryan, Cannon and Thelen and spent ten years in government service, including positions at the U.S. Department of Justice and the U.S. Senate Committee on the Judiciary. During the past five years, Mr. Cannon served as a director of Crocs, Inc.

Mr. Cannon has demonstrated significant legal and business expertise through his role as general counsel of Circuit City, a public company with significant retail operations. This experience, among other things, assists the Board with its risk oversight. Mr. Cannon’s legal expertise also provides him with an understanding of various public company requirements, including corporate governance and SEC developments. He also has previous experience serving as a director of Crocs, Inc., a public company. Mr. Cannon has been a member of our Audit Committee and the Chairman of our Compliance and Regulatory Affairs Committee since May 2016.

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Incumbent Directors Whose Terms Expire in 2020 (Class II)

Dennis R. Knowles, 53, has been a director since December 2016. Mr. Knowles has served as our president and chief executive officer since November 2016, and has served as our chief operating officer since March 2016. Prior to assuming the position as our chief operating officer, Mr. Knowles served in various roles at Lowe’s Companies, Inc., a home improvement retailer, from 2001 to 2015, most recently as chief store operations officer from 2012 to 2015 and as senior vice president of store operations and specialty sales from 2010 to 2012. Prior to 2001, Mr. Knowles served as a regional vice president with Payless Cashways.

As a member of our Board and our president, chief executive officer and chief operating officer, Mr. Knowles has experience with and knowledge of, among other things, our business plans, personnel, risks and financial results. Additionally, due to his significant prior retail experience as well as his more than 25 years of leadership experience in store and business operations, Mr. Knowles possesses business, financial and risk management expertise. His experience has also provided him with insight, perspective and knowledge regarding our business, growth, operations and personnel.

David A. Levin, 66, has been a director since May 2017. Mr. Levin has been president and chief executive officer of Destination XL Group, Inc. (“DXLG”), and one of its directors, since April 2000. Mr. Levin has been instrumental in transforming DXLG from a company which exclusively operated Levi Strauss & Co. branded apparel to the largest specialty retailer of big & tall men’s apparel. DXLG recently announced Mr. Levin will be retiring at the end of 2018. From 1999 to 2000, he served as the executive vice president of eOutlet.com. Mr. Levin was president of Camp Coleman, a division of The Coleman Company, from 1998 to 1999. Prior to that Mr. Levin was president of Parade of Shoes, a division of J. Baker, Inc., from 1995 to 1997. Mr. Levin was also president of Prestige Fragrance & Cosmetics, a division of Revlon, Inc., from 1991 to 1995. He also served on the board of directors of Christopher & Banks Corporation, a specialty women’s apparel retailer, from June 2012 until June 2016. Mr. Levin received a B.A. from the University of Iowa.

Mr. Levin brings to the Board more than 30 years of retail experience and extensive experience as the president and chief executive officer of a public retail company. Mr. Levin has developed wide-ranging business and leadership skills in addition to significant experience in the areas of merchandising, marketing and operational issues. Further, he has experience serving on the boards of public companies. Mr. Levin has been a member of our Compensation Committee and our Compliance and Regulatory Affairs Committee since May 2017.

Martin F. Roper, 55, has been a director since April 2006. Mr. Roper retired in April 2018 as the president and chief executive officer of The Boston Beer Company, Inc., a craft brewer, where he had worked since 1994. Prior to assuming his former position as president and chief executive officer of Boston Beer in January 2001, Mr. Roper had served as the president and chief operating officer of Boston Beer since December 1999. Mr. Roper served on the board of directors of Boston Beer from 1999 until his retirement in April 2018. He holds a B.A. in engineering and M.Eng. from Cambridge University and an M.B.A. from Harvard Business School.

As a director and chief executive officer of a publicly traded company, Mr. Roper has senior management, strategic development and financial skills. In addition, Mr. Roper possesses experience in public relations, consumer marketing, investor relations, product development and risk management. Mr. Roper has served on our Board for approximately twelve years and has been Chairman of the Compensation Committee and a member of the Audit Committee since our IPO. His experience as a director has provided him with insight, perspective and knowledge regarding our business, growth, operations and personnel.

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CORPORATE GOVERNANCE

We are committed to having sound corporate governance principles. Our Code of Business Conduct and Ethics, which applies to our directors, officers and employees, our Corporate Governance Guidelines and the charters of the Audit, Compensation, Nominating and Corporate Governance, and Compliance and Regulatory Affairs Committees are available on our website, www.lumberliquidators.com, and are also available in print, free of charge, to any stockholder who requests them. Such requests should be directed to Corporate Secretary, Lumber Liquidators Holdings, Inc., 3000 John Deere Road, Toano, Virginia 23168.

Independence

The Board, in its business judgment, has affirmatively determined that the following seven of its eight current members are independent from us, including under the independence standards contained in rules of the New York Stock Exchange (“NYSE”): Famous P. Rhodes, W. Stephen Cannon, David A. Levin, Douglas T. Moore, Martin F. Roper, Nancy M. Taylor and Jimmie L. Wade. In reaching its conclusion regarding director independence, the Board considered whether we conduct business and have other relationships with organizations of which certain members of the Board or members of their immediate families are or were directors or officers. None of our non-management directors had any transactions, arrangements or relationships with us, other than as directors and stockholders.

Board Leadership Structure — Independent Chairperson

In our history, the offices of chief executive officer and chairperson of the Board have been at times combined and at times separated, and, when separated, the chairperson has at times been a non-employee director and at other times an employee. Our Bylaws currently require that we have a non-executive chairperson of the Board who is an independent director. Specifically, our Bylaws, among other things, require that we have a chairperson of the Board that is (i) not employed in an executive capacity and (ii) deemed independent as defined by the NYSE requirements. As set forth in our Bylaws, on an annual basis, the Board will elect one of its members to the office of Chairperson of the Board. In the event of the Chairperson’s temporary absence or incapacity, the Board will appoint, by resolution, another independent director to preside as chairperson at meetings of stockholders and of the Board. In the case of the Chairperson’s death or permanent inability to act, the Board will elect a Chairperson who is independent from among current directors or appoint a new director to serve as Chairperson, with any such appointment being subject to the provisions of our Certificate of Incorporation. Ms. Taylor, who is an independent director, was first appointed chairperson on November 16, 2015, and continues in that role. We believe having separate Chief Executive Officer and chairperson of the Board positions is the most appropriate structure for our Company and our stockholders. We believe it is appropriate for Mr. Knowles to be able to focus his efforts on serving as our Chief Executive Officer while working closely with our Chairperson of the Board, Ms. Taylor.

In addition to any other duties that may be prescribed to her by the Board, Ms. Taylor, as chairperson of our Board, is responsible for the following functions: (i) timing and agendas for Board meetings; (ii) nature, quantity and timing of information provided to the independent directors by our management; (iii) retention of counsel or consultants who report directly to the Board; (iv) implementation of corporate governance policies and procedures, including assisting the chairpersons of the various Board committees as requested; (v) receiving reports from the Nominating and Corporate Governance Committee regarding compliance with and implementation of corporate governance policies; (vi) evaluating, along with Compensation Committee, the performance of the Chief Executive Officer; and (vii) presiding at all meetings of the Board, including executive sessions of the non-management directors and the independent directors.

Committees of the Board

The Board has established four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, and the Compliance and Regulatory Affairs Committee, each composed of directors the Board has affirmatively determined to be independent. Each committee operates pursuant to a written charter adopted by the Board that sets forth its roles and responsibilities and provides for an annual evaluation of its performance. The charters of all four standing

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committees are available at the investor relations page of our website at www.lumberliquidators.com and will be provided to any stockholder without charge upon the stockholder’s written request to our corporate secretary. Each year, committee and committee chair assignments are made at the Board meeting immediately following the Annual Meeting of Stockholders. The current composition of each committee is as follows:

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Indicates chairperson of the committee.

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The Board may establish such other committees as it deems appropriate, in accordance with applicable law and regulations and our Certificate of Incorporation and Bylaws.

Audit Committee.   The Audit Committee assists the Board in fulfilling the oversight responsibility of the Board to the stockholders relating to the integrity of our financial statements, the qualifications, independence and performance of our independent registered public accounting firm and the performance of the internal audit function. The Audit Committee is directly responsible for the appointment, compensation, retention, evaluation and oversight of the work of our independent registered public accounting firm. The Audit Committee approves procedures for the pre-approval of audit and non-audit services provided to us by any independent auditors. It is also responsible for establishing, publishing, and maintaining and overseeing our “whistleblower” procedures.

The Board, in its business judgment, has determined that all of the current members of the Audit Committee are independent, as determined in accordance with the rules of the NYSE and relevant federal securities laws and regulations. The Board also has determined that all of the Audit Committee members are financially literate as defined by the rules of the NYSE and that Mr. Wade qualifies as an audit committee financial expert as defined by regulations of the Securities and Exchange Commission (“SEC”).

With the exception of Mr. Wade, who served on the audit committee of Tuesday Morning Corporation until November 15, 2017, no member of the Audit Committee served on any audit or similar committee of any other publicly held company in 2017.

Compensation Committee.   The Compensation Committee has overall responsibility for evaluating and approving our executive officer incentive compensation, benefit, severance, equity-based or other compensation plans, policies and programs (with the independent directors of the Board having final approval for the compensation of the Chief Executive Officer). The Compensation Committee may, in its discretion, engage outside consultants to assist in evaluating and determining appropriate compensation levels for our executives. The Compensation Committee has produced an annual report on executive compensation that is included in this Proxy Statement.

In addition to the current members, Peter B. Robinson, who did not stand for re-election to the Board at the 2017 Annual Meeting of Stockholders, served as a member of the Compensation Committee until May 24, 2017, when his term expired. The Board, in its business judgment, has determined that all of the current members of the Compensation Committee are, and each member who served on the Compensation Committee during 2017 was during the period in which he served, independent, as determined in accordance with the rules of the NYSE and any relevant federal securities laws and regulations. Refer to the section titled “Executive Compensation” for additional information.

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Nominating and Corporate Governance Committee.   The Nominating and Corporate Governance Committee assists the Board in implementing sound corporate governance principles and practices. The Nominating and Corporate Governance Committee also is charged with considering and recruiting individuals qualified to become Board members, conducting inquiries into the background, independence and qualifications of any candidates and recommending to the Board the director nominees. In performing these duties, the Nominating and Corporate Governance Committee uses its network of contacts to compile potential candidates, but may also engage, if it deems appropriate, a professional search firm. It also reviews the qualifications and independence of the members of the Board and its various committees on a regular basis and makes any recommendations the committee members may deem appropriate from time to time concerning any recommended changes in the composition of the Board.

The Board, in its business judgment, has affirmatively determined that all of the current members of the Nominating and Corporate Governance Committee are independent, as determined in accordance with the rules of the NYSE.

The Nominating and Corporate Governance Committee will consider stockholder recommendations for candidates to serve on the Board. Stockholders may submit such recommendations to the Nominating and Corporate Governance Committee through the method set forth under “Communications to the Board.” In addition, in accordance with the Bylaws, any stockholder of record entitled to vote for the election of directors at a stockholder meeting may nominate persons for election to the Board, if such stockholder complies with the advance notice provisions of the Bylaws. Such a nomination must be sent to our corporate secretary and include, among other items, (i) the name, age, business address and residence address of each nominee proposed in such notice; (ii) the principal occupation or employment of each such nominee; (iii) the number of shares of capital stock of the Company which are owned of record and beneficially by each such nominee and any affiliates or associates of such nominee (if any); (iv) a description of any agreement, arrangement or understanding of the type described in Article II, Section 17, clause (B)(iv) or (B)(v) of the Bylaws, but as it relates to each such nominee rather than the proposing stockholder; (v) if any such nominee is a party to any compensatory, payment or other financial agreement, arrangement or understanding with any person or entity other than the Company, or has received any compensation or other payment from any person or entity other than the Company, in each case in connection with candidacy or service as a director of the Company, a detailed description of such agreement, arrangement or understanding and its terms or of any such compensation received; (vi) such other information concerning each such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved) or that is otherwise required to be disclosed, under Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder; and (vii) the consent of the nominee to being named in the proxy statement as a nominee and to serving as a director if elected and a representation by the nominee to the effect that, if elected, the nominee will agree to and abide by all policies of the Board as may be in place at any time and from time to time. If the nomination is not timely and in proper form, the nominee will not be considered by the Nominating and Corporate Governance Committee. To be timely for the 2019 Annual Meeting, the nomination must be received within the time frame set forth in “Deadlines for Submission of Stockholder Proposals” below. Nominees for director are selected in the context of an assessment of the perceived needs of the Board at the time and on the basis of, among other things, the following:

Nominees must also be willing to spend the time necessary to discharge their responsibilities appropriately and to ensure that other existing or future commitments do not materially interfere with their responsibilities as members of the Board.

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In determining the composition of the Board, the Nominating and Corporate Governance Committee seeks to include a diverse and complimentary range of skills and experience among our directors. Although it does not have a formal diversity policy, the Nominating and Corporate Governance Committee believes that the presence of differing viewpoints on the Board is a benefit to us. Accordingly, the Nominating and Corporate Governance Committee considers principles of diversity, which include, among other things, diversity in backgrounds, perspectives, expertise and qualifications, when assessing the Board as a whole, and individual director candidates. Additionally, when considering a director standing for re-election as a director nominee, in addition to the above attributes, the Nominating and Corporate Governance Committee considers such individual’s past contribution and future commitment to the Company. The Nominating and Corporate Governance Committee evaluates the totality of the attributes of each director nominee that it considers and does not have established minimum qualifications or attributes. After evaluating any potential director nominee, the Nominating and Corporate Governance Committee makes its recommendations to the full Board, and the Board then determines the director nominees for election. The evaluation process for prospective director nominees is the same for all director nominees, regardless of the source from which the nominee was first identified.

Compliance and Regulatory Affairs Committee.   The Compliance and Regulatory Affairs Committee has overall responsibility for assisting the Board in discharging its oversight of significant regulatory and compliance matters. The Compliance and Regulatory Affairs Committee may, in its discretion, engage outside consultants to advise the Compliance and Regulatory Affairs Committee. In addition to the current members, Mr. Robinson, who did not stand for re-election to the Board at the 2017 Annual Meeting of Stockholders, served as a member of the Compliance and Regulatory Affairs Committee until May 24, 2017, when his term expired. The Board, in its business judgment, has determined that all of the current members of the Compliance and Regulatory Affairs Committee are, and each member who served on the Compliance and Regulatory Affairs Committee during 2017 was during the period in which he served, independent, as determined in accordance with the rules of the NYSE and any relevant federal securities laws and regulations.

Special Committee.   In addition to the standing committees described above, a Special Committee of the Board (the “Special Committee”) was formed in March 2015. Currently, the Special Committee has oversight responsibilities for certain ongoing government investigations. The current members of the Special Committee are Ms. Taylor, who serves as the chairperson, Mr. Roper and Mr. Wade.

Risk Management

We have developed and implemented processes designed to manage risk in our business. The Board’s role in risk management is primarily one of oversight with the day-to-day responsibility for risk management implemented by our management team. The Board regularly reviews information provided by management regarding our business strategy, financial position and operations, and considers associated risks. In addition, the Board executes its oversight role through presentations by management to the Board and through its committees which report regularly to the Board on their activities.

While the Board has principal oversight responsibility for enterprise risk management, the Audit Committee reviews management’s identification of the key risks that we face, including the main controls upon which we rely to mitigate those risks. In particular, the Audit Committee focuses on financial risk, including internal controls, and assesses our risk profile with our management and internal and external auditors. The internal control risk profile drives our internal audit plan. The Audit Committee also handles violations of our Code of Ethics and related corporate policies. The Nominating and Corporate Governance Committee assists in risk management by overseeing our risks relating to our governance structure. The Compensation Committee reviews risks relating to our incentive compensation policies and arrangements. The Compliance and Regulatory Affairs Committee assists in the oversight of risks related to significant regulatory and compliance matters. Further, the Board has the ability to create additional committees.

Compensation Risk Assessment

Among other things, the Compensation Committee reviews our compensation policies and practices to determine whether they subject us to unnecessary or excessive risk. In so doing, the Compensation Committee considers whether such policies and practices are appropriately structured to promote the

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achievement of goals without encouraging the taking of unwarranted or undue risk. Additionally, the Compensation Committee reviews the relationship between our risk management policies and practices and compensation, and evaluates compensation policies and procedures that could mitigate risks relating to our compensation program.

We believe that our compensation programs discussed herein are designed with the appropriate balance of risk and reward in relation to our overall business strategy and do not incent executive officers or other employees to engage in conduct that creates unnecessary or unjustifiable risks. Specifically, our mix of rewards for short-term performance through base salary and annual cash bonus awards and for long-term performance through equity incentive awards supports these compensation objectives. Moreover, we believe that our utilization of these different compensation components allows us to manage the risks inherent with performance-based compensation. Additionally, our use of mitigation tools such as claw back provisions, oversight by an independent committee of non-employee directors and significant vesting periods for equity awards, provide additional risk protection.

Based upon the review of our compensation practices and policies, we have concluded that they do not create risks that are reasonably likely to have a materially adverse effect on the Company.

Board and Committee Attendance and Executive Sessions

During fiscal year 2017, the Board held a total of 14 meetings and took additional actions by unanimous written consent; the Audit Committee held 9 meetings and took additional actions by unanimous written consent; the Compensation Committee held 9 meetings and took additional actions by unanimous written consent; the Nominating and Corporate Governance Committee held 9 meetings; and the Compliance and Regulatory Affairs Committee held 6 meetings. At the meetings of the Board, it is the practice of the Board to hold an executive session without management present, as well as a separate executive session with just the independent directors. At each of these sessions, the Chairperson of the Board presides over such sessions. During fiscal year 2017, each incumbent director attended at least 75% of the meetings of the Board and committees on which he or she served.

Each member of the Board is expected to attend Annual Meetings of Stockholders in person. All of our directors serving at the time, other than Mr. Robinson, attended the 2017 Annual Meeting of Stockholders.

Communications to the Board

Stockholders, employees and other interested parties may contact an individual director, the Board as a group, the Chairperson of the Board, or a specified Board committee or group, including the non-employee directors as a group, at the following address: Corporate Secretary, Lumber Liquidators Holdings, Inc., 3000 John Deere Road, Toano, Virginia 23168, Attn: Board of Directors. We will receive and process communications before forwarding them to the addressee. Directors generally will not be forwarded communications that are primarily commercial in nature, relate to improper or irrelevant topics, or request general information about us, including inquiries regarding employment opportunities.

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EXECUTIVE OFFICERS

The following sets forth biographical information for our executive officers. Such information with respect to our president and chief executive officer, Dennis R. Knowles, is set forth above in the “Proposal One — Election of Class II Directors” section.

Martin D. Agard, 55, has been our chief financial officer since September 2016. Prior to assuming this position, Mr. Agard most recently served as senior vice president and chief financial officer of Kohler Company, a manufacturing company, from April 2013 to October 2015. Prior to April 2013, Mr. Agard served in various roles with Georgia Pacific Corporation, a pulp and paper company, since 2001, most recently as vice president and treasurer from August 2006 to March 2013. He holds a B.S. in Chemistry and Economics from the College of William & Mary and an M.B.A. from the University of Michigan.

Carl R. Daniels, 64, has been our chief supply chain officer since June 2016. Prior to that, he was our senior vice president, supply chain since October 2011. From 2009 to 2011, Mr. Daniels served as senior vice president of supply chain and operations at Harbor Freight Tools, Inc. Prior to assuming this position, he served as vice president of distribution for Michaels, Inc. from 2008 to 2009 and senior vice president of logistics for Retail Ventures Services, Inc. from 2002 to 2008. He holds a B.S. in business administration and industrial management from Youngstown State University.

Mark Gronemeyer, 58, has been our senior vice president, store operations since July 2016. Prior to assuming this position, Mr. Gronemeyer most recently served in a director role at Gander Mountain, an outdoor recreation retailer, from January 2012 to July 2016. He holds a B.A. in Management Systems and Personnel Chemistry and Economics from Buena Vista University.

Michael J. Horn, 63, has been our senior vice president, sales and services since January 2018. From 2002 until January 2018, Mr. Horn was the vice president of pro sales for Lowe’s Companies, Inc., a home improvement retailer. From 1998 to 2002, Mr. Horn held various director-level positions at Lowe’s Companies, Inc. He holds a B.S in Business Administration from Rochester Institute of Technology.

Timothy J. Mulvaney, 49, has been our senior vice president, chief accounting officer since June 2017. Mr. Mulvaney is a certified public accountant and spent the last twenty years in various roles with Media General Inc., a communications company. Since 2012, Mr. Mulvaney served as Media General’s chief accounting officer, and served as its controller since 2009, in each case through the effective time of the merger between Media General and Nexstar Broadcasting Group, Inc. in May 2017. Prior to joining Media General, Mr. Mulvaney spent six years at Ernst & Young LLP. Mr. Mulvaney holds a B.B.A. —  Accounting from the College of William & Mary.

M. Lee Reeves, 50, has been our senior vice president, chief legal officer and corporate secretary since June 2017. Prior to joining the Company, Mr. Reeves was a partner with the law firm of Nexsen Pruet, PLLC from July 2016 to June 2017. Prior to that, Mr. Reeves spent twelve years with Lowes Companies, Inc., a home improvement retailer, ultimately serving as senior vice president, deputy general counsel and assistant secretary. Mr. Reeves holds a B.A. in Finance and a J.D. from Southern Methodist University and, in 2012, completed the Advanced Management Program (AMP) at Harvard University’s Business School.

Susan M. Starnes, 45, has been our senior vice president of strategy and business development since September 2016. Prior to joining the Company, Ms. Starnes served as the senior vice president of services at Guitar Center, Inc., a musical instrument retailer, in 2015 and vice president of services in 2014. From 2002 to 2014, Ms. Starnes held various roles at Lowe’s Companies, Inc., a home improvement retailer, in strategy, merchandising and services, including director, repair services sales and development from 2013 to 2014 and director, pricing and compliance for the installation business from 2010 to 2013. She holds a B.S. in Chemical Engineering from Cornell University and an M.B.A from the Massachusetts Institute of Technology.

Christopher N. Thomsen, 42, has been our senior vice president, chief information officer since August 2016. Prior to joining the Company, Mr. Thomsen served as vice president and chief information officer of Hibbett Sports, Inc, a sporting goods retailer, from 2013 to 2016. From 2006 to 2013, Mr. Thomsen held various IT roles of increasing responsibility at Lowe’s Companies, Inc., a home improvement retailer, where he most recently served as vice president, IT planning and business intelligence from 2012 – 2013. He holds a B.S. in Business Administration of Technical Studies from Bellevue University.

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

Our overall compensation philosophy is to maintain effective compensation programs that are as simple and flexible as possible, and permit us to make responsive adjustments to changing market conditions and other internal and external factors. We strive to provide our executives with compensation that is competitive within our industry. In doing so, we seek to attract and retain the key employees necessary to achieve the continued growth and success of our business while remaining mindful of our desire to control costs. Further, it is our intent to align executive officer pay with stockholders’ interests, recognize individual accomplishments, align executive management behind common objectives and strike a balance between risk and reward in designing our executive compensation programs.

The Compensation Committee of the Board is responsible for implementing and administering our executive compensation plans and programs. In that role, the Compensation Committee reviews our executive officer compensation program every year to review the appropriateness, rationale and continued viability of our compensation philosophies, including the extent to which our programs might encourage employees to take unnecessary or excessive risks that could result in material adverse risk to the Company. In order to assist in that analysis, the Compensation Committee may conduct market analyses of executive officer compensation as it determines necessary in an effort to ensure that our compensation programs meet our objectives. The Compensation Committee has engaged Pearl Meyer (“PM”), a nationally recognized compensation consulting firm, as its compensation consultant and periodically requests PM to provide peer group and industry compensation data and analysis. Decisions relating to the compensation of our executive officers are made by the Compensation Committee. These decisions are also reported to and, in the case of the President and Chief Executive Officer, approved by the independent directors of the Board. The Compensation Committee consults, and expects to continue to consult, with the President and Chief Executive Officer and other members of management in the exercise of its duties. Notwithstanding such consultation, the Compensation Committee retains absolute discretion over all compensation decisions with respect to the executive officers, except with respect to the President and Chief Executive Officer, in which the independent directors of the Board retain final approval.

In determining the compensation of our executive officers, the Compensation Committee evaluates total overall compensation, as well as the mix of salary, cash bonus incentives, equity incentives and other components, using a number of factors including the following:

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our financial and operating performance, measured by attainment of specific strategic objectives and operating results;

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the duties, responsibilities and performance of each executive officer, including the achievements of the areas of our operations for which the executive officer is personally responsible and accountable;

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historical cash and equity compensation levels; and

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compensation competitiveness, internal equity factors and retention considerations.

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Compensation levels for executive officers are differentiated based on the principle that total compensation should increase with an executive officer’s position and responsibilities, while at the same time, a greater percentage of total compensation should be tied to corporate and individual performance as position and responsibilities increase.

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Compensation Report

Late in 2016, the Compensation Committee engaged PM to analyze the competitiveness of our executive officer compensation programs with the expectation that such analysis would assist the Compensation Committee in setting compensation in 2017 in particular with regards to the newly appointed President and Chief Executive Officer, as well as to evaluate the Company’s practice of providing long term incentives through the grant of options and time-based vesting restricted stock awards, the potential for introducing performance-based vesting equity awards and in reviewing the risks of the Company’s compensation practices. The “2017 Compensation Report” was presented to the Compensation Committee in early 2017. The 2017 Compensation Report compared the compensation paid to the Company’s top executives to the compensation paid to their counterparts at the peer companies. The peer group included publicly traded discretionary retailers with revenues and market capitalizations that fell both above and below the Company. The following is a list of companies included in the peer group used for the 2017 Compensation Report:

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Subsequent to the preparation of the 2017 Compensation Report, hhgregg, Inc. and West Marine, Inc. ceased as independent, public companies.

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In its analysis, PM also referenced nationally recognized survey data using annual revenue of $950 million as a target for the scope of the data set. Further, PM continues to provide information about market trends in executive and director pay practices and advise the Compensation Committee on compensation program design.

In setting executive officer compensation for 2017, the Compensation Committee consulted with PM for an understanding of market practices and competitive compensation levels as part of its assessment of the design and competitiveness of the Company’s executive officer compensation packages.

The Compensation Committee, after considering the SEC and NYSE standards, including the six factors set forth in Section 10C-1(b)(4)(i) through (vi) under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and other factors, determined that PM was independent and that its engagement did not present any conflicts of interest. PM also determined that it was independent and free from conflict with respect to the engagement and confirmed this in a written statement delivered to the Chair of the Compensation Committee.

PM reports directly to the Compensation Committee on all work assigned by the Compensation Committee. PM also interacts with management when necessary and appropriate to carry out its assignments. PM, in its discretion, from time to time, seeks confirmation from management regarding the accuracy of information that is included in materials presented to the Compensation Committee.

2017 Compensation Program

During 2015 and 2016 and continuing in 2017, the Company experienced changing business conditions, performance and external legal challenges, leading the Compensation Committee to believe that it was extremely difficult to set reasonable targets for long-term performance expectations. During this same period, the Company experienced a unique set of circumstances in connection with changes in its executive officer leadership that required the Company to take reasonable steps to attract, retain and motivate key personnel. Accordingly, the Compensation Committee determined to focus on stable predictable compensation programs that would attract and retain strong talent, reward short-term performance and provide motivation for improving stockholder value, while attempting to control the costs of these programs given the Company’s recent performance.

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As noted above, in late 2016, the Compensation Committee engaged PM to analyze the Company’s compensation programs. In conducting its overall review and assessment for 2017, the Compensation Committee considered the 2017 Compensation Report provided by PM, as well as the Company’s need to continue to attract and retain competitive leadership during a period of restructuring and rebuilding. The Compensation Committee then determined that no material structural changes to our historical executive officer compensation program were appropriate. As a result, under the leadership of the Compensation Committee, we continued our management of executive officer compensation with the following objectives:

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to maintain a straightforward and flexible program that allows us to make adjustments in response to changes in market conditions and reward performance;

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to provide compensation packages necessary to attract and retain key executive officers to help ensure that we remain competitive;

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to provide non-equity incentive compensation that depends on our financial performance, as compared against established goals, and promotes collaboration and unified focus among our executive officers; and

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to provide an appropriate link between compensation and the creation of stockholder value through equity awards tied to our long-term performance.

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After considering these objectives, the Compensation Committee decided to continue to utilize a mix of base salary, annual cash bonus awards and equity incentive awards in 2017 for our named executive officers. These components of named executive officer compensation were designed to be used together to strike an appropriate balance between cash and equity compensation and between short-term and long-term value creation. Levels of each of these components for each named executive officer other than the President and Chief Executive Officer at such time were set during the fourth quarter of 2016.

The discussion below provides an overview of the Company’s 2017 named executive officer compensation program. In addition, the Company has included a separate description of the actual compensation paid to each named executive officer and the basis for such compensation.

Base Salary.   Base salary levels for our named executive officers are reviewed each year and adjusted based upon a variety of factors including the named executive officer’s tenure with us, scope of responsibility and influence on our operations, individual performance and accomplishments, internal equity, experience, and changes in the competitive marketplace as well as the economic environment and expense considerations. The factors impacting base salary levels are not independently assigned specific weights.

In December 2016, Mr. Knowles, our President and Chief Executive Officer, reviewed the base salary for each named executive officer in place at such time, excluding himself, and presented the Compensation Committee with recommendations regarding changes in the base salaries for such named executive officers, together with a performance assessment and historical compensation information including equity grants and holdings for each named executive officer. The Compensation Committee considered Mr. Knowles’ recommendations in determining the base salaries for all named executive officers in place at such time and, after discussion, approved adjustments to the base salaries of the named executive officers based upon, among other things, their performance, contributions to the Company and competitive factors. In March 2017, the Compensation Committee consulted the 2017 Compensation Report and other information provided by PM and recommended to the Board, and independent directors of the Board approved, an increase in Mr. Knowles’ salary. The Compensation Committee approved all offers, including base salaries, for named executive officers or executive officers being promoted into named executive officer roles. Base salaries for these new or newly promoted employees were set at levels deemed appropriate to attract and motivate such officers after referencing the 2017 Compensation Report.

Annual Cash Bonus Awards.   In 2017, our named executive officers had the opportunity to earn an annual cash bonus award under our Annual Bonus Plan for Executive Management (the “Bonus Plan”). The amounts payable under the Bonus Plan are expressed as a percentage of annual base salary for each participant (the “Target Bonus”). The Target Bonuses are reviewed annually and vary among the Bonus Plan participants based upon, among other things, their responsibilities, ability to influence operations and

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performance, internal equity considerations, and position. The maximum potential annual cash bonus award that our named executive officers could achieve was 200% of their Target Bonus, based only on the achievement of certain objective financial performance measures. Named executive officers that were hired during the year had the opportunity to earn a prorated bonus under the Bonus Plan based upon the duration of their service during the year.

For the 2017 Bonus Plan, the Compensation Committee determined in the fourth quarter of 2016 that the Target Bonuses for each named executive officer would be a defined percentage of his/her Base Salary, and weighted as follows: 50% net sales performance, 20% Adjusted Gross Margin Dollar performance, and 30% on Adjusted Operating Income performance. A scale was established for each component which set percentages of the Target Bonuses that would be paid out depending on our achievement for the year relative to that component. The scales were designed to provide incentive bonuses for superior achievement, while being consistent with the Compensation Committee’s views on the difficulty of achieving that level of performance. The Compensation Committee also determined that if  (i) the Company’s Adjusted Operating Income performance in 2017 fell $0 – $3 million below the minimum Threshold value, the calculated bonus payouts to each individual for net sales and Adjusted Gross Margin Dollar each would be reduced by 25% and (ii) the Company’s Adjusted Operating Income performance in 2017 fell more than $3 million below the minimum Threshold value set forth below, the calculated bonus payouts to each individual for net sales and Adjusted Gross Margin Dollar each would be reduced by 50%. The applicable scales for each component of the 2017 Bonus Plan are set forth below:

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Payouts for performance between Threshold and Target or Target and Maximum are calculated using straight-line interpolation.

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The term “Adjusted Operating Income” is the Company’s operating income adjusted for anticipated and unanticipated one-time expenses related to legal fees and costs, public relations expenses and regulatory fines or settlements pertaining to the 60 Minutes story, CARB, CPSC/CDC, Proposition 65, DOJ and SEC matters, and associated lawsuits; the costs of the Special Committee of the Board of Directors; and certain other extraordinary expenses. The term “Adjusted Gross Margin Dollar” is the Company’s gross margin dollar adjusted for certain unusual expenses by the Compensation Committee, in its discretion. In 2017, the Compensation Committee did not make any adjustments to the Company’s gross margin dollar in determining the Adjusted Gross Margin Dollar. The Compensation Committee retained the discretion to determine those adjustments appropriate for calculating Adjusted Operating Income and Adjusted Gross Margin Dollar so as to fairly react to unknown future events.

In 2017, our actual net sales were $1,028,933,072 resulting in a percent of net sales target bonus awarded for our named executive officers of 97.8%. Based on our 2017 results, our percent of Adjusted Gross Margin Dollar target bonus awarded for our named executive officers was 100.5%, and our percent of Adjusted Operating Income target bonus awarded for our named executive officers was 151.9%. Accordingly, pursuant to the Bonus Plan, amounts equal to 104.5% of each named executive officer’s total bonus opportunity were awarded under the Bonus Plan.

Long-Term Equity Incentive Awards.   The long-term component of our compensation program consists of the grant of equity awards that are intended to create a mutuality of interest with stockholders by motivating our named executive officers to manage our business so that our stockholders’ investment will grow in value over time. The equity awards are also intended to promote retention. Because the benefit received depends upon the performance of our stock price over the term of the equity incentive award, such awards are intended to provide incentives for executive officers to enhance our long-term performance, as reflected in stock price appreciation over the long term, thereby increasing stockholder value.

We currently provide equity awards pursuant to the Amended and Restated Lumber Liquidators Holdings, Inc. 2011 Equity Compensation Plan (the “2011 Plan”), from which we may, among other things, grant stock options, restricted stock awards, and other equity awards. We intend equity awards to be a meaningful portion of our executive officers’ total compensation in order to align their interests with our long-term growth and the creation of stockholder value.

Consistent with past practices, in early 2017, Mr. Knowles provided the Compensation Committee with recommendations regarding equity awards to each executive officer in place at such time, excluding himself. In determining the amounts of the equity awards for named executive officers, with the exception of Mr. Knowles, the Compensation Committee considered the recommendations submitted by Mr. Knowles and an evaluation of the fair value of the equity award in relation to the individual’s total compensation. Additionally, these equity awards were based upon their respective responsibilities and performance as well as retention considerations and compensation levels among our other executive officers. In 2017, we continued our practice developed in 2016 of issuing annual equity grants with a mix of 50% non-qualified stock options and 50% time-based restricted stock, with exceptions made with

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non-annual equity grants in connection with the hiring or promotion of executive officers. The equity grants made in the first quarter of 2017 to our executive officers were a mix of 50% non-qualified stock options and 50% restricted stock awards, which vest ratably over four years. Further, the Compensation Committee consulted the 2017 Compensation Report and other information provided by PM, and considering Mr. Knowles’ promotion to President and Chief Executive Officer during 2016, the Compensation Committee approved (and the Board (excluding Mr. Knowles) agreed with such approval) Mr. Knowles’ equity grant in the second quarter of 2017.

With regard to new executive officers hired during 2017, the Company addressed each situation individually to determine equity grants that the Company believed were sufficient to attract, motivate and retain each individual. Further, the mix of equity awards between non-qualified stock options and restricted stock varied amongst the individuals.

Named Executive Officers.   The following is a summary of the compensation for the named executive officers in 2017. The named executive officers have certain employment or other arrangements discussed below and also may have certain severance arrangements that are discussed in more detail under ‘‘Potential Payments Upon Termination of Change of Control’’ beginning on page 28.

Dennis R. Knowles.   Mr. Knowles joined the Company in March 2016 as Chief Operating Officer and, in November 2016, was promoted to President and Chief Executive Officer. In connection with his promotion to President and Chief Executive Officer, Mr. Knowles’ base salary was increased to $625,000 and his target bonus amount was increased to 100% of his annual base salary. As a result of Mr. Knowles assuming the role of President and Chief Executive Officer in 2016, the Compensation Committee reviewed and benchmarked Mr. Knowles total compensation in early 2017 and recommended adjustments to the Board in March 2017. Based on the recommendation of the Compensation Committee, in March 2017, the independent members of the Board approved the following adjustments to Mr. Knowles total compensation: (i) a base salary increase to $675,000, effective as of April 1, 2017, (ii) a $500,000 grant of restricted stock that cliff vests after three years to be granted three days following the filing of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, and (ii) non-qualified stock options with a cumulative value of  $500,000 that vest ratably over four years to be granted three days following the filing of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2017. In establishing Mr. Knowles’ total compensation for 2017, the Compensation Committee considered, among other matters, information from the 2017 Compensation Report, historical compensation, internal equity, and performance. Mr. Knowles participated in the Bonus Plan in 2017 and, pursuant to the Bonus Plan, received a bonus equal to $705,313.

Martin D. Agard.   During 2017, Mr. Agard received a base salary of  $435,000. Because the equity grant awarded to Mr. Agard in 2016 in connection with his initial hire was intended to cover certain prospective equity grants, Mr. Agard did not receive an equity grant in 2017. Mr. Agard participated in the Bonus Plan in 2017 and, pursuant to the Bonus Plan, received a bonus equal to $272,721.

M. Lee Reeves.   During 2017, Mr. Reeves received a base salary of  $385,000. Mr. Reeves also received an equity grant valued at $700,000, with 50% of such amount in non-qualified stock options and 50% in time-based restricted stock awards. The non-qualified stock options vest ratably over three years and the time-based restricted stock awards vest ratably over four years. Mr. Reeves participated in the Bonus Plan in 2017 on a pro rata basis based upon his date of hire and, pursuant to the Bonus Plan, received a bonus equal to $117,334.

Carl R. Daniels.   In early 2017, as part of the Company’s regular review process described above, Mr. Daniels received a merit increase of 2% in his annual base salary, which increased his annual salary to $343,536. Mr. Daniels also received an equity grant valued at $150,000 in time-based restricted stock awards that vests 100% on the two-year anniversary of the date of grant. This equity grant was awarded to Mr. Daniels in consideration for his waiving of his rights to the severance benefits under his Severance Benefits Agreement, dated November 18, 2015, which rights will be waived upon the vesting of the equity grant. Mr. Daniels participated in the Bonus Plan in 2017 at a target bonus amount equal to 60% of his annual base salary and, pursuant to the Bonus Plan, received a bonus equal to $215,378.

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Marco Q. Pescara.   During 2017, Mr. Pescara received a base salary of  $433,628. Mr. Pescara also received an equity grant valued at $175,000, with 50% of such amount in non-qualified stock options and 50% in time-based restricted stock awards, each of which vests ratably over four years. Mr. Pescara participated in the Bonus Plan in 2017 at a target bonus amount equal to 60% of his annual base salary and, pursuant to the Bonus Plan, received a bonus equal to $271,861. Mr. Pescara resigned from the Company in March 2018.

Clawback Provisions

In December 2016, the Board approved a new Clawback Policy. Under the Clawback Policy, in the event of a restatement of the Company’s financial results (other than a restatement caused by a change in applicable accounting rules or interpretation), a committee consisting of the non-management members of the Board (the “Independent Director Committee”) will review and determine whether any bonus incentive payment, equity award or other compensation awarded or received by an executive officer of the Company, as defined by Rule 16a-1(f) of the Exchange Act, was based on any financial results or operating metrics that were satisfied as a result of such officer’s knowing or intentional fraudulent or illegal conduct. If the Independent Director Committee determines that such executive officer received any bonus, incentive payment, equity award or compensation based on any financial results or operating metrics that were satisfied as a result of such officer’s knowing or intentional fraudulent or illegal conduct, then the Independent Director Committee will recover from such executive officer such compensation (in whole or in part) as it deems appropriate under the circumstances. In determining whether to seek recovery, the Independent Director Committee may take into consideration whether (i) to do so would be unreasonable or (ii) if it would be better for the Company not to do so. In making such determination, the Independent Director Committee will take into account such considerations as it deems appropriate, including the assertion of a clam that may prejudice the interest of the Company, including in any related proceeding or investigation, (iii) the passage of time since the occurrence of the act in respect of the applicable fraud or intentional illegal conduct and (iv) any pending legal proceeding relating to the applicable fraud or intentional illegal conduct. Notwithstanding anything to the contrary in the Clawback Policy, following a restatement of the Company’s financial statements, the Company will recover from the President and Chief Executive Officer and the Chief Financial Officer that which is required to be recovered by Section 304 of the Sarbanes-Oxley Act of 2002.

Additionally, under our equity award agreements, in the event the Compensation Committee determines that an executive officer willfully engaged in conduct harmful to us, the equity award may be forfeited and/or the executive officer may be required to repay any stock acquired or received as a result of the award or any sums realized as a result of the sale of stock acquired or received as a result of the award. Likewise, under the Bonus Plan, the Compensation Committee may require an executive officer to repay all or any portion of an award issued under the Bonus Plan if the Compensation Committee determines that the award was earned based on inaccurate financial objectives, performance data, metrics or other information or that the participant willfully engaged in conduct harmful to us. Furthermore, our equity award agreements with our employees and our Bonus Plan contain clawback provisions that are intended to comply with Section 954 of Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and all regulations and rulemaking thereunder. Specifically, if, as a result of material non-compliance with any financial information required to be reported under securities laws, the Company is required to prepare a restatement of its financial statements and the Compensation Committee determines that such amounts are to be repaid, then any awards or payments made to executives will be forfeited or repaid with the amount of such forfeiture or repayment to be equal to the difference between the award or payment received and the amount, if any, of the award or payment that would have been granted or issued based on the restated financial statements.

Prohibition on Pledging or Hedging Company Stock

Our Insider Trading Policy provides that no insider may pledge the Company’s securities or hold the Company’s securities in a margined account. Further, our policy prohibits our insiders and employees from buying or selling options, warrants, puts and calls or similar instruments on the Company’s securities, selling the Company’s securities short or entering into hedging transactions or similar arrangements with respect to the Company’s securities. For purposes of our Insider Trading Policy, a copy of which can be found on our website, insiders include, among others, our officers and directors.

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Director and Officer Stock Ownership Guidelines

In December 2016, we implemented stock ownership guidelines (the “Ownership Guidelines”) for our non-employee directors and our executive officers (as designated by the Board) in order to align the financial interests of such executive officers and non-employee directors with those of the Company’s stockholders and to further promote the Company’s commitment to sound corporate governance. The stock ownership requirements are as follows:

The participants in the Ownership Guidelines are expected to meet the applicable guideline no more than five years after first becoming subject to them and are expected to continuously own sufficient shares to meet the applicable guideline once attained. Although having five years after first becoming subject to the Ownership Guidelines to meet the applicable guideline, as of December 31, 2017, Messrs. Daniels, Moore, Pescara, Roper and Wade and Ms. Taylor already meet the guideline applicable to each of them. All of our officers and directors were in compliance with the holding guidelines in the Ownership Guidelines in 2017. Stock that may be considered in determining compliance with the Ownership Guidelines includes:

•

Shares owned directly by the participant or indirectly by the participant through (i) his or her immediate family members (as defined in the Ownership Guidelines) residing in the same household or (ii) trusts for the benefit of the participant or his or her immediate family members;

​

•

Vested shares of restricted stock held by the participant;

​

•

Shares underlying vested stock options held by the participant that are “in the money”; and

​

•

Shares held pursuant to the Lumber Liquidators Holdings, Inc. Outside Director Deferral Plan (the “Deferral Plan”) (i.e., deferred stock units).

​

The Compensation Committee is responsible for monitoring the application of the Ownership Guidelines.

2018 Compensation Program

Historically, equity awards granted to named executive officers of the Company were a mix of 50% options and 50% time-based restricted stock. As noted above, in late 2016, the Compensation Committee engaged PM to analyze the Company’s compensation programs. In conducting its review and assessment for 2017, the Compensation Committee considered the 2017 Compensation Report provided by PM, as well as the Company’s need to continue to attract and retain competitive leadership during a period of restructuring and rebuilding. The Compensation Committee then determined that, given the Company’s financial position at that time, strategic initiatives, and other factors including difficulty in setting performance targets, no material structural changes to our historical executive officer compensation program were necessary at that time. However, the Compensation Committee determined to revisit this issue again in 2018.

In early 2018, the Compensation Committee revisited this issue and decided to approve changes to the Company’s long-term incentive compensation for certain of its named executive officers who receive awards in 2018 to further align management’s interests with long-term stockholder interests. Under this revised

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named executive officer compensation program, annual equity awards granted to certain of our named executive officers in 2018 will be a mix of  (i) 50% performance-based restricted stock, (ii) 25% time-based restricted stock and (iii) 25% non-qualified stock options.

For the performance-based restricted stock granted in 2018, 50% will vest based on obtaining an adjusted EBITDA goal and 50% will vest based on obtaining an adjusted operating margin target. The 2018 performance-based restricted stock awards will be structured as a two-year performance period plus time-based vesting with 50% of any shares earned vesting at the end of the two-year performance period with the remaining 50% of any earned shares vesting at the end of the third year.

Tax Deductibility Under Section 162(m)

Section 162(m) of the Internal Revenue Code generally precludes a tax deduction by any publicly held company for compensation paid to any “covered employee” to the extent the compensation paid to such covered employee exceeds $1 million during any taxable year of the company. The Tax Cuts and Jobs Act was enacted in the United States in December 2017 and included changes to Section 162(m) of the Internal Revenue Code effective in 2018. Prior to 2018, “covered employees” included the Chief Executive Officer of the Company and the three other highest paid officers of the Company (other than the Chief Financial Officer). For 2018 and later years, “covered employees” will include the Chief Executive Officer of the Company, the Chief Financial Officer of the Company, the three highest paid officers of the Company (other than the Chief Executive Officer and the Chief Financial Officer) and any employee who qualified as a “covered person” for any tax year beginning after 2016. For years beginning prior to January 1, 2018, the $1 million deduction limit did not apply to “qualified performance-based compensation” that is based on the attainment of pre-established, objective performance goals established under a stockholder-approved plan. Effective for the years beginning on or after January 1, 2018, there is no exception for “qualified performance-based compensation” from the Section 162(m) limitation; but, a transition rule provides that the “qualified performance-based compensation” exemption will continue to apply to awards that were made on or before October 2, 2017 pursuant to a legally binding contract in effect at such time that is not materially modified thereafter. We consider the impact of the deduction limit under Section 162(m) when developing and implementing our executive compensation programs. We intend to design our executive compensation arrangements to be consistent with our best interests and the interests of our stockholders. We believe that it is important to preserve flexibility in administering compensation programs to promote various corporate goals. Accordingly, we have not adopted a policy that all compensation must qualify as deductible under Section 162(m) of the Internal Revenue Code. Amounts paid under our compensation programs may not be deductible as the result of Section 162(m). To the extent we determine it to be consistent with our best interests and the interests of our stockholders, we intend to preserve, to the extent practicable, the applicability of the transition rule to awards that were granted on or before October 2, 2017. However, there is no guaranty that such transition status can or will be applicable.

Retirement, Deferred Compensation and Pension Plans

Our executive officers who are eligible may participate at their election in our 401(k) retirement savings plan that provides all employees with an opportunity to contribute up to 50% of their eligible compensation, subject to Internal Revenue Service limitations, to the plan on a tax-deferred basis to be invested in specified investment options and distributed upon their retirement. In addition, a Roth feature allows all employees to contribute up to 50% of their eligible compensation on an after tax basis. Consistent with the 401(k) plan, in 2016, we matched 100% of the first 3% of employee contributions and 50% of the next 2% of employee contributions. This matching contribution was allocated to both traditional 401(k) deferrals and Roth contributions. Employees are immediately 100% vested in the Company’s matching contributions. In 2017, Messrs. Agard, Pescara, Reeves and Daniels contributed to the 401(k) plan and received matching contributions consistent with our company-wide program described above.

The Board has not adopted any plans for the deferral of executive compensation or for the payment of defined benefits or pensions based on an executive officer’s salary and/or years of service. In addition, we have not adopted a supplemental executive retirement plan or other “excess plan” that pays benefits to highly compensated executives whose salaries exceed the Internal Revenue Service’s maximum allowable salary for qualified plans.

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Advisory Votes on Executive Compensation

At the 2017 Annual Meeting, the stockholders voted in favor of an annual say-on-pay vote and the Company has elected to follow such advisory vote. Accordingly, at the Company’s 2017 Annual Meeting of Stockholders, the Compensation Committee considered the results of the advisory vote by stockholders on executive compensation, or the “say-on-pay” vote. 88.8% of votes cast were in favor of the compensation program offered to the Company’s named executive officers. The Compensation Committee reviewed the ‘‘say-on-pay’’ voting results and considered other factors in assessing the Company’s executive compensation program as discussed in the Proxy Statement. After considering these voting results and factors, the Compensation Committee reviewed and recommended to the Board, and the Board implemented, similar objectives, program and rationale for the compensation of our named executive officers in 2017, as disclosed in the Compensation Discussion and Analysis, the compensation tables and the accompanying compensation narrative.

As required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the subsequent rules and regulations promulgated by the SEC, we are including a non-binding advisory resolution approving the compensation of our named executive officers. The vote on this proposal will be non-binding on the Board and us and will not be construed as overruling a decision by the Board or us. This vote will not create or imply any change to our fiduciary duties or create or imply any additional fiduciary duties for the Board or us. However, the Compensation Committee values the opinions that our stockholders express in their votes and will consider the outcome of the vote when making future decisions on executive compensation, as it deems appropriate.

Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based upon that review and discussion, the Compensation Committee recommends to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, for filing with the Securities and Exchange Commission.

COMPENSATION COMMITTEE

Martin F. Roper, Chairperson
David A. Levin
Nancy M. Taylor

Compensation Committee Interlocks and Insider Participation

None of the members of our Compensation Committee will be or have ever been one of our officers or employees. None of our executive officers serves or has served as a member of the board of directors or compensation committee, or similar committee, of any other company whose executive officer(s) served as a member of our Board or our Compensation Committee.

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Annual Compensation of Named Executive Officers

Summary Compensation Table

The following table and descriptions set forth information concerning compensation paid to or earned by the one (1) president and chief executive officer and the one (1) chief financial officer who served during 2017, and the three other most highly compensated individuals who were serving as our executive officers at the end of the 2017 fiscal year and whose annual salary and bonus exceeded $100,000 during the 2017 fiscal year. We refer to these individuals throughout this Proxy Statement as our named executive officers.

Summary Compensation Table

(1)

The amounts in this column reflect the aggregate grant date fair value of stock and option awards granted during the year computed in accordance with ASC 718, Compensation-Stock Compensation. For a discussion of the assumptions relating to these valuations, see Note 7 — Stock-Based Compensation to our audited financial statements included in Item 8 of the Form 10-K filed with the SEC on February 27, 2018.

​

(2)

The amounts in the column reflect annual cash bonus awards through our non-equity incentive plan, referred to as our “Bonus Plan,” earned in the year noted but typically paid in the first quarter of the following year.

​

(3)

Mr. Knowles was not a named executive officer in 2015. All other compensation includes $15,415 and $7,815 in health benefits, group health plan contributions and life insurance premiums for 2017 and 2016, respectively, and $45,821 in relocation expense reimbursement in 2016.

​

(4)

Mr. Agard was not a named executive officer in 2015. All other compensation includes $11,416 and $1,028 in health benefits, group health plan contributions and life insurance premiums in 2017 and 2016, respectively, $91,979 and $35,205 in relocation expense reimbursement in 2017 and 2016, respectively, and $12,046 in 2017 in matching contributions to our 401(k) plan.

​

(5)

Mr. Reeves was not a named executive officer in 2016 or 2015. All other compensation in 2017 includes $4,279 in health benefits, group health plan contributions and life insurance premiums, $3,850 in matching contributions to our 401(k) plan and $175,604 in relocation expense reimbursement.

​

(6)

In 2015, pursuant to a retention agreement between the Company and Mr. Daniels, Mr. Daniels became entitled to receive a cash bonus of  $98,000 on December 31, 2016, which was paid in early

​

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2017. All other compensation includes $5,861, $4,130 and $4,491 in health benefits, group health plan contributions and life insurance premiums for 2017, 2016 and 2015, respectively, and $10,842, $7,503 and $7,123 in matching contributions to our 401(k) plan for 2017, 2016 and 2015, respectively.

(7)

All other compensation includes $17,411, $16,222 and $12,758 in health benefits, group health plan contributions and life insurance premiums for 2017, 2016 and 2015, respectively, and $10,365, $10,340 and $10,343 in matching contributions to our 401(k) plan for 2017, 2016 and 2015, respectively. Mr. Pescara resigned from the Company in March 2018.

​

Grants of Plan-Based Awards

The following table provides information on grants of plan-based awards made to our named executive officers during fiscal 2017:

Grants of Plan-Based Awards for Fiscal Year 2017

(1)

These amounts reflect the potential range of payments for 2017 under the Bonus Plan. The actual payments are reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.

​

(2)

The amounts reflect the threshold payments under the Bonus Plan, which are 25% of the Target Bonus.

​

(3)

The amounts reflect the greatest potential payments under the Bonus Plan, which are 200% of the Target Bonus for all of the named executive officers.

​

(4)

Bonus amounts are prorated based on a service period beginning June 29, 2017.

​

(5)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of May 5, 2017.

​

(6)

The grants provided for full vesting on May 5, 2020, the third anniversary of the date of grant.

​

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(7)

The grants provided for full vesting on February 24, 2019, the second anniversary of the date of grant.

​

(8)

The grants provided for vesting in equal annual amounts on the first three anniversary dates following the date of grant of August 4, 2017.

​

(9)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of August 4, 2017.

​

(10)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of February 24, 2017.

​

Discussion of the Summary Compensation Table and Grants of Plan-Based Awards Table

The named executive officers have certain employment or other arrangements discussed below and also may have certain severance arrangements that are discussed in more detail under “Potential Payments Upon Termination of Change of Control” beginning on page 28.

Letter Agreement with Dennis R. Knowles.   At the time of his hire as Chief Operating Officer, we entered into an offer letter agreement with Mr. Knowles, which was subsequently amended in November 2016 in connection with his appointment to President and Chief Executive Officer, which set forth his base starting salary (which was increased in November 2016 in connection with his appointment to President and Chief Executive Officer and, as discussed above, again in April 2017), other compensation matters in connection with his hire and certain initial terms relating to his employment. The letter agreement, as amended, further provides that the Compensation Committee intends to review and benchmark Mr. Knowles total compensation in early 2017, including a consideration of additional equity grants in 2017, with such equity award, as previously discussed, issued in May 2017.

Letter Agreement with Martin D. Agard.   At the time of his hire, we entered into an offer letter agreement with Mr. Agard which set forth his base starting salary, other compensation matters in connection with his hire and certain initial terms relating to his employment.

Letter Agreement with M. Lee Reeves.    At the time of his hire, we entered into an offer letter agreement with Mr. Reeves which set forth his starting base salary, other compensation matters in connection with his hire and certain initial terms relating to his employment.

Letter Agreement with Carl R. Daniels.    At the time of his hire, we entered into an offer letter agreement with Mr. Daniels which set forth his base starting salary, other compensation matters in connection with his hire and certain initial terms relating to his employment.

Letter Agreement with Marco Q. Pescara.    At the time of his hire, we entered into an offer letter agreement with Mr. Pescara which set forth his base starting salary, other compensation matters in connection with his hire and certain initial terms relating to his employment.

For additional information concerning our executive compensation policies, see “Compensation Discussion and Analysis” above.

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Outstanding Equity Awards at Fiscal Year-End 2017

The following table sets forth the outstanding equity awards as of the end of the 2017 fiscal year for each of our named executive officers:

Outstanding Equity Awards at Fiscal Year-End 2017

(1)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of March 3, 2016.

​

(2)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of August 1, 2016.

​

(3)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of May 5, 2017.

​

(4)

The grants provided for full vesting on May 5, 2020, the third anniversary of the date of grant.

​

(5)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of November 3, 2016.

​

(6)

The grants provided for vesting in equal annual amounts on the first three anniversary dates following the date of grant of August 4, 2017.

​

(7)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of August 4, 2017.

​

(8)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of November 17, 2011.

​

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(9)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of March 1, 2013.

​

(10)

The grant provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of March 1, 2014.

​

(11)

The grant provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of March 1, 2015.

​

(12)

The grants provided for vesting in equal annual amounts on the first three anniversary dates following the date of grant of August 10, 2015.

​

(13)

The grants provided for full vesting on February 24, 2019, the second anniversary of the date of grant.

​

(14)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of March 11, 2010.

​

(15)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of March 3, 2011.

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(16)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of March 22, 2012.

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(17)

The grants provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of August 10, 2015.

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(18)

The grant provided for vesting in equal annual amounts on the first four anniversary dates following the date of grant of February 24, 2017.

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Option Exercises and Stock Vested for 2017

The following table provides information concerning the exercises of stock options and the vesting of restricted stock during the fiscal year 2017 on an aggregated basis for each of our named executive officers:

Option Exercises and Stock Vested for Fiscal Year-End 2017

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Potential Payments Upon Termination or Change of Control

We have agreed to provide payments or other benefits to our named executive officers under certain scenarios related to a termination of employment. This section describes those payments and benefits and events that trigger them.

Dennis R. Knowles.    Under Mr. Knowles’ offer letter agreement, as amended, if he is terminated “without cause” (as defined in his agreement) within 18 months of his hire date, he will receive severance compensation of 52 weeks’ base salary. Because, as of December 31, 2017, Mr. Knowles had been with the Company for more than 18 months, Mr. Knowles was not entitled to any severance under his offer letter as of December 31, 2017.

Martin D. Agard.    Under Mr. Agard’s offer letter agreement, if he is terminated “without cause” within 18 months of his hire date, he will receive severance compensation of 52 weeks’ base salary. If Mr. Agard’s employment had been terminated without cause as of December 31, 2017, this amount would have been $435,000.

M. Lee Reeves.    Under Mr. Reeves’ offer letter agreement, if he is terminated “without cause” within 18 months of his hire date, he will receive (i) severance compensation of 52 weeks’ base salary and (ii) if Mr. Reeves elects to continue health and dental insurance through COBRA continuation coverage, the Company agrees to pay, for a period of up to 52 weeks, a portion of the premium cost such that Mr. Reeves’ premium payment does not exceed what he would otherwise have paid if he were employed by the Company at the time of each such payment. If Mr. Reeves’ employment had been terminated without cause as of December 31, 2017, this amount would have been $398,517, which includes certain group health insurance benefits pursuant to the terms of COBRA.

Carl R. Daniels.    In 2015, Mr. Daniels executed a severance benefit agreement, which entitles him to (i) 52 weeks of pay at his regular base rate at the time of such termination provided that he is terminated “without cause” (as defined in the severance benefit agreement) and (ii) if Mr. Daniels elects to continue health and dental insurance through COBRA continuation coverage, the Company agrees to pay, for a period of up to 52 weeks, a portion of the premium cost such that Mr. Daniels’ premium payment does not exceed what he would otherwise have paid if he were employed by the Company at the time of each such payment. However, as discussed above, in consideration for his acceptance of the equity grant awarded to him in February 2017, Mr. Daniels will waive his rights to such severance once the equity grant is vested. If Mr. Daniels’ employment had been terminated without “cause” as of December 31, 2017, whether or not related to a change of control, this amount would have been $348,639, which includes certain group health insurance benefits pursuant to the terms of COBRA.

Marco Q. Pescara.    Under Mr. Pescara’s offer letter agreement, if he is terminated other than for “cause” (as defined in his agreement), he would be entitled to receive a severance payment equal to one year’s base salary and bonus. If Mr. Pescara’s employment had been terminated other than for “cause” as of December 31, 2017, this amount would have been $433,628. Mr. Pescara resigned from the Company in March 2018 and received no severance payments in connection with his resignation.

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In addition to the payments and benefits described above, the agreements pursuant to which equity awards have been granted to the named executive officers contain provisions for accelerated vesting (i) upon a change in control of the Company or (ii) upon a change in control of the Company and the termination of the named executive officer’s employment with the Company (or any related company) for “good reason” or such termination is not a “termination for cause”, depending on the award agreement applicable to a particular equity award. The following table shows the value, as of the end of the 2017 fiscal year, to our named executive officers of unvested stock awards where the vesting would accelerate upon a change in control:

(1)

Upon change in control, 100% of the unvested options or awards vest.

​

(2)

Represents the value of unvested stock options and awards based on the closing price of our common stock on December 29, 2017, the last business day of 2017, which was $31.39.

​

Pay Ratio

As required by Item 402(u) of Regulation S-K, we are providing the following information regarding pay ratios. Our pay ratio is a reasonable estimate and has been calculated in a manner consistent with SEC rules based on the methodology described below. For the year ended December 31, 2017:

•

The median of the annual total compensation of all of our employees (other than Mr. Knowles, our President and Chief Executive Officer), was $44,868;

​

•

The annual total compensation of Mr. Knowles was $2,382,332; and

​

•

Based on the information above, the ratio of the annual total compensation of our President and Chief Executive Officer to the median of the annual total compensation of all employees is 53.1 to 1.

​

The methodology that we used and the material assumptions, adjustments and estimates that we used to identify the median and determine annual total compensation were as follows:

Employee population.    As of December 22, 2017, our employee population consisted of approximately 2,109 individuals, with 2,043 employees, representing approximately 97% of our total employee population located in the United States and 66 employees, representing approximately 3% of our total employee population, located outside of the United States. Our employee population for purposes of determining the pay ratio described above was 2,043, after taking into consideration the de minimis

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adjustment permitted by the SEC rules. We excluded approximately 30 individuals that are located in Canada and approximately 36 individuals that are located in China under the de minimis exception because these non-U.S. employees account for less than 5% of our total employees.

Identification of Median.    To identify the median of the annual total compensation of all of our employees (other than Mr. Knowles), we reviewed the annual wages of each of our employees as reported on box 5 of their W-2 tax forms (the “reported compensation”). In making this calculation, we annualized the reported compensation of all permanent employees who were hired in the year ended December 22, 2017 but did not work for us for the entire year. We did not make any cost of living adjustments to the reported compensation in identifying the median employee. Using this methodology, we determined that our median employee was a full-time, hourly employee located in the U.S. With respect to this median employee, we then identified and calculated the elements of such employee’s compensation for the year ended December 22, 2017 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation in the amount of  $44,868.

Identification of Annual Total Compensation for our President and Chief Executive Officer.    With respect to the annual total compensation of Mr. Knowles, we used the amount reported in the “Total” column of our 2017 Summary Compensation Table included in this Proxy Statement.

Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.

Equity Compensation Plan Information

The following table sets forth information as of December 31, 2017, with respect to compensation plans under which shares of our common stock are authorized for issuance:

(1)

In 2016, the Board adopted, and the stockholders approved, the Amended and Restated 2011 Equity Compensation Plan (the “Amended 2011 Plan”) to amend and restate the 2011 Equity Compensation Plan (the “2011 Plan”). In 2011, the Board adopted, and the stockholders approved, the 2011 Plan to succeed the 2007 Equity Compensation Plan (the “2007 Plan”). As a result, no further awards will be granted under the 2007 Plan.

​

(2)

The 2007 Plan permitted the grant of non-qualified and incentive stock options and other stock-based awards to our employees, non-employee directors and other service providers.

​

(3)

Includes stock options to purchase 22,828 shares and 11,357 unvested shares of restricted stock.

​

(4)

Weighted average exercise price of outstanding options; excludes restricted stock awards.

​

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(5)

The Amended 2011 Plan permits the grant of non-qualified and incentive stock options and other stock-based awards, including, without limitation, restricted stock, restricted stock units, unrestricted stock awards and stock appreciation rights, to our employees, non-employee directors and other service providers. Award grants prior to the adoption of the Tax Cuts and Job Act of 2017 may have been made with the intention of qualifying under the requirements of Section 162(m) of the Internal Revenue Code as performance-based compensation. The Amended 2011 Plan is administered by our Compensation Committee. There are 6,050,000 shares of our common stock authorized for issuance, subject to adjustment and reduced by (i) any shares that have been issued under the 2007 Plan and the 2011 Plan, and (ii) any shares that are subject to outstanding awards under the 2007 Plan and the 2011 Plan that have not been forfeited or cancelled. The maximum aggregate number of shares of Common Stock that may be issued under the Amended 2011 Plan is 750,000 shares of Common Stock, plus the number of shares of Common Stock available for grant under the 2011 Plan immediately prior to the Amended 2011 Plan’s approval.

​

(6)

Includes stock options to purchase 666,840 shares and 17,641 unvested shares of restricted stock.

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DIRECTOR COMPENSATION

Non-Employee Director Compensation

The Board, at the recommendation of the Nominating and Corporate Governance Committee, approves the compensation of our non-employee directors. Directors who are our employees do not receive compensation for their service on the Board or any Board committee. The following table sets forth the compensation for our non-employee directors in 2017, which became effective in May 2017.

(1)

Non-employee directors will receive 50% of the annual retainer in cash and 50% of the annual retainer in shares of restricted stock. In addition, the chairperson will receive 50% of the additional chair retainer in cash and 50% of the additional chair retainer in shares of restricted stock. Committee retainers will be paid in cash. The cash component of the retainers will be paid quarterly in arrears. The shares of restricted stock will vest at the next annual stockholders’ meeting, provided, however, if a director leaves the Board for any reason, a pro rata portion of the shares of restricted stock will vest as of the date of termination from the Board. Any fractional shares will be paid in cash. We also reimburse our non-employee directors for reasonable out-of-pocket expenses incurred in connection with attending our board and committee meetings and permit our directors to participate in employee-discount programs available to all our employees.

​

2017 Non-Employee Director Compensation

As set forth above, in 2017, our non-employee directors elected to have the retainers paid both in restricted stock and in cash. The restricted stock portion of the retainer was granted on the date of the 2017 Annual Meeting and vests on the date of the 2018 Annual Meeting. In calculating the number of shares of restricted stock reflecting the value of the retainers for our non-employee directors, we used the closing price of our common stock on the date of the grant. We reimburse directors for expenses incurred in connection with their service as directors, including travel expenses for meeting attendance. Furthermore, our equity award agreements for our directors contain clawback provisions, so that any such awards are subject to such deductions, repayment and clawback as may be required by any applicable law, government regulation or stock exchange listing requirement (or any policy adopted by us pursuant to any such law, government regulation or stock exchange listing requirement).

In addition to the compensation received by our non-employee directors for service on the Board or any standing Board committee, certain non-employee directors also received compensation in 2017 for service on the Special Committee, with such compensation set by the Board. The compensation for such service is described in more detail below.

During 2017, Ms. Taylor served as the chairperson of the Special Committee. The other members of the Special Committee were Messrs. Roper and Wade. The compensation to be paid to Ms. Taylor for serving as the chairperson of the Special Committee during 2017 was a monthly payment of  $20,000 for the

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months of January through May of 2017 and $15,000 for the months of June through December of 2017. The compensation for the other members of the Special Committee until December 1, 2017 was $1,000 per meeting and $1,000 per day during which such member spent a meaningful portion of the day on the business of the Special Committee. Effective December 1, 2017, the compensation for the other members of the Special Committee was increased to $2,000 per meeting. The compensation for other members of the Board who are not members of the Special Committee and, at the request of the Special Committee, provide assistance to the Special Committee, is $1,000 per day for each day such director spends a meaningful portion of his day on the business of the Special Committee. For 2017, there were no such payments to directors who were not members of the Special Committee.

Such compensation in connection with the Special Committee was in the form of cash payments, with such payments subject to the Deferral Plan to the extent such member of the Special Committee elected to participate in the Deferral Plan.

The following table sets forth compensation earned by our directors who are not named executive officers in the fiscal year ended December 31, 2017:

Director Compensation in Fiscal 2017

(1)

Fifty percent (50%) of each non-employee director’s annual retainer is received in cash.

​

(2)

The amounts in this column reflect the aggregate grant date fair value of awards granted during the year computed in accordance with ASC 718, Compensation-Stock Compensation. Stock awards granted on May 24, 2017 had a grant date fair value of  $29.85 per share. For a discussion of the assumptions relating to these valuations, see Note 7 — Stock-Based Compensation to our audited financial statements included in Item 8 of the Form 10-K filed with the SEC on February 27, 2018.

​

(3)

Stock awards include 2,010 shares of restricted stock that were outstanding as of December 31, 2017.

​

(4)

Mr. Rhodes was appointed to the Board on December 7, 2017 and earned $4,110 for service for December 7, 2017 to December 31, 2017. This amount was not paid until March 1, 2018 in accordance with the non-employee director compensation plan. Mr. Rhodes also will receive a prorated number of shares of common stock that will vest at the 2018 Annual Meeting.

​

(5)

As disclosed in the proxy statement for the 2017 Annual Meeting of Stockholders, Mr. Robinson was not nominated for re-election at the 2017 Annual Meeting of Stockholders consistent with the requirements of the Company’s Corporate Governance Guidelines, and retired from the Board when his term expired at the relevant annual meeting. Because Mr. Robinson did not serve as a director subsequent to the 2017 Annual Meeting of Stockholders, he did not receive any awards when Board members received their annual grant on May 24, 2017.

​

(6)

Stock awards include 2,010 shares of restricted stock that were outstanding as of December 31, 2017, which were deferred under the Deferral Plan. For the column “Fees Earned or Paid in Cash”, this

​

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amount includes (i) $40,002 of cash earned in connection with his service on the Board and applicable standing committees that was deferred under the Deferral Plan and (ii) $41,000 of cash earned in connection with his service on the Special Committee that was deferred under the Deferral Plan.

(7)

Stock awards include 3,685 shares of restricted stock that were outstanding as of December 31, 2017. For the column “Fees Earned or Paid in Cash”, this amount includes (i) $61,253 of cash earned in connection with her service on the Board and applicable standing committees and (ii) $205,000 of cash earned in connection with her service on the Special Committee.

​

(8)

Stock awards include 2,010 shares of restricted stock that were outstanding as of December 31, 2017. For the column “Fees Earned or Paid in Cash”, this amount includes (i) $42,502 of cash earned in connection with his service on the Board and applicable standing committees and (ii) $44,000 of cash earned in connection with his service on the Special Committee.

​

Outside Directors Deferral Plan

On November 21, 2008, the Board adopted the Deferral Plan under which each of our non-employee directors has the opportunity to defer receipt of all or a portion of his or her fees until such director’s departure from the Board. In so doing, the Board intended to provide an incentive to the non-employee directors to own shares of our common stock, thereby aligning their interests more closely with the interests of our stockholders. Deferral elections must be made by December 31 for the deferral of fees in the next calendar year.

Under the Deferral Plan, a non-employee director may elect to defer up to 100% of his or her compensation in 25% increments and have such compensation invested in deferred stock units. Deferred stock units attributable to the deferral of cash compensation are credited as of the day on which such compensation is otherwise payable in accordance with our then applicable director compensation policies (the “Payment Date”), and the number of deferred stock units is determined by dividing the deferred compensation payable on the Payment Date by the closing price of our common stock as of the Payment Date with partial shares being disregarded. Deferred stock units credited with respect to restricted stock awards are determined using the closing price as of the grant date of the award of such shares of common stock. Deferred stock units must be settled in common stock upon the director’s departure from the Board. There were an aggregate of 122,007 deferred stock units outstanding at December 31, 2017.

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SECURITIES OWNERSHIP

Securities Ownership of Certain Beneficial Owners

The following table sets forth information regarding ownership of our common stock by each person (or group of affiliated persons) known to us to be the beneficial owner of more than 5% of the outstanding shares of our common stock and the shares of common stock owned by each director, by each named executive officer, and all of our directors and executive officers as a group as of March 26, 2018. Unless otherwise indicated below, the address of each beneficial owner listed below is c/o Lumber Liquidators Holdings, Inc., 3000 John Deere Road, Toano, Virginia 23168.

*

Represents beneficial ownership of less than 1%.

​

(1)

Under the rules of the SEC, a person is deemed to be the beneficial owner of a security if that person, directly or indirectly, has or shares the power to direct the voting of the security or the power to

​

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dispose or direct the disposition of the security. Accordingly, more than one person may be deemed to be a beneficial owner of the same securities. A person is also deemed to be a beneficial owner of any securities if that person has the right to acquire beneficial ownership within 60 days of the relevant date. Unless otherwise indicated by footnote, the named individuals have sole voting and investment power with respect to beneficially owned shares of stock.

(2)

Based on 28,539,484 shares of the Company’s common stock outstanding as of March 26, 2018. In accordance with SEC rules, percent of class as of March 26, 2018 is calculated for each person and group by dividing the number of shares beneficially owned by the sum of the total shares outstanding plus the number of shares subject to options exercisable by that person or group within 60 days.

​

(3)

According to a Schedule 13G/A filed with the SEC on January 19, 2018, BlackRock, Inc., through certain of its subsidiaries, has sole power to vote or direct the vote of 4,028,529 shares and sole power to dispose or to direct the disposition of 4,087,391 shares of the Company’s common stock. Relevant subsidiaries of BlackRock, Inc. that are persons described in Rule 13d-1(b) include: (i) BlackRock (Netherlands) B.V., (ii) BlackRock Advisors, LLC; (iii) BlackRock Asset Management Canada Limited; (iv) BlackRock Asset Management Ireland Limited; (v) BlackRock Asset Management Schweiz AG; (vi) BlackRock Financial Management, Inc., (vii) BlackRock Fund Advisors; (viii) BlackRock Institutional Trust Company, N.A; (ix) BlackRock Investment Management (Australia) Limited; (x) BlackRock Investment Management (UK) Ltd; and (xi) BlackRock Investment Management, LLC.

​

(4)

According to a Schedule 13G/A filed with the SEC on January 10, 2018 by T. Rowe Price Associates, Inc. and T. Rowe Price Small-Cap Value Fund, Inc. T. Rowe Price Associates, Inc. has beneficial ownership as to, and sole power to vote or to direct the vote of, 813,157 shares of the Company’s common stock, and has beneficial ownership as to, and sole power to dispose or to direct the disposition of, 3,323,987 shares of the Company’s common stock. T. Rowe Price Small-Cap Value Fund, Inc. has beneficial ownership of, and the sole power to vote or to direct the vote of, 2,026,700 shares of the Company’s common stock, and has beneficial ownership as to, and sole power to dispose or to direct the disposition of, 2,026,700 shares of the Company’s common stock.

​

(5)

According to a Schedule 13G/A filed with the SEC on February 9, 2018, The Vanguard Group (“Vanguard”), including through certain of its subsidiaries, has sole power to vote or direct the vote of 54,751 shares, sole power to dispose or to direct the disposition of 2,631,332 shares, shared power to vote or direct the vote of 2,532 shares, and shared power to dispose or to direct the disposition of 55,580 shares of the Company’s common stock. Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd. are subsidiaries of Vanguard and beneficially own 53,048 shares and 4,235 shares of the Company’s common stock, respectively.

​

(6)

According to a Schedule 13G filed with the SEC on February 14, 2018, Gilder, Gagnon, Howe & Co. LLC has sole power to vote or direct the vote of 32,228 shares, sole power to dispose or to direct the disposition of 32,228 shares, and shared power to dispose or to direct the disposition of 1,514,076 shares of the Company’s common stock.

​

(7)

Including 17,500 shares not currently owned but issuable upon the exercise of stock options awarded under our equity compensation plans that are currently exercisable or will become exercisable within 60 days.

​

(8)

Including 43,451 shares not currently owned but issuable upon the exercise of stock options awarded under our equity compensation plans that are currently exercisable or will become exercisable within 60 days.

​

(9)

Including 3,071 shares not currently owned but issuable upon the exercise of stock options awarded under our equity compensation plans that are currently exercisable or will become exercisable within 60 days.

​

(10)

Including 74,241 shares not currently owned but issuable upon the exercise of stock options awarded under our equity compensation plans that are currently exercisable or will become exercisable within 60 days.

​

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(11)

Including 54,676 shares not currently owned but issuable upon the exercise of stock options awarded under our equity compensation plans that are currently exercisable or will become exercisable within 60 days. Mr. Pescara resigned from the Company on March 28, 2018.

​

(12)

Including 3,333 shares not currently owned but issuable upon the exercise of stock options awarded under our equity compensation plans that are currently exercisable or will become exercisable within 60 days.

​

(13)

Including 4,166 shares not currently owned but issuable upon the exercise of stock options awarded under our equity compensation plans that are currently exercisable or will become exercisable within 60 days.

​

(14)

Including 200,438 shares not currently owned but issuable upon the exercise of stock options awarded under our equity compensation plans that are currently exercisable or will become exercisable within 60 days.

​

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the Securities and Exchange Commission initial reports of beneficial ownership and reports of changes in beneficial ownership of our equity securities.

Based solely upon a review of Forms 3, Forms 4 and Forms 5 furnished to us under Rule 16a-3(e) during 2017, and written representations of our directors and officers, we believe that all directors, executive officers and beneficial owners of more than 10% of our common stock have filed with the SEC on a timely basis all reports required to be filed under Section 16(a) of the Securities Exchange Act.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We have a formal written policy concerning related person transactions, a copy of which is available on our website. Under that policy, a related person transaction is a transaction, arrangement or relationship involving us, on the one hand, and (i) our director or executive officer, his or her immediate family members or any entity that any of them controls or in which any of them has a substantial beneficial ownership interest; or (ii) any person who is the beneficial owner of more than 5% of our voting securities or a member of the immediate family of such person. Related person transactions do not include (i) any employee benefit plan, policy, program, agreement or other arrangement that has been approved by the Board, the Compensation Committee or recommended by the Compensation Committee for approval by the Board, or (ii) any transaction (other than consulting or employment) in the ordinary course of business and/or in compliance with approved Company policy, if applicable, that does not involve an amount exceeding $100,000 in aggregate.

The Audit Committee evaluates each related person transaction for the purpose of recommending to the disinterested members of the Board whether the transaction is fair, reasonable and within our policy, and should be ratified and approved by the Board. At least annually, management will provide the Audit Committee with information pertaining to related person transactions. Related person transactions entered into, but not approved or ratified as required by the policy concerning related person transactions, will be subject to termination by us or the relevant subsidiary, if so directed by the Audit Committee, taking into account factors as it deems appropriate and relevant. During 2017, we did not have any related person transactions under the relevant standards.

AUDITOR INFORMATION

Ernst & Young served as our independent registered public accounting firm for the years ended December 31, 2017 and 2016. Representatives of Ernst & Young are expected to attend the Annual Meeting, be available to respond to appropriate questions from stockholders and have the opportunity to make a statement if they desire to do so.

Fees Paid to Independent Registered Public Accounting Firm

The following information is furnished with respect to the fees billed by our independent registered public accounting firm for each of the last two fiscal years:

Audit fees:   The aggregate amount of fees billed to us by Ernst & Young for professional services rendered in connection with the audits of our annual consolidated financial statements and our international subsidiaries, the reviews of the consolidated financial statements for the fiscal quarters during the year and accounting consultations that relate to the audited consolidated financial statements and are necessary to comply with auditing standards.

Audit-Related fees:   The aggregate amount of fees billed to us by Ernst & Young for professional services rendered in connection with accounting consultations, principally related to SEC filing and reporting matters.

Tax fees:   The aggregate amount of fees billed to us by Ernst & Young for professional services related to federal, state and international tax return preparation, tax planning services and consultations on tax matters.

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Audit Committee Pre-Approval Policies and Procedures

The Audit Committee has determined that Ernst & Young’s rendering of all other non-audit services is compatible with maintaining auditor independence. The Audit Committee has adopted a policy for the pre-approval of services provided by the independent registered public accounting firm. Under the policy, pre-approval is generally provided for particular services or categories of services, including planned services, project-based services and routine consultations projects. Each category is subject to a specific budget or quarterly dollar amount. In addition, the Audit Committee may also pre-approve particular services on a case-by-case basis. For each proposed service, the independent registered public accounting firm is required to provide detailed back-up documentation at the time of approval. The Audit Committee has delegated certain pre-approval authority to its Chairman. The Chairman must report any decisions to the Audit Committee at its next scheduled meeting. All services provided by Ernst & Young during 2016 and 2017 were pre-approved.

Audit Committee Report

The Audit Committee operates under a written charter adopted by the Board. The charter reflects the requirements of the Sarbanes-Oxley Act of 2002, the SEC and the NYSE. Each member of the Audit Committee is independent in accordance with the applicable rules of the NYSE, the SEC and our corporate governance guidelines.

The Audit Committee reviews and discusses the following matters with management and our independent registered public accounting firm, Ernst & Young LLP:

•

Quarterly and year-end results, consolidated financial statements and reports, prior to public disclosure.

​

•

Our disclosure controls and procedures, including internal control over financial reporting.

​

•

The independence of our registered public accounting firm.

​

•

Management’s report and the independent registered public accounting firm’s report and attestation on internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.

​

The Audit Committee routinely meets with our internal auditors and independent registered public accounting firm, with and without management present.

The Audit Committee has oversight responsibilities only and it is not acting as an expert in accounting or auditing. The Audit Committee relies without independent verification on the information provided to its members and on the representations made by management and the independent auditors. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States or that the audit of our consolidated financial statements by the independent auditors has been carried out in accordance with auditing standards set forth by the Public Company Accounting Oversight Board (“PCAOB”).

Management has the primary responsibility for the preparation of our 2017 consolidated financial statements and the overall reporting process, including the systems of internal control over financial reporting, and has represented to the Audit Committee that our 2017 consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States. The Audit Committee reviewed and discussed the audited consolidated financial statements with management and the independent registered public accounting firm. In accordance with the requirements established by the PCAOB Auditing Standard No. 1301, “Communications with Audit Committees,” these discussions included, among other things, a review of significant accounting policies, their application and estimates, and the independent registered public accounting firm’s judgment about our internal controls and the quality of our accounting practices.

The Audit Committee has received from the independent auditors written disclosures required by applicable requirements of the Public Company Accounting Oversight Board regarding the auditors’ independence, and has discussed with the independent auditors, the independent auditors’ independence.

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Relying on these reviews and discussions, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, for filing with the SEC.

AUDIT COMMITTEE

Jimmie L. Wade, Chairperson
W. Stephen Cannon
Martin F. Roper

Dated: March 7, 2018

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PROPOSAL TWO

RATIFICATION OF THE SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has selected Ernst & Young LLP to serve as our independent registered public accounting firm for the year ending December 31, 2018. We are asking the stockholders to ratify this selection. If our stockholders fail to ratify the selection of Ernst & Young, the Audit Committee and our Board will consider whether to retain Ernst & Young and may retain that firm or another firm without resubmitting the matter to our stockholders. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered accounting firm at any time during the year if it determines that such a change would be in our and our stockholders’ best interest.

The affirmative vote of the holders of shares representing a majority of the votes cast at the Annual Meeting, in person or by proxy, is required to ratify the selection of the independent registered public accounting firm.

The Board of Directors recommends that you vote FOR the ratification of the
selection by the Audit Committee of Ernst & Young LLP as our independent registered public accounting firm
for the fiscal year ending December 31, 2018.

PROPOSAL THREE

ADVISORY (NON-BINDING) VOTE ON NAMED EXECUTIVE OFFICER
COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act and subsequent rules and regulations promulgated by the SEC require that we provide our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with Item 402 of the Securities and Exchange Commission’s Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion. This vote will not create or imply any change to our fiduciary duties or create or imply any additional fiduciary duties for the Board or us. However, we value the opinions that our stockholders express in their votes and will consider the outcome of the vote when making future decisions on executive compensation, as we deem appropriate. We have elected to conduct this “say-on-pay” non-binding advisory vote annually. The next non-binding advisory vote to approve the compensation of our named executive officers will occur at the 2018 Annual Meeting of Stockholders

Accordingly, we ask our stockholders to vote on the following resolution at the Annual Meeting:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

As discussed in the Compensation Discussion and Analysis section above, we believe that the compensation structure for our named executive officers is appropriate, flexible and effective in attracting and retaining talented personnel. In our judgment, the compensation paid to our named executive officers includes a healthy balance between fixed and performance-based compensation as well as a blend between cash and equity components. Furthermore, we maintain that the compensation for our named executive officers is aligned with the interests of our stockholders through incentives based on increasing stockholder value. Finally, we believe that our compensation programs maintain an appropriate balance of risk and reward in relation to our business strategies and objectives.

The vote on this resolution is not intended to address any specific element of compensation; rather, the vote relates to the compensation of our named executive officers, as described in this proxy statement. The vote is advisory, which means that the vote is not binding on the Company, our Board or the Compensation Committee of the Board and will not be construed as overruling a decision by the Compensation Committee, the Board or the Company. To the extent there is any significant vote against our named executive officer compensation as disclosed in this Proxy Statement, the Compensation Committee will evaluate whether any actions are necessary to address the concerns of stockholders.

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The Board of Directors recommends that you vote FOR the proposed
resolution approving the compensation of our named executive officers,
as disclosed in this Proxy Statement.

DEADLINES FOR SUBMISSION OF STOCKHOLDER PROPOSALS

Stockholders interested in submitting a proposal for inclusion in the proxy materials for the Annual Meeting of Stockholders to be held in 2019 may do so by following the procedures set forth in Rule 14a-8 of the Securities Exchange Act of 1934, as amended. To be eligible for inclusion, stockholder proposals must be received at our principal executive offices in Toano, Virginia on or before December 7, 2018.

If a stockholder wishes to present a proposal at the 2019 Annual Meeting of Stockholders but not have it included in our proxy materials for that meeting, the proposal: (1) must be received by us no later than December 7, 2018, (2) must present a proper matter for stockholder action under Delaware General Corporation Law, (3) must present a proper matter for consideration at such meeting under our Amended and Restated Certificate of Incorporation and Bylaws, (4) must be submitted in a manner that is consistent with the submission requirements provided in our Bylaws, and (5) must relate to subject matter which could not be excluded from a proxy statement under any rule promulgated by the SEC.

OTHER MATTERS

Management knows of no matters which may properly be and are likely to be brought before the Annual Meeting other than the matters discussed herein. However, if any other matters properly come before the Annual Meeting, the persons named in the enclosed proxy will vote in accordance with their best judgment.

AVAILABILITY OF ANNUAL REPORT ON FORM 10-K

A copy of an Annual Report on Form 10-K, including the financial statements and schedules thereto, required to be filed with the SEC for our most recent fiscal year, may be found on our website, www.lumberliquidators.com. In addition, we will provide each beneficial owner of our securities with a copy of the Annual Report without charge, upon receipt of a written request from such person. Such request should be sent to the Corporate Secretary, Lumber Liquidators Holdings, Inc., 3000 John Deere Road, Toano, Virginia 23168.

VOTING PROXIES

The Board recommends an affirmative vote for each of the director nominees named in Proposal One, and an affirmative vote on Proposals Two and Three. Proxies will be voted as specified. If signed proxies are returned without specifying an affirmative or negative vote, the shares represented by such proxies will be voted “FOR” the director nominees named in Proposals One, and “FOR” Proposals Two and Three. Management is not aware of any matters other than those specified herein that will be presented at the Annual Meeting, but if any other matters do properly come before the Annual Meeting, the proxy holders will vote upon those matters in accordance with their best judgment.

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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY NOTE: Such other business as may properly come before the meeting or any adjournment thereof. E37196-P03589 ! ! ! For All Withhold All For All Except For Against Abstain ! ! ! To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. LUMBER LIQUIDATORS HOLDINGS, INC. 2. Proposal to ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2018. 3. Proposal to approve a non-binding advisory resolution approving the compensation of our named executive officers. 01) Douglas T. Moore (term expiring 2021) 02) Nancy M. Taylor (term expiring 2021) 03) Jimmie L. Wade (term expiring 2021) 04) Famous P. Rhodes (term expiring 2019) Nominees: The Board of Directors recommends you vote FOR the following: The Board of Directors recommends you vote FOR proposals 2 and 3. 1. Election of Directors, three of them for terms expiring in 2021 and one of them for a term expiring in 2019. Please indicate if you plan to attend this meeting. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. For address changes and/or comments, please check this box and write them on the back where indicated. ! ! ! Yes No ! ! ! LUMBER LIQUIDATORS HOLDINGS, INC. ATTN: M. LEE REEVES 3000 JOHN DEERE RD TOANO, VA 23168 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on May 22, 2018. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on May 22, 2018. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

E37197-P03589 2018 Annual Meeting May 23, 2018, 10:00 AM Hilton Garden Inn Williamsburg 1624 Richmond Road Williamsburg, VA 23185 Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be held on May 23, 2018: The Notice and Proxy Statement and the Annual Report are available at www.proxyvote.com. LUMBER LIQUIDATORS HOLDINGS, INC. Annual Meeting of Stockholders May 23, 2018, 10:00 AM This proxy is solicited by the Board of Directors Proxy - Lumber Liquidators Holdings, Inc. Notice of 2018 Annual Meeting of Stockholders Proxy Solicited by Board of Directors for the Annual Meeting - May 23, 2018 Martin D. Agard and M. Lee Reeves, or either of them, each with the power of substitution, are hereby authorized to represent and vote the shares of the undersigned, with all the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of Lumber Liquidators Holdings, Inc. to be held on May 23, 2018. Shares represented by this proxy will be voted as directed by the stockholder. If no such directions are indicated, the Proxies will have authority to vote FOR all nominees listed in Proposal 1 and FOR Proposals 2 and 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting. Continued and to be signed on reverse side Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)