Offer Letter Agreement with Matthew Argano, dated March 28, 2020
Exhibit 10.36
4901 Bakers Mill Lane, Richmond, VA 23230
www.lumberliquidators.com
March 28, 2020
VIA EMAIL
Matt T. Argano
Re: Offer Letter
Dear Matt:
This letter confirms our offer of employment to you with Lumber Liquidators Holdings, Inc. or one of its subsidiaries (individually and collectively, as applicable, “Lumber Liquidators” or the “Company”) and replaces all previous offer letters sent to you. The details of our offer are as follows:
• Title: Chief Human Resources Officer (CHRO)
• Location: Richmond, Virginia
• Reports to: Charles Tyson, Interim President and CCEO
• | Start Date: April 20, 2020 (or as determined based upon mutual agreement between you and Charles Tyson). |
• | Annual Base Salary: $350,000. Lumber Liquidators currently processes payroll on a weekly basis. This is subject to change. We strongly encourage employees to receive their pay via direct deposit. |
• | Incentive Plan: You will be eligible to participate in the Annual Bonus Plan for Executive Management (the “Bonus Plan”). Your 100% target payout under the Bonus Plan will be equal to 50% of your annual base salary, with the opportunity to earn a maximum of 175% of your target payout based on Lumber Liquidators’ performance against certain financial objectives. For 2020, any earned bonus payout will be pro-rated for your date of hire in 2020. Notwithstanding the foregoing, the awarding (or decision not to award) a payment under the Bonus Plan and the amount thereof, is a decision left to the sole discretion of Lumber Liquidators. Further, the Bonus Plan is subject to amendment, modification and/or termination by Lumber Liquidators in its sole and absolute discretion. To the extent there is any conflict between this Offer Letter and the language of the Bonus Plan, the Bonus Plan shall control. |
• Equity: Lumber Liquidators has recommended to the Compensation Committee of its
Board of Directors that you receive an award of equity with a total cumulative value of
$250,000. The Company has recommended that 50% of such award be options and 50%
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Exhibit 10.36
be restricted stock. The valuation of the options will be made using the Black-Scholes- Merton method as of the date of award and the valuation of the restricted stock will be made using the fair market value of the shares on the grant date. If approved by the Compensation Committee, any award will be granted under, subject to and governed by the Lumber Liquidators Holdings, Inc. Amended and Restated 2011 Equity Compensation Plan, and shall be evidenced by a grant agreement. The agreement will specify, among other things, the vesting schedule, consequences of termination of employment and other applicable terms and conditions. The vesting schedule of the grant will be as follows: beginning on the first anniversary of the grant date, 25% of the grant will vest on anniversary of the grant date for a period of four (4) years. While it is expected that the Compensation Committee will next award equity three (3) business days after the Company publicly announces its financial results for Q2-2020, the timing and amount of any such award to you is subject to your actual start date of employment and to the absolute discretion of the Compensation Committee and the Board of Directors. You may be eligible for future annual equity awards based on an assessment of your job performance and recommendation made by the CEO. All awards require approval at the absolute discretion of the Compensation Committee and the Board of Directors. As an employee, you will be subject to the expectations and restrictions of Lumber Liquidators’ Insider Trading Policy, a copy of which is provided at the time of hire and is available upon request to Human Resources.
• | Director and Officer Stock Ownership Guidelines: In order to align the financial interests of executives with those of the Company’s stockholders and to further promote the Company’s commitment to sound corporate governance, you will be subject to the following stock ownership requirement: |
Position Value of Shares
Chief Human Resource Officer (CHRO) 1 times base salary
The participants in the Ownership Guidelines are expected to meet the applicable guideline no more than five (5) years after first becoming subject to them and are expected to continuously own sufficient shares to meet the applicable guideline once attained. 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;
i. Vested shares of restricted stock held by the participant;
ii. | Shares underlying vested stock options held by the participant that are “in the money”; and |
iii. Shares held pursuant to the Lumber Liquidators Holdings, Inc. Outside Director
Deferral Plan (the “Deferral Plan”) (i.e., deferred stock units).
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Exhibit 10.36
The Compensation Committee shall be responsible for monitoring the application of the Ownership Guidelines and has sole discretion to alter or change these requirements at any time.
•Relocation Expense Reimbursement: This position is based in the corporate offices in Richmond, VA. Financial support will be provided to cover reasonable temporary living and relocation expenses from your current residence to the Richmond, VA area. You will be provided with up to $200,000 (relocation expenses that are not tax deductible will be grossed up at 35%) in relocation expense reimbursement in accordance with the company’s relocation policy provided you sign and return to us a Relocation Expense Agreement. In the event you voluntarily resign your employment from Lumber Liquidators for any reason prior to completing two (2) full years of employment, you shall be obligated to repay this relocation payment and any related gross up (together, the “relocation payment”) to Lumber Liquidators as follows: (i) before one (1) year, full repayment of the relocation payment, or (ii) after one (1) year but before two (2) years,
50% repayment of the relocation payment; that such repayment shall be due within thirty (30) days of the termination of your employment; and that you acknowledge that Lumber Liquidators has the right to reduce any final compensation payment to you by the amount owed to Lumber Liquidators under this section. Your final relocation date will be determined as mutually agreed upon between Charles Tyson and you.
•Severance Benefit: In consideration of the Employee’s continued employment with the Company and its subsidiaries, the Company desires to provide the Employee with certain compensation and benefits set forth in the Severance Agreement in order to ameliorate the financial and career impact on the Employee if the Employee’s employment with the Company and its subsidiaries is terminated under certain circumstances.
•Performance Review and Merit Increase: Your performance will be reviewed periodically with you by your supervisor, but no less than annually. Merit increases are discretionary based on performance and business considerations.
•Benefits Eligibility: You will be eligible to participate in benefit plans offered through Lumber Liquidators per the terms and conditions of those plans. During your orientation, you will be given more information regarding these plans and a copy of our current benefits summary if you did not previously receive one. Following your first day of employment, you will also be able to access the full Benefits Guide on our Company intranet. In addition, you will be eligible for any executive perquisites offered by the company. Currently these benefits include reimbursement for a personal annual physical and annual financial/tax planning/preparation and are subject to a maximum reimbursement limit set by the company.
• | Paid Time Off (PTO): Per the terms and conditions of the Lumber Liquidators Paid Time Off (“PTO”) Policy, you will be eligible to accrue up to a maximum of 200 hours of PTO annually and thereafter. Your 2020 accrual will be pro-rated based on your actual date of hire. |
• Holidays: Lumber Liquidators observes six scheduled holidays each year. Those
holidays currently are New Year’s Day, Memorial Day, Independence Day, Labor Day,
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Exhibit 10.36
Thanksgiving Day, and Christmas Day. The holiday schedule is established in advance of each year and is subject to change.
This offer of employment is contingent on (1) satisfactory completion of all pre-hire assessments and evaluations, (2) satisfactory results of a drug screening test, (3) executive background verification, (4) your executing the Confidentiality, Non-Solicitation and Non-Competition Agreement, and (5) your ability to show that you are eligible to work in the United States.
On your first day of employment, you will be required to provide your social security card for payroll purposes, and proof of identity and employment eligibility in order to complete an Employment Eligibility Verification (I-9) form. A list of acceptable documents is enclosed. Please note that, if you do not have one document from List A, you must bring one document from List B and one document from List C.
Please ensure that you bring the proper documentation with you on your first day of employment. Your subsequent failure to provide the necessary documentation as required by federal law may result in the termination of your employment. Please note that your name for payroll purposes must match exactly with your social security records. To expedite the orientation process, please complete the attached forms and bring these with you your first day.
Please acknowledge your acceptance of this offer by signing and returning a copy of this letter no later than the close of business March 31, 2020 to me via email to: jkeith@lumberliquidators.com. By signing this offer, you are, among other things, representing to Lumber Liquidators that there are no legal or equitable agreements or restrictions that would prevent, limit, impair or otherwise compromise your ability to comply with the terms of this offer and perform on behalf of Lumber Liquidators.
Please note that your employment with Lumber Liquidators is at-will and neither this document nor any other oral or written representations may be considered a contract of employment for any specific length of time. You retain the option, as does Lumber Liquidators, of ending your employment with Lumber Liquidators at any time, with or without notice and with or without cause.
If you have questions regarding any of the above, please feel free to contact me by telephone at
(804) 420-8313 (office) or ___________ (mobile), or by email.
We look forward to you joining the Lumber Liquidators team and working with you to further our success.
Sincerely,
Jay L Keith
Vice President, Human Resources
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Exhibit 10.36
ACKNOWLEDGEMENT and AGREEMENT: As indicated by my signature below on this letter, I acknowledge its receipt and my understanding and acceptance of its contents. I agree that should I terminate employment with Lumber Liquidators or if my employment is terminated for cause, any monies owed for reimbursement of expenses or other sums under this offer letter will be deducted from my final paychecks.
Signature: /s/ Matthew Argano Matthew Argano
cc: Charles Tyson, Interim President and CCEO
Date:March 28, 2020
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