LL LL Flooring Holdings Inc

TABLE OF CONTENTS

PROXY STATEMENT SUMMARY

This summary highlights information contained elsewhere in this Proxy Statement and does not contain all of the information you should consider. Please carefully read the entire Proxy Statement and our Annual Report on Form 10-K and Form 10-K/A for the fiscal year ended December 31, 2023 before voting.

2024 Annual Meeting of Stockholders

Proposals and Board Recommendations

Item		Proposals		Board Recommendations		Page
1		Election of three directors		✓ FOR each nominee			[•]
2		Approval of a non-binding advisory resolution approving the compensation of our named executive officers		✓ FOR			[•]
3		Approval of amendment and restatement of the Company’s Amended and Restated Certificate of Incorporation to declassify the Board		✓ FOR			[•]
4		Approval of amendment and restatement of the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares		✓ FOR			[•]
5		Ratification of Ernst & Young LLP as our independent registered public accounting firm for 2024		✓ FOR			[•]
6		Stockholder proposal pursuant to the Company’s Bylaws		AGAINST			[•]

You may receive solicitation materials from Mr. Hammann or Mr. Sullivan, including proxy statements and [●] or [●] proxy cards from each of Mr. Hamann and Mr. Sullivan, respectively, seeking your proxy to vote for the Hammann Nominee or the Sullivan Nominees. The Company is not responsible for the accuracy of any information provided by, or relating to, Mr. Hammann, Mr. Sullivan or their respective nominees contained in any proxy solicitation materials filed or disseminated by, or on behalf of, Mr. Hammann or Mr. Sullivan or any other statements that Mr. Hammann or Mr. Sullivan may otherwise make. Mr. Hammann and Mr. Sullivan choose which of the Company’s stockholders will receive their respective proxy solicitation materials. The Board does NOT endorse the Hammann Nominee or the Sullivan Nominees and urges you NOT to sign or return or vote any proxy card sent to you by Mr. Hammann or Mr. Sullivan. If you have already voted using a [●] proxy card sent to you by Mr. Hammann or a [●] proxy card sent to you by Mr. Sullivan, you can revoke it by signing, dating and mailing the enclosed WHITE proxy card in the envelope provided. Only your latest dated proxy will be counted and any proxy may be revoked at any time prior to its exercise at the Annual Meeting.

For more information and up–to–date postings, please go to https://investors.llflooring.com. If you have any questions or need assistance in voting your shares, please call Saratoga, the firm assisting us in the solicitation, at (888) 368-0379 or (212) 257-1311 or by email at info@saratogaproxy.com.

2023 Financial and Operating Highlights

2023 was a challenging year for LL Flooring. We reported net sales of $905 million, which was down 18.5% from 2022. We also reported an operating loss due to sales deleverage as weaker existing home sales, elevated interest rates, and inflation led to softness in home improvement, remodel and big-ticket discretionary spending.

Leading economic indicators suggest that home improvement spending will continue to be challenged through at least the first half of 2024, however, we believe the long-term fundamentals of our business are strong due to aging housing stock, increased household formation and rising home values. To that end, we remain focused on executing on our brand transformation and on our strategic initiatives which we believe will drive revenue growth, increase brand awareness, spur product innovation and deliver a consistent customer experience. We believe we are gaining traction on several of our operating strategies, focusing on the customer experience, driving and improving NPS scores, innovating products including the execution of our carpet initiatives, and maintaining a strong focus on improving operational efficiencies and working capital management. As noted in more detail in the “Background of Solicitation” section, the Board is also continuing its exploration of strategic alternatives announced last August.

Our Board

At this year’s Annual Meeting, you are being asked to vote on the election of three Class III director nominees whose terms expire at the 2024 Annual Meeting. More detailed information about each director can be found beginning on page [•].

Our Board embodies a diverse range of viewpoints, backgrounds and skills that are vital to its effectiveness.

See page [•] for individual details for each director, including experience and qualifications.

Corporate Governance Highlights

Strong corporate governance practices are key to achieving our performance goals while maintaining the trust and confidence of our stockholders, associates, customers, and other stakeholders. Our corporate governance practices are described in more detail beginning on page [•] and in our Corporate Governance Guidelines, which can be found at https://investors.llflooring.com/corporate-governance.

Executive Compensation Highlights

You are being asked to vote on an advisory basis on the compensation paid to the Company’s named executive officers as described in this Proxy Statement, including the Compensation Discussion and Analysis, compensation tables and narrative discussion beginning on page [•].

In 2023, the Compensation Committee reduced the potential payout levels under the Annual Bonus Plan to make it more affordable in light of the business challenges facing the Company. The Compensation Committee also determined that it would switch from Adjusted Operating Income to Adjusted Gross Margin as the Annual Bonus Plan metric related to profitability, and that it would add a third strategic goal to the Annual Bonus Plan.

With respect to the long-term equity incentive awards, in 2023 the Compensation Committee discontinued the use of stock options and moved to a mix of time-based restricted stock and performance-based restricted stock. The Compensation Committee also shortened the vesting period for the time-based restricted stock awards from four years to three years and for the performance-based restricted stock awards, switched from an adjusted EBITDA goal to a three-year relative total shareholder return.

These changes were intended to further strengthen the alignment of pay and performance and focus executives on creating long-term stockholder value.

Philosophy and Objectives

Our executive compensation program is designed to:

We meet these objectives through an appropriate mix of compensation, including base salary, short-term incentives, and long-term incentives.

BACKGROUND OF SOLICITATION

The Board and management of the Company regularly evaluate the Company’s strategic direction and ongoing business plans and review potential alternatives with a view toward enhancing long-term shareholder value. As part of these reviews, the Board and management have considered, among other things, various investments, diversification into new product lines, purchases and sales of assets and companies, potential strategic business combinations and other transactions with third parties that would further the Company’s strategic objectives and ability to create shareholder value.

Throughout late Fall 2022 and early 2023, the Company engaged with representatives of a private equity sponsor (“Party A”), which expressed interest in a transaction with the Company.

On January 20, 2023, Party A submitted a non-binding indication of interest with respect to a potential acquisition of all of the Company’s outstanding shares of common stock for $8.00 per share in cash (following a previous day per share closing price of $5.83). Shortly thereafter, the Company’s senior management consulted with J.P. Morgan Securities LLC (“JPM”), the Company’s long-standing financial advisor, and Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”) to assist the Board in its review of Party A’s proposal and consideration of strategic alternatives, which matters were discussed with the Board several times. During such meetings, the Board determined, after review and consideration of feedback from the Company’s senior management and JPM, including in light of the Company’s recently launched strategic initiatives and enhanced product offerings and the prospects thereof, that Party A’s proposal significantly undervalued the long-term value of the Company, its business and prospects.

On March 1, 2023, the Board sent a letter to Party A rejecting such indication of interest but noting, however, that if Party A were to significantly increase the offer price reflected in its January 20, 2023 indication of interest to a level that is more reflective of the intrinsic value of the Company, the Board would be willing to continue engaging with Party A regarding the terms of a potential acquisition of the Company by Party A.

On March 14, 2023, Party A submitted a letter to the Board indicating that it may be able to submit a revised indication of interest that reflects a material increase to the offer price reflected in Party A’s January 20, 2023 indication of interest, if Party A was given the opportunity to engage in discussions and conduct due diligence that enabled it to discover additional value.

On May 16, 2023, Party A and the Company entered into a confidentiality agreement, which contained a five-month standstill provision.

On May 24, 2023, representatives of F9 contacted Charles Tyson informing Mr. Tyson that F9 was interested in a transaction involving the Company and F9’s subsidiary, Cabinets To Go, LLC (“CTG”, and together with F9, the “F9 Parties”) and that F9 would be filing a Schedule 13D disclosing the foregoing.

On May 25, 2023, F9 filed a Schedule 13D and disclosed a 9.447% ownership in the Company.

On May 26, 2023, the F9 Parties delivered to the Company a non-binding indication of interest with respect to a potential acquisition by CTG of all of the Company’s outstanding shares of common stock for $5.76 per share in cash (following a previous day per share closing price of $4.26) (the “F9 Indication of Interest”). Shortly thereafter, the Company’s senior management consulted with JPM and Skadden to assist the Board in its review of the F9 Indication of Interest, including consideration of potential alternative transactions.

On May 30, 2023, F9 filed an amendment to its Schedule 13D, disclosing, among other things, that the F9 Parties had delivered the F9 Indication of Interest to the Company.

On May 30, 2023, the Company issued a press release confirming receipt of the unsolicited, non-binding F9 Indication of Interest.

On May 31, 2023, the Company sent the F9 Parties a letter, noting, among other things, that the Board would review the F9 Indication of Interest with its financial and legal advisors and respond in due course.

On June 8, 2023, following an initial outreach from representatives of a private equity sponsor (“Party B”), representatives of Party B and the Company discussed the possibility of a strategic transaction involving Party B and the Company.

On June 9, 2023, the F9 Parties sent a letter to Nancy Taylor, Chairperson of the Board, and Charles Tyson, the Company’s Chief Executive Officer, which reconfirmed the F9 Indication of Interest and requested a meeting with the Board during the week of June 19, 2023.

On June 12, 2023, F9 filed an amendment to its Schedule 13D, disclosing, among other things, the letter sent by the F9 Parties on June 9, 2023 with respect to the F9 Indication of Interest.

On June 13, 2023, Howard Jonas, who claimed to represent a consortium of investors with an aggregate economic interest in more than 5% of the Company’s outstanding shares of common stock, collectively, sent a letter to the Company and issued a press release urging the Company to constructively engage with the F9 Parties regarding the F9 Indication of Interest and advance an immediate sale process. Following receipt of such letter, representatives of the Company subsequently spoke to representatives of Mr. Jonas regarding his letter.

On June 21, 2023, Party B delivered to the Company a non-binding indication of interest with respect to a potential acquisition of all of the Company’s outstanding shares of common stock by Party B for a price of $6.00 per share (following a previous day per share closing price of $4.59). Shortly thereafter, the Company’s senior management consulted with JPM and Skadden to assist the Board in its review of the indications of interests received and consideration of strategic alternatives.

On June 23, 2023, the Board held a meeting with certain members of management, JPM and Skadden present to discuss, among other things, (i) F9’s indication of interest, (ii) Party B’s indication of interest and (iii) the initiation of a potential sale process targeting a broader set of sponsor or strategic buyers. At the meeting, the Board determined that F9’s indication of interest was not in the best interests of the Company’s stockholders because at that time the Company was pursuing other indications of interest at a higher price and authorized JPM to engage with Party B to determine if Party B would increase its non-binding offer price.

On June 26, 2023, Nancy Taylor sent the F9 Parties a letter on behalf of the Board stating that the Board had rejected the F9 Indication of Interest, noting, among other things, that it was the Board’s unanimous belief that the price of $5.76 per share in cash proposed in the F9 Indication of Interest significantly undervalued the Company, its business and prospects, and that if the F9 Parties significantly increased the $5.76 per share offer price in the F9 Indication of Interest to a price that is reflective of the value of the Company, the Board would consider any such revised proposal from the F9 Parties consistent with the Board’s fiduciary responsibilities and would also consider entering into a customary confidentiality agreement with the F9 Parties.

On July 20, 2023, the Board held a meeting with certain members of management present. During the meeting, management provided an update on due diligence discussions with Party A and reported on work by JPM to prepare to commence outreach to a broader set of potential buyers.

On August 10, 2023, the Board held an update session with certain members of the Company’s management team present as well as representatives from Skadden and JPM. During the session, management noted that the

Company’s previous efforts at completing a strategic transaction had proved unsuccessful. In light of ongoing challenging market conditions, the Board concluded that the best option for enhancing stockholder value would be to conduct a formal review of strategic alternatives, which could include a sale, merger or other strategic transaction involving the Company.

The Board requested management to commence, and publicly announce, a review of strategic alternatives, including a potential sale of or merger involving the Company.

On August 14, 2023, the Company publicly announced that, in response to receipt of multiple inbound expressions of interest regarding a potential acquisition of the Company, the Company had initiated an exploration of strategic alternatives, including, among other things, a potential sale, merger or other strategic transaction. As part of the strategic review process, commencing in August 2023, JPM conducted outreach to or otherwise engaged with numerous potential counterparties to a strategic transaction involving the Company, certain of whom entered into confidentiality agreements with the Company.

On August 17, 2023, the F9 Parties submitted a letter to the Company withdrawing its indication of interest in the Company (which F9 also disclosed the same day in an amendment to its Schedule 13D).

On August 29, 2023, the Board held an update session with certain members of management, Skadden and JPM present to discuss, among other things, the initial outreach to, and interest from, potential buyers following the Company’s announced exploration of strategic alternatives.

Throughout the Fall of 2023, the Company, with the assistance of its advisors, continued the Company’s exploration of strategic alternatives.

On September 19, 2023, the Board held a meeting with certain members of the Company’s management team and representatives of JPM and Skadden present, during which, among other things, the Board was advised that representatives of Party A had indicated that Party A was considering partnering with the F9 Parties with respect to a potential acquisition of the Company. Following the Board meeting, JPM contacted representatives of Party A noting that the Board would permit Party A to partner with the F9 Parties, subject to F9 entering into a customary joinder to Party A’s confidentiality agreement. However, following such discussion, neither Party A nor the F9 Parties delivered such joinder.

On September 26, 2023, a private equity sponsor (“Party C”) submitted a non-binding indication of interest with respect to a potential acquisition of all of the Company’s outstanding shares of common stock for $6.25 per share in cash (following a previous day per share closing price of $3.02).

Also on September 26, 2023, Party B submitted a revised non-binding indication of interest, reducing its offer price to $4.50 (compared to its $6.00 per share in cash offered in Party B’s June 21, 2023 indication of interest).

Throughout October 2023, the Company and its representatives and the F9 Parties engaged in discussions regarding having F9 participate in the Company’s process.

On October 3, 2023, the Board held a meeting with certain members of management, Skadden and JPM present to discuss, among other things, an update on the status of the Company’s exploration of strategic alternatives, including the indications of interest from each of Party B and Party C.

On October 11, 2023, Live Ventures Incorporated (“Live Ventures”) delivered to the Company a non-binding indication of interest with respect to a potential acquisition by Live Ventures of all of the Company’s outstanding

shares of common stock for $5.85 per share in cash (following a previous day per share closing price of $2.90), which indication of interest Live Ventures also publicly announced by issuing a press release the following day.

Throughout October 2023 and early November 2023, the Company held various meetings and management presentations with certain parties as part of the Company’s exploration of strategic alternatives, including with Parties B and C.

Thereafter, in the Fall of, and late, 2023 certain parties, including Parties A, B and C, expressed to the Company’s representatives that they no longer were actively pursuing a potential transaction involving the Company.

On November 3, 2023, Live Ventures sent a letter to the Board reaffirming the non-binding indication of interest that it had submitted on October 11, 2023.

On November 6, 2023, Skadden and representatives of Live Ventures’ external legal counsel met to discuss, among other things, Live Ventures’ non-binding indication of interest submitted on October 11, 2023, and Live Ventures entering into a customary confidentiality agreement and clean team agreement with the Company in order for Live Ventures to conduct further due diligence regarding the Company.

On November 10, 2023, Live Ventures submitted a request for nomination materials to submit a stockholder nomination for election to the Board at the Annual Meeting.

On November 13, 2023, the Company and Live Ventures entered into a confidentiality agreement, which provided for, among other things, a limited-duration standstill through the end of February 2024, and “clean team agreement” to limit access of certain competitively sensitive information.

Also on November 13, 2023, the Company received a letter from Jerald Hammann, a Company stockholder, indicating Mr. Hammann’s interest in submitting a nominee for election to the Board at the Annual Meeting and requesting certain nomination materials from the Company.

On November 14, 2023, the F9 Parties submitted an updated non-binding indication of interest to the Company with respect to a potential acquisition by CTG of all of the Company’s outstanding shares of common stock for $3.00 per share in cash (following a previous day per share closing price of $2.82). In addition, Thomas Sullivan, the President of F9, delivered notice to the Company that the F9 Parties intended to nominate three candidates to stand for election to the Board at the Annual Meeting. F9 also issued a press release and filed an amendment to its Schedule 13D disclosing the foregoing matters. On several occasions throughout the process, the Company’s representatives engaged with F9 and its representatives to discuss, among other things, the possibility of entering into a customary confidentiality and standstill agreement relating to a potential transaction involving the Company.

On November 15, 2023, representatives of JPM and representatives of Live Ventures met to discuss a potential transaction involving the parties and Live Ventures indicated its desire for an in-person management meeting during the week of November 27th.

On November 16, 2023, JPM reached out to representatives of F9 to discuss the possibility of entering into a confidentiality agreement with the Company in order to further engage in an exploration of a transaction involving the parties.

On November 20, 2023, Mr. Hammann provided the Company with completed nomination materials, nominating himself for election to the Board at the Annual Meeting.

On November 28, 2023, the Company held an in-person management presentation with Live Ventures.

On December 4, 2023, the Company received a stockholder nomination notice from Live Ventures, nominating three individuals, who were not employed by Live Ventures, for election to the Board at the Annual Meeting.

On December 5, 2023, the Board held a meeting at which JPM updated the Board on the ongoing exploration of strategic alternatives.

On December 7, 2023, the Company posted an auction draft merger agreement in its virtual data room for access by parties that submitted non-binding indications of interests and remained in the Company’s exploration of strategic alternatives.

On December 12, 2023, representatives on behalf of Mr. Sullivan of F9 submitted an additional request for stockholder nomination materials.

On December 13, 2023, the Company provided Mr. Sullivan with applicable nomination materials, noting that such materials were inadvertently not previously delivered to Mr. Sullivan. Accordingly, the Company requested that Mr. Sullivan’s nominees complete and return the materials by December 29, 2023.

On December 19, 2023, Live Ventures submitted a revised non-binding indication of interest, which, among other things, proposed to decrease the per share price that Live Ventures would pay for all of the outstanding shares of the Company’s common stock to $5.05 per share in cash (following a previous day per share closing price of $3.71) (compared to $5.85 per share in cash offered in Live Ventures’ October 11, 2023 indication of interest) and requesting that the Company grant exclusivity to Live Ventures for an agreed to period of time.

On December 21, 2023, the Board held a meeting with certain members of management, Skadden and JPM present. At such meeting JPM updated the Board on the ongoing exploration of strategic alternatives, including Live Ventures’ reduced offer price in its December 19, 2023 revised indication of interest and its request that the Company grant Live Ventures exclusivity. After discussion, the Board determined that due to, among other things, the fact that Live Ventures was the only party that had submitted an indication of interest with respect to a potential acquisition of the Company who remained interested in pursuing a transaction, the Board would consider entering into a limited-duration exclusivity period with Live Ventures, in exchange for a higher offer. In addition, the Board determined, prior to executing a short-term exclusivity agreement with Live Ventures, to have JPM reach out to the other parties, including F9 and Parties A and C, that had indicated they were no longer interested in pursuing a potential strategic transaction involving the Company to determine if any of such parties had reconsidered their interest in a potential strategic transaction in advance of granting exclusivity to Live Ventures.

On December 22, 2023, Mr. Sullivan provided the Company with completed nomination materials.

Also on December 22, 2023, representatives of Skadden offered to send F9’s counsel a draft of a short-term confidentiality agreement that could be entered into between the Company and the F9 Parties.

On December 26, 2023, F9’s legal counsel discussed with representatives from Skadden the possibility of entering into a short-term confidentiality agreement, subject to certain conditions.

On December 27, 2023, JPM notified F9’s representatives that F9 would need to significantly increase the offer price of $3.00 per share in cash that was reflected in the revised non-binding indication of interest submitted by the F9 Parties on November 14, 2023, in order for the Company to consider entering into a short-term confidentiality agreement with the F9 Parties on the terms requested by the F9 Parties.

On December 28, 2023, F9’s representatives communicated to JPM that the F9 Parties would not increase their offer price above $3.00 per share in cash. The Company and F9 were not able to come to an agreement on the terms of a confidentiality agreement.

Also on December 28, 2023, the Board held a meeting to discuss, among other things, whether to (i) continue to engage with F9 despite its unwillingness to increase its non-binding offer price and (ii) pursue an exclusivity agreement with Live Ventures on the condition that they increase their non-binding offer price. The Board determined it was in the best interest of the Company and its stockholders to pursue a possible exclusivity agreement with Live Ventures’ due to, among other things, Live Ventures’ indication that it would consider increasing its non-binding offer price as a condition for the Company to enter into the exclusivity agreement.

Between December 30, 2023 and January 7, 2024, the Company and Live Ventures exchanged several drafts of the exclusivity agreement and representatives of the Company and Live Ventures discussed the amount of the increase in Live Ventures’ latest non-binding offer $5.05 per share in cash.

On January 7, 2024, the Company and Live Ventures executed the exclusivity agreement, which contemplated a proposal of $5.25 per share and stated, among other things: that the exclusivity period would expire on earlier of (i) 11:59 p.m. New York time, on January 26, 2024, unless if at such time Live Ventures (x) proceeds diligently and in good faith with its due diligence, (y) has made material progress in obtaining financing for a possible transaction involving the Company and (z) has made material efforts in the negotiation of the merger agreement or (ii) the execution of and delivery of a definitive written agreement among the parties for a transaction involving the Company; provided that the exclusivity period could be extended for successive 14-day terms (or such other period) as the parties may mutually agree.

On January 8, 2024, Skadden sent a letter to F9 asking for confirmation that the Sullivan Nominees do not currently serve or reasonably plan to serve on any boards of competitors of the Company such that, if elected to the Board, there would be a violation of Section 8 of the Clayton Act.

On January 10, 2024, F9 sent a letter in response to Skadden’s January 8, 2024 letter regarding service on other competitor boards of directors by the Sullivan Nominees. In the letter, F9 confirmed that no agent or deputy of F9 serves or reasonably plans to serve on any board of directors for a company that competes with the Company. F9 also noted that the sales of CTG, one of its subsidiaries, do not exceed any of the thresholds specified in the Clayton Act.

On January 18, 2024, F9 notified the Company that it was withdrawing its November 14, 2023, non-binding revised indication of interest to acquire all of the Company’s outstanding shares of common stock for $3.00 per share in cash.

On January 25, 2024, Live Ventures provided the Company with a markup of the auction draft of the merger agreement.

On January 26, 2024, the exclusivity agreement with Live Ventures terminated.

Also on January 26, 2024, Party A’s financial advisors indicated to JPM that Party A might be interested in pursuing a transaction involving the Company for a price range between $3-$4 per share.

On February 3, 2024, Live Ventures delivered to the Board a revised non-binding indication of interest with respect to a potential acquisition of all of the Company’s outstanding shares of common stock by Live Ventures for a price of $4.00 per share in cash (following a previous day per share closing price of $2.29) (compared to its offer price of $5.25 per share in cash that was contemplated by the exclusivity agreement).

On February 8, 2024, the Board held a meeting in which JPM provided an update on the Company’s exploration of strategic alternatives. As a result of the limited number of parties continuing to actively engage in discussions with the Company, the Board determined to proceed with discussions with Live Ventures in order to determine if Live Ventures would increase its current non-binding offer price and to follow up with Party A to determine if it would be prepared to submit a revised indication of interest.

On February 9, 2024, representatives of Live Ventures indicated to JPM that Live Ventures may increase its offer price to $4.25 per share in cash, conditioned upon conducting further due diligence of the Company.

In late February 2024, JPM spoke with representatives of Live Ventures, during which discussion the representatives of Live Ventures indicated they had made progress on obtaining commitments for the necessary debt financing for a potential acquisition of the Company.

In late February 2024, Party A’s financial advisors informed JPM that Party A was no longer going to pursue a transaction involving the Company.

On March 1, 2024, the Board held an update session with certain members of management and representatives from Skadden and JPM to receive an update on the ongoing discussions with Live Ventures.

On March 2, 2024, Live Ventures sent a letter to the Board reconfirming its interest in pursuing a transaction involving the Company and an update on Live Ventures obtaining the requisite financing in connection therewith.

Throughout March and April 2024, the Company, JPM and Skadden engaged in numerous discussions with Live Ventures and its representatives in connection with the potential merger agreement and Live Ventures’ efforts to obtain committed debt financing. During this period, Live Ventures continued to conduct due diligence with respect to the Company and its recent performance.

On April 11, 2024, counsel for F9 sent a letter to Skadden demanding that the Company set a date for the Annual Meeting (which letter was also disclosed in an amendment to F9’s Schedule 13D).

On April 11 and 12, 2024, representatives of Live Ventures discussed with Skadden that, in light of F9’s continued campaign and the possibility of an election contest at the Annual Meeting, Live Ventures and the Company should explore the possibility of entering into a cooperation agreement, pursuant to which, among other things, Live Ventures would agree to withdraw its nomination notice submitted on December 5, 2023.

On April 12, 2024, Live Ventures, after having received updated information relating to the Company’s performance, sent a letter to the Company, noting, among other things, (i) the current status of its consideration of a possible acquisition of the Company, (ii) its belief that it could obtain firm commitment letters from its potential debt financing sources for an acquisition of the Company, (iii) that it was reducing its offer price to

acquire all of the Company’s outstanding shares of common stock to $2.50 per share in cash (following a previous day per share closing price of $1.75) (compared to the offer price of $4.00 per share in cash contemplated in its February 3, 2024 non-binding indication of interest) and (iv) the possibility of entering into a cooperation agreement between Live Ventures and the Company to resolve the threatened proxy contest by Live Ventures with respect to the Annual Meeting.

Between April 16, 2024 and April 29, 2024, Skadden and Live Ventures’ legal counsel exchanged drafts and negotiated a potential cooperation agreement to be entered into between the Company and Live Ventures and engaged in discussions regarding such matters.

On April 23, 2024, the Company filed a Form 8-K announcing, among other things, that (i) the Annual Meeting would be held on July 10, 2024 and (ii) the record date for the Annual Meeting would be May 21, 2024.

On April 29, 2024, the Company and Live Ventures executed a cooperation agreement and the Company issued a press release and filed a Form 8-K announcing such cooperation agreement. The cooperation agreement provides that, among other things:

On May 2, 2024, F9 resubmitted its nomination notice to the Company (which was also disclosed in an amendment to F9’s Schedule 13D).

On May 6 and 7, 2024, representatives of the Nominating and Corporate Governance Committee interviewed the Sullivan Nominees and the Hammann Nominee.

On May 8, 2024, the Company filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and held its First Quarter 2024 earnings call, disclosing, among other things, (i) the Company’s current liquidity outlook and the Company’s plans to sell and leaseback its approximately 1 million square foot Sandston, VA Distribution Center, in order to provide the Company with additional liquidity and (ii) that the Company had retained Houlihan Lokey to evaluate financing alternatives.

On May 9, 2024, the Nominating and Corporate Governance Committee, after reviewing the skills and qualifications of each nominee eligible for election to the Board and the potential conflicts that could arise if the Sullivan Nominees were elected to the Board, recommended to the Board that the Board nominate and support the election of each of Douglas T. Moore, Ashish Parmar and Nancy M. Taylor.

On May 10, 2024, the Company filed its preliminary proxy statement in connection with the Annual Meeting.

The size of the Board is currently fixed by resolution of the Board at nine 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. Our Class I directors’ terms will end at the Annual Meeting of Stockholders in 2025. Our Class II directors’ terms will end at the Annual Meeting of Stockholders in 2026. 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.

If Proposal 3 (approval of the declassification amendment) is approved by stockholders, we will begin our phased transition to a declassified Board structure beginning at our 2025 Annual Meeting of Stockholders. See “Proposal 3 - Approval of Declassification Amendment” for additional information.

Stockholders will be asked to elect three directors at the Annual Meeting. Stockholders cannot vote “FOR” more than three directors at the Annual Meeting.

As described in the following pages, in considering candidates for election to the Board, the Nominating and Corporate Governance Committee and the Board consider a number of factors, including the ability of the prospective nominees to represent the interests of the shareholders of the Company, the extent to which the prospective nominees contribute to the range of talent, skill and expertise appropriate for the Board and the extent to which the prospective nominees help the Board reflect the diversity of the Company’s shareholders, employees, customers and the communities in which it operates.

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 below have consented to be nominated and to serve if elected. We do not expect that any nominee will be unable to serve.

Should all of the Board’s Class III director nominees be elected to our Board, the director classes after the 2024 Annual Meeting of Stockholders will be as follows:

As described under “Background to the Solicitation” above, based upon the Company’s criteria for nominations of directors to the Board and the unanimous recommendation of the Nominating and Corporate Governance Committee, the Board unanimously determined to nominate Douglas T. Moore, Ashish Parmar and Nancy M. Taylor for re-election to the Board as Class III directors for a three-year term ending at the Annual Meeting of Stockholders in 2027.

As described previously, Thomas D. Sullivan has notified the Company of his intent to nominate himself, John Jason Delves and Jill Witter (collectively, the “Sullivan Nominees”) for election as directors at the Annual Meeting. Mr. Hammann has notified the Company of his intent to nominate himself for election as a director at the Annual Meeting. As a result, assuming such nominees are in fact proposed for election at the Annual Meeting and all such nominations have not been withdrawn by Mr. Sullivan and Mr. Hammann, the election of directors will be considered a contested election under Article III, Section 2 of the Company’s Second Amended and Restated Bylaws. Directors will be elected on a plurality basis and the three director nominees receiving the greatest number of votes cast “FOR” their election will be elected. “WITHHOLD” votes and any broker non-votes (as described under “Additional Information”) will be counted for purposes of determining if there is a quorum at the Annual Meeting for this vote but will not be counted as votes cast and will result in the applicable nominee(s) receiving fewer votes cast “FOR” such nominee(s).

The Board does not endorse the Sullivan Nominees or the nomination of Mr. Hammann, and unanimously recommends that you use the WHITE proxy card to vote “FOR” ONLY the election of the three nominees proposed by the Board (Douglas T. Moore, Ashish Parmar and Nancy M. Taylor). The Board strongly urges you to discard and NOT to vote using any [●] proxy card that may be sent to you by the Sullivan Nominees or a [●] proxy card that may be sent to you by Mr. Hammann. If you have already voted using a [●] proxy card sent to you by the Sullivan Nominees or a [●] proxy card sent to you by Mr. Hammann, you have every right to change your vote and we strongly encourage you to revoke that proxy by using the WHITE proxy card to vote in favor of ONLY the three nominees recommended by the Board – by Internet or by signing, dating and returning the enclosed WHITE proxy card in the postage-paid envelope provided. Only the latest validly executed proxy that you submit will be counted — any proxy may be revoked at any time prior to its exercise at the Annual Meeting. If you have any questions or require any assistance with voting your shares, please contact our proxy solicitor, Saratoga, at (888) 368-0379 or (212) 257-1311 or by email at info@saratogaproxy.com.

In the event that either Mr. Sullivan or Mr. Hammann withdraw their nominees, abandon their solicitations or fail to comply with the universal proxy rules after a shareholder has already granted proxy authority, shareholders can still sign and date a later submitted WHITE proxy card.

In the event that either Mr. Sullivan or Mr. Hammann withdraw their nominees, abandon their solicitation or fails to comply with the universal proxy rules, any votes cast in favor of any Sullivan Nominee or Mr. Hammann, as applicable, will be disregarded and not be counted, whether such vote is provided on the Company’s WHITE proxy card, the Sullivan Nominees [●] proxy card or Mr. Hammann’s [●] proxy card.

Although the Company is required to include all nominees for election on its proxy card, for additional information regarding the Sullivan Nominees and any other related information, please refer to Mr. Sullivan’s proxy statement, and for additional information regarding Mr. Hammann and any other related information, please refer to Mr. Hammann’s proxy statement. You may receive solicitation materials from the Sullivan Nominees, including proxy statements and [●] cards, and from the Mr. Hammann, including proxy statements and [●] cards. The Company is not responsible for the accuracy or completeness of any information provided by or relating to (a) Thomas Sullivan, F9, or his nominees contained in solicitation materials filed or disseminated by or on behalf of Mr. Sullivan or any other statements Mr. Sullivan or the Sullivan Nominees may make or (b) Mr. Hammann contained in solicitation materials filed or disseminated by or on behalf of Mr. Hammann or any other statements Mr. Hammann may make. Even if you would like to elect the Hammann Nominee or some or all of the Sullivan Nominees, we strongly recommend you use the Company’s WHITE universal proxy card to do so. Shareholders will be able to obtain, free of charge, copies of all proxy statements, any amendments or supplements thereto

and any other documents (including the WHITE proxy card) when filed by the applicable party with the Securities and Exchange Commission (“SEC”) in connection with the Annual Meeting at the SEC’s website (http://www.sec.gov).

If you are a registered holder and submit a validly executed WHITE proxy card but do not specify how you want to vote your shares with respect to the election of directors, then your shares will be voted in line with the Board’s recommendation with respect to the proposal, i.e., “FOR” the three nominees proposed by the Board and named in this proxy statement. You are permitted to vote for fewer than three nominees. If you vote for fewer than three nominees, your shares will only be voted “FOR” those nominees you have so marked. However, if you are a registered holder and submit a validly executed WHITE proxy card but vote “FOR” more than three nominees, all of your votes with respect to the election of directors will be invalid and will not be counted. It is therefore important that you do not vote ”FOR” more than three nominees so that your vote with respect to this item is counted.

If you are a beneficial holder and properly mark, sign and return your WHITE voting instruction form or use your WHITE voting instruction form or notice to vote via Internet, your shares will be voted as you direct your bank or broker. However, if you sign and return your WHITE voting instruction form but do not specify how you want your shares voted with respect to the election of directors, your bank or broker does not have authority to vote on the proposal. You are permitted to vote for fewer than three nominees. If you vote for fewer than three nominees, your shares will only be voted “FOR” those nominees you have so marked. If you are a beneficial holder and you vote “FOR” more than three nominees on your WHITE voting instruction form, all of your votes with respect to the election of directors will be invalid and will not be counted. It is therefore important that you provide specific instructions to your broker or bank regarding the election of directors so that your vote with respect to this item is counted.

Each nominee has consented to serve if elected. If any nominee becomes unavailable to serve as a director before the Annual Meeting, the Board may designate a substitute nominee. In that case, the persons named as proxies will vote for the substitute nominee designated by the Board. At this time, the Board knows of no reason why any of the Board’s nominees would not be able to serve as a director if elected.

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 associates, 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, https://investors.llflooring.com/corporate-governance, and are also available in print, free of charge, to any stockholder who requests them. Such requests should be directed to Corporate Secretary, LL Flooring Holdings, Inc., 4901 Bakers Mill Lane, Richmond, Virginia 23230.

Independence

All of our directors, other than our Chief Executive Officer, are independent. The Board, in its business judgment, has affirmatively determined that the following eight of its nine current members are independent, including under the applicable independence standards contained in the rules of the New York Stock Exchange (“NYSE”): Terri Funk Graham, David A. Levin, Douglas T. Moore, Joseph M. Nowicki, Ashish Parmar, Famous P. Rhodes, Martin F. Roper and Nancy M. Taylor. 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. Some non-management directors or their related parties have purchased products and services from us in the ordinary course of business or have made purchases from us using the Company’s discount policy applicable to all employees and directors. We consider such purchases to be immaterial to such director’s independence.

Board Leadership Structure – Independent Chairperson

The Board regularly evaluates relevant factors to determine the best leadership structure for our operating and governance environment at the time. Our Bylaws currently require that we separate the offices of the Chief Executive Officer and Chairperson of the Board. Specifically, our Bylaws, among other things, require that we have a Chairperson of the Board who 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.

We believe having separate Chief Executive Officer and Chairperson of the Board positions is the most appropriate structure for our Company at this time. Ms. Taylor, who is an independent director, was first appointed Chairperson on November 16, 2015, and continues in that role. Beginning in February 2020, Mr. Tyson served as Interim President and Principal Executive Officer until his appointment in May 2020 as President and Chief Executive Officer and a director of the Company. We believe it is most effective for Mr. Tyson 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 the Compensation Committee, the performance of the Chief Executive Officer; and (vii) presiding at all meetings of the Board, including executive sessions of 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 entirely of directors that 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. Each committee charter includes oversight responsibilities for environmental, social and governance (“ESG”) matters, as discussed on page [•]. The charters of all four standing committees are available at the investor relations page of our website at https://investors.llflooring.com/committee-charters 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:

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 relating to: (i) the integrity of our financial statements and financial reporting process and our systems of internal accounting and financial controls; (ii) the performance of the internal audit function; (iii) the annual independent audit of our financial statements; (iv) the engagement of our independent auditor and the evaluation of the independent auditor’s qualifications, independence and performance; (v) our compliance with legal and regulatory requirements as it relates to accounting, auditing and financial reporting matters; (vi) the

implementation and effectiveness of our disclosure controls and procedures and internal control over financial reporting; (vii) the framework for identification of enterprise risks; and (viii) other matters set forth in the charter of the Audit Committee. The Audit Committee has the sole authority to appoint, retain, compensate, evaluate, and terminate the independent auditor. The Audit Committee approves procedures for the pre-approval of the engagement of the independent auditor to provide audit and non-audit services. It is also responsible for establishing, publishing, and maintaining and overseeing our “whistleblower” procedures. The Audit Committee is responsible for reviewing and discussing with management the type and presentation of the Company’s ESG disclosures included in the Company’s periodic reporting or financial statements and the adequacy and effectiveness of applicable internal controls related to such disclosures. In addition, the Audit Committee periodically reviews and discusses with management the Company’s risks relating to cybersecurity, data privacy, and other information technology risks, controls and procedures.

The Board, in its business judgment, has determined that all of the current members of the Audit Committee are, and each member who served on the Audit Committee during 2023 was, during the period in which he served, 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. Nowicki qualifies as an “audit committee financial expert” as defined by regulations of the SEC. For additional information regarding the Audit Committee, please see the Audit Committee Report that is included in this Proxy Statement.

Compensation Committee. The purpose of the Compensation Committee is to oversee the policy and programs relating to the compensation of our executive officers, including policies governing salaries, incentive compensation and terms and conditions of employment (with the Board having final approval for the compensation of the Chief Executive Officer). The Compensation Committee also is responsible for periodically reviewing the Company’s strategies related to human capital management, including talent acquisition, development and retention, and diversity, equity and inclusion initiatives.

The Compensation Committee has engaged Pearl Meyer, a nationally recognized compensation consulting firm, as its compensation consultant and uses Pearl Meyer 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. Refer to the section titled “Executive Compensation” for additional information.

The Board, in its business judgment, has determined that all of the current members of the Compensation Committee are independent, as determined in accordance with the rules of the NYSE and any relevant federal securities laws and regulations.

Nominating and Corporate Governance Committee. The purpose of the Nominating and Corporate Governance Committee is to identify individuals qualified to become members of the Board consistent with the criteria approved by the Board, to recommend director nominees for election at each annual meeting of stockholders and to address related matters. In performing these duties, the Nominating and Corporate Governance Committee uses a professional search firm to identify potential candidates. The Nominating and Corporate Governance Committee also develops and recommends to the Board applicable corporate governance principles, determines the form and amount of director compensation, and leads and oversees the annual review of the Board and its standing committees’ performance. The Nominating and Corporate Governance Committee advises the Board with respect to the oversight of ESG topics by the various standing committees of the Board and reviews and discusses with management the Company’s governance of corporate social responsibility and environmental efforts.

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 in accordance with the Company’s Bylaws. 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 (present and for the past five years); (ii) the principal occupation or employment of each such nominee; (iii) the Specified Information (as defined in the Bylaws) for each nominee and any member of the immediate family of such nominee, Affiliate or Associate (each as defined in the Bylaws); (iv) a description of any agreement, arrangement or understanding of the type described in Article II, Section 17, clause (a)(iii)(C)(iii) or (a)(iii)(C)(iv) 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 complete, accurate and detailed description of such agreement, arrangement or understanding (whether written or oral) 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 Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder; (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; and (viii) with respect to each nominee for election or reelection to the Board, a completed and signed questionnaire, representation and agreement and any and all other information as required by clause (a)(iii)(B) of Section 17 of Article II of the Bylaws. In addition, the Company’s Corporate Governance Guidelines provide that directors must sign a Board-approved confidentiality agreement which prohibits them from disclosing Confidential Information to anyone outside of the Company, specifically including any principal or employee of any entity that employs the director or has sponsored the director’s election to the Board.

In addition, each nominee must deliver in writing (i) a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be provided by the Corporate Secretary upon written request of any stockholder of record identified by name within five business days) and (ii) a written representation and agreement (in the form provided by the Corporate Secretary upon written request of any stockholder of record identified by name within five business days) that such person (a) is not and will not become a party to (1) any agreement, arrangement or understanding (whether written or oral) with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director, with such person’s fiduciary duties under applicable law; (b) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect

compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed to the Corporation, and (c) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director, and will comply with all applicable rules of the exchanges upon which the securities of the Corporation are listed and all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.

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 2025 Annual Meeting, the nomination must be received within the time frame set forth in “Deadlines for Submission of Stockholder Proposals & Director Nominations” on page [•]. 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.

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 and to oversee the processes by which we conduct our business to ensure we do so in a manner that complies with applicable laws and regulations and reflects our high standards of integrity. The Compliance and Regulatory Affairs Committee oversees the regulatory, trade and environmental impact of the Company’s product and supplier relationships, the human capital practices expected of the Company’s vendors, and the Company’s responsible sourcing practices with respect to merchandise procurement.

The Compliance and Regulatory Affairs Committee may, in its discretion, engage outside consultants to advise the Compliance and Regulatory Affairs Committee. The Board, in its business judgment, has determined that all of the current members of the Compliance and Regulatory Affairs Committee are independent, as determined in accordance with the rules of the NYSE and any relevant federal securities laws and regulations.

Board Oversight of Environmental, Social and Governance (“ESG”)

Our Board and Board Committees oversee all aspects of our ESG goals, policies and initiatives as shown in more detail in the following table. Board Committees periodically report to the full Board in regard to their oversight of aspects of ESG goals, policies and initiatives within the Board committees’ purview.

Board Diversity

In determining the composition of the Board, the Nominating and Corporate Governance Committee seeks to include a diverse and complementary 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. Our directors represent a range of backgrounds and overall experience. Approximately 22% of our directors are female. Our Board is committed to improving its diversity and will make appointing a qualified female Board member in its next director search a priority. Ms. Graham and Ms. Taylor each serve in leadership roles on our Board as Committee Chair and Board Chair, respectively.

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. Our directors have a varied tenure, providing for a range of perspectives and fresh ideas and ensuring the transfer of knowledge and experience from longer-serving members. 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.

Risk Management

We have developed and implemented processes designed to manage risk in our business. The Board’s role in regard to risk is primarily one of oversight with the day-to-day responsibility for risk management being with 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 its committees, which report regularly to the Board on their activities, and various presentations by management to the Board.

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 cybersecurity, and assesses our risk profile with management and our 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 practices. 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 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 practices 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 associates 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 clawback provisions, caps on our incentive plans, 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 policies and practices, including the allocation between fixed and variable compensation and short-term and long-term compensation, we have concluded that they do not create risks that are reasonably likely to have a materially adverse effect on the Company.

Board and Standing Committee Attendance and Executive Sessions

Each member of the Board is expected to attend Annual Meetings of Stockholders in person. All of our directors serving at the time attended the 2023 Annual Meeting of Stockholders in person.

At the regularly scheduled meetings of the Board, it is the practice of the Board to hold an executive session of the independent directors. At these sessions, the Chairperson of the Board presides over each of these sessions.

During fiscal year 2023, each director attended at least 75% of the meetings of the Board and committees on which he or she served.

Communications to the Board

Stockholders, associates, 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, LL Flooring Holdings, Inc., 4901 Bakers Mill Lane, Richmond, Virginia 23230, 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.

Political Contributions Policy

Our Bylaws provide that the Board will ensure that any lobbying or political activity is conducted solely for promoting our commercial interests and is in the interest of our stockholders. As part of this oversight, the Board will ensure that lobbying and political spending do not reflect narrow political preferences or the political preferences of our executives that have little or no bearing on our own commercial performance. In fiscal year 2023, we did not engage in any lobbying or political activities. We are a member of the National Retail Federation, which is a trade association representing the retail industry.

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. Any transactions between the Company and a related person that involve an amount exceeding $10,000 are reviewed with the Audit Committee.

The Audit Committee evaluates each related person transaction and may approve or ratify the related person Transaction only if the Audit Committee determines that, under all of the circumstances, the transaction is in, or is not inconsistent with, the interests of the Company and its stockholders. The Audit Committee will prohibit any related person transaction that it determines to be inconsistent with the interests of the Company and its stockholders. Relevant factors considered by the Audit Committee when evaluating a related person transaction include:

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.

Beginning in the second quarter of 2023, F9 filed a Schedule 13D with the SEC indicating beneficial ownership of more than 5% of the Company’s voting securities. During 2023, the Company leased 29 of its store locations, representing 6.5% of the total number of store leases in operation, from entities controlled by F9 Investments, LLC. Rental expense for the fiscal year ended December 31, 2024, was $2.9 million. The Company is charged rent for these locations at rates believed to be at fair market value.

Shareholder Engagement

We had strong support for all of our proposals at the Annual Meeting in May 2023, except for the proposal to declassify the Board. We routinely engage in discussions with shareholders about the Company’s strategic and financial results. In addition, we also engage with shareholders our corporate governance practices, Board composition, human capital management efforts, diversity, equity and inclusion initiatives, environmental matters, responsible sourcing initiatives, and Board oversight of ESG. Depending on the topic, our Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, or Chief Human Resources Officer participate in these investor conversations. We report back to the Board and the relevant committees on the key themes and messages from our engagement with shareholders. Due in part to feedback from these discussions, we are re-submitting a proposal at this Annual Meeting to declassify the Board beginning at the Annual Meeting of Stockholders in 2025. We intend to continue to engage with shareholders and are committed to soliciting their views and input.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (“ESG”)

We are committed to ESG matters and being a responsible corporate citizen. The following areas are the focus of our corporate responsibility program. In May 2024, we published our second ESG report, which is available on our ESG web page at https://investors.llflooring.com/ESG.

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 employed by us do not receive compensation for their service on the Board or any Board committee. The Board did not make any changes to this compensation in 2023.

The following table sets forth the 2023 – 2024 compensation for our non-employee directors:

2023 Non-Employee Director Compensation

In 2023, our non-employee directors received a portion of the payment for the retainers in restricted stock and a portion in cash. The restricted stock portion of the retainer was granted on the date of the 2023 Annual Meeting and vests on the date of the 2024 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. 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). We reimburse non-

employee directors for reasonable out-of-pocket expenses incurred in connection with their service as directors, including travel expenses for meeting attendance. We also permit our directors to participate in employee discount programs available to all our associates.

Our non-employee directors are subject to stock ownership guidelines, as described on page [•].

Director Compensation Table

The following table sets forth compensation earned by our directors who are not named executive officers in the fiscal year ended December 31, 2023:

Outside Directors Deferral Plan

In November 2008, the Board adopted the Deferral Plan under which each of our non-employee directors can 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.

In September 2022, the Board amended and restated the Deferral Plan to provide that a director may elect to have his or her deferred stock units settled in common stock in one of three timeframes upon the director’s departure from the Board: (i) in one lump-sum payment 60 days following his or her separation from service on the Board, (ii) in annual distributions over a three-year period beginning sixty days following his or her separation from service on the Board, or (ii) in annual distributions over a five-year period beginning sixty days following his or her separation from service on the Board. Previously, the Deferral Plan provided for all deferred stock units to be settled in one lump-sum payment 60 days following a director’s departure from the Board. The new timeframe elections will apply to elections made for deferrals beginning in 2023.

There was an aggregate of 377,701 deferred stock units outstanding at December 31, 2023.

Section 14A of the Exchange Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 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, and we intend to engage with stockholders this year on the outcome of this year’s vote. 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 2025 Annual Meeting of Stockholders.

Accordingly, we ask our stockholders to vote on the following advisory 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 that follows, 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, short- versus long-term incentives, 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 driving 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 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.

EXECUTIVE OFFICERS

The following sets forth biographical information for our executive officers (as defined by Rule 3b-7 of the Exchange Act) and certain other significant associates. Such information with respect to our President and Chief Executive Officer, Charles E. Tyson, is set forth above in the “Proposal 1 – Election of Directors – Incumbent Directors Whose Terms Expire in 2026 (Class II)” section.

Matthew T. Argano, Ph.D., 51, was our Senior Vice President, Chief Human Resources Officer from April 2020 until May 10, 2024. Prior to joining the Company, Dr. Argano was Senior Vice President, Chief People Officer of Altar’d State, Inc., a women’s fashion retailer from 2016 to 2020. From 2012 to 2016, Dr. Argano was Senior Vice President, Human Resources of The Fresh Market, Inc., a specialty grocery retailer.

Douglas S. Clark, Jr., 45, has been our Senior Vice President, Merchandising and Supply Chain since June 2020. Mr. Clark previously served as our Interim Senior Vice President, Merchandising and Supply Chain from February 2020 to June 2020 and served as Senior Vice President, Supply Chain from October 2018 to February 2020 and as Vice President, Inventory Management from February 2017 to October 2018. Prior to joining the Company, Mr. Clark held merchandising roles of increasing responsibility at DSW, Inc., a retailer of shoes and fashion accessories, most recently as Vice President, Merchandise Analysis & Operations from September 2016 to February 2017.

Alice G. Givens, 52, has been our Senior Vice President, Chief Legal, Ethics and Compliance Officer and Corporate Secretary since October 2022 and, prior to that, was Senior Vice President, Chief Legal Officer and Corporate Secretary from September 2020 to October 2022. Prior to joining the Company, Ms. Givens was Senior Vice President, General Counsel, Chief Compliance Officer and Secretary of Ruth’s Hospitality Group, Inc. (“RHGI”), a fine dining restaurant company, from 2019 to 2020 and Vice President, General Counsel, Chief Compliance Officer & Secretary of RHGI from 2016 to 2019. From 2007 to 2016, Ms. Givens served as a legal officer at J. Crew Group, Inc., an omnichannel retailer of apparel, shoes, and accessories, where she most recently was Vice President and Associate General Counsel from 2012 to 2016.

Kristian B. Lesher, 54, has been our Senior Vice President and Chief Technology Officer since January 2023. Prior to joining the Company, Mr. Lesher served as Vice President, Customer Facing Technologies, of Advance Auto Parts, Inc., an automotive aftermarket parts provider, from May 2015 until January 2023, and as Director of eCommerce Systems and Enterprise Services from April 2009 until May 2015.

Robert L. Madore, 59, has been our Executive Vice President and Chief Financial Officer since July 2023. Prior to his appointment, Mr. Madore served as Interim Chief Financial Officer of F45 Training Holdings, Inc., a global fitness franchisor, from February 2023 to July 2023. Prior to joining F45, Mr. Madore was the Chief Financial Officer of Cronos Group from 2021-2022 and EVP and Chief Financial Officer of American Eagle Outfitters, Inc. from 2016-2020. From 2004 until 2016, Mr. Madore was with Ralph Lauren Corporation, including as Chief Financial Officer from 2015-2016, SVP Corporate Finance from 2011-2014, and Chief Financial Officer/SVP of Operations of Ralph Lauren Retail Group from 2004-2011. Mr. Madore is a Certified Public Accountant.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Our compensation philosophy is to maintain effective compensation programs that are as practical 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 associates 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 associates to take unnecessary or excessive risks that could result in material adverse risk to the Company.

Compensation Governance Features

We believe the following practices and policies promote sound compensation governance and are in the best interests of our stockholders and executives:

2023 Say On Pay Results

Our Compensation Committee and Board are very interested in the ideas and any concerns of our stockholders regarding executive compensation. An advisory vote on executive compensation was presented to our stockholders at last year’s Annual Meeting of Stockholders and was approved by 88% of votes cast by

stockholders. As our compensation programs continue to evolve, we will continue to seek input from our stockholders and reflet that in the structure of our compensation programs.

What Guides Our Program

Compensation Philosophy & Objectives

Our executive compensation program is designed to:

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:

Elements of Pay

The Company’s compensation philosophy is supported by the following principal elements of pay:

Pay Mix

Our compensation program utilizes a mix of compensation elements, including base salary, short-term incentives, and long-term incentives.

The Decision-Making Process

The Role of the Compensation Committee. Details of the Compensation Committee’s authority and responsibilities are specified in its charter, a copy of which is available on our investor relations page of our website at: https://investors.llflooring.com/committee-charters.

The Role of the Independent Compensation Consultant. The Compensation Committee has engaged Pearl Meyer as its independent compensation consultant. The Compensation Committee relies on Pearl Meyer for input on pay philosophy, current market trends, regulatory considerations, selection of the peer group, competitive market analysis and incentive plan design. Additionally, Pearl Meyer provides information about market trends in director pay practices and advises the Nominating and Corporate Governance Committee and the Board on director compensation program pay level and design.

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 Exchange Act, and other factors, determined that Pearl Meyer was independent and that its engagement did not present any conflicts of interest. Pearl Meyer 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 Chairperson of the Compensation Committee.

Pearl Meyer reports directly to the Compensation Committee on all work assigned by the Compensation Committee. Pearl Meyer also interacts with management when necessary and appropriate to carry out its assignments. Pearl Meyer, 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.

Peer Group

The Compensation Committee may engage Pearl Meyer to review and assess the Company’s executive officer compensation program for purposes of assessing compensation components and levels for the following year. A review of the compensation peer group was conducted in the fall of 2022 to develop the 2023 peer group. This

review focused on the composition of the peer group relative to the Company in terms of industry sector, revenues, market capitalization, growth and profitability. The review also considered overlap between the Company’s peer group and the peer groups selected by proxy advisory firms. Pearl Meyer recommended the addition of two new companies to the peer group. As a result, the Committee determined American Woodmark Corporation and Tile Shop Holdings, Inc. be added. The following is a list of companies included in the peer group used for 2023 compensation decisions:

2023 Executive Compensation Program in Detail

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.

The following table outlines the base salary adjustments provided to our named executive officers for 2023:

Annual Cash Bonus Awards

In 2023, 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 performance, internal equity considerations, and position. Historically, the maximum potential annual cash bonus award that the executive officers could achieve was 200% of target and the amount of the bonus payable at the threshold level of performance was 50%. Results below threshold result in no cash bonus paid.

For the 2023 Bonus Plan, the Compensation Committee reduced the payout levels under the Bonus Plan to make the Bonus Plan more affordable in light of the business challenges in 2023. As a result, the maximum potential annual cash bonus award that the executive officers could achieve was 100% of target and the amount of the bonus payable at the threshold level of performance was 25%. Results below threshold result in no cash bonus paid. 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 2023 Bonus Plan, the Compensation Committee also determined that it would not use Adjusted Operating Income as a metric in 2023 given the economic uncertainty and instead added Gross Margin Rate as a metric related to profitability. The 2023 Bonus Plan approved by the Compensation Committee was based 50% on Net Sales, 30% on Adjusted Gross Margin and 20% on a strategic goal related to deployment and utilization of a customer relationship management system (the “Strategic Goal”). Achievement of the Strategic Goal required that the Company (a) execute the four-stage deployment schedule launching customer relationship management capabilities to all store associates in August 2023, and (b) achieve 100% utilization of 1:1 activities/opportunities ratio by 80% of the stores by the end of 2023. Achievement of the Strategic Goal required both of these outcomes.

The performance goals for the 2023 Bonus Plan were as follows:

The following table provides the amount of the award under the Bonus Plan for each named executive officer:

Long-Term Equity Incentive Awards

The long-term component of our compensation program consists of equity awards. We intend equity awards to be a meaningful portion of our named executive officers’ total compensation in order to align their interests with our long-term growth and the creation of stockholder value as well as to promote retention of our executive team.

Historically, we issued annual equity awards using a mix of 50% performance-based restricted stock, 25% time-based restricted stock (which vest ratably over four years), and 25% stock options (which vest ratably over four years). In 2022, Pearl Meyer conducted an analysis of the market practices among the Company’s peer group with respect to short- and long-term incentive plan practices. For the long-term incentive plan, they noted that a vesting period of three years and a mix of time-based restricted stock and performance-based restricted stock was most prevalent.

As a result of this benchmarking, in March 2023 the Committee issued annual equity awards using a mix of 50% performance-based restricted stock and 50% time-based restricted stock (which vest ratably over three years).

The performance-based restricted stock granted historically vested based on obtaining an adjusted EBITDA goal. For the 2023 performance-based restricted stock grant, the Committee determined it would use a three-year relative total shareholder return (“rTSR”) compared to the S&P 600 Retailing Industry Group as the performance measure. This decision was based on the economic uncertainty, headwinds from customs issues related to vinyl flooring and challenges with historic plan performance.

For the 2023 performance-based restricted stock grant, none of these shares will vest unless the rTSR performance objectives are achieved at threshold, with payouts of 25% and 200% of target, for relative performance at the 25^th and 75^th percentiles, respectively. Any awards earned at the end of the three-year performance period will be paid at that time.

2023 Target Long-Term Incentive Award Grants

The table below shows the target annual long-term incentive award values granted for fiscal 2023 for each of the named executive officers:

2021-2023 Long-Term Incentive Awards

In February 2021, the Company granted a performance-based restricted stock award that would vest based on obtaining an adjusted EBITDA goal over a three-year performance period from January 1, 2021 through December 31, 2023. None of these shares of performance-based restricted stock would vest unless the performance objectives were achieved at threshold or above. Actual performance over the three-year performance period ending December 31, 2023 was below threshold; therefore, none of these awards were earned or vested.

* Adjusted EBITDA is a non-GAAP measure equal to net (loss) income before interest expense, income tax (benefit) expense, depreciation and amortization, as further adjusted to exclude the effect of antidumping and countervailing adjustments, (recovery) accrual for legal matters and settlements, legal and professional fees, and goodwill impairment charges.

Other Practices, Policies & Guidelines

Stock Ownership Guidelines

We have a stock ownership guidelines policy (the “Ownership Requirements”) for our non-employee directors and certain of 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 Requirements are expected to meet the applicable requirement no more than five years after first becoming subject to them and are expected to continuously own sufficient shares to meet the applicable requirement once attained. In the past five years, with the exception of one transaction in 2001, no current director or executive officer has sold any common stock of the Company and three directors have made open market purchases of additional shares of common stock. Due to a decline in the value of the Company’s stock, none of our executive officers and directors, except for Mr. Roper, were in compliance with the holding requirements in the Ownership Requirements as of December 31, 2023. As a result, the Ownership Requirements provide that each such officer and director is prohibited from selling any common stock of the Company.

Stock that may be considered in determining compliance with the Ownership Requirements includes:

The Compensation Committee is responsible for monitoring the application of the Ownership Requirements as it pertains to our executive officers, and the Nominating and Corporate Governance Committee is responsible for monitoring the application of the Ownership Requirements as it pertains to our non-employee directors.

Clawback Provisions

In 2023 we updated our policy for the recovery of erroneously awarded compensation to add requirements for the mandatory clawback of incentive compensation following an accounting restatement, as required by NYSE listing standards. The policy applies to current and former executive officers of the Company, including the named executive officers. In the event the Company is required to prepare an accounting restatement to correct material noncompliance with any financial reporting requirement under U.S. federal securities laws, it is the Company’s policy to recovery erroneously awarded incentive-based compensation received by its executive officers, with certain limited exceptions permitted under the NYSE listing standards. The recovery of such compensation applies regardless of whether an executive officer engaged in misconduct or otherwise caused or contributed to the requirement for a restatement.

We have also retained discretion in our equity incentive award agreements to recover, as deemed appropriate and to the extent permitted by law, any equity incentive compensation awarded to or received by an employee 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. This provision applies to the proceeds of all or a portion of the equity awarded within the three fiscal year-period preceding the date of such restatement. The forfeited or repayment amount shall equal the difference between the Restricted Stock awarded to the employee and the amount, if any, that would have been granted based on the restated financial statements. The Compensation Committee shall determine and approve the amount of such forfeited or repayment amount. Repayment required under the equity award agreements shall be enforced by the Board or its delegate, in the manner the Board or its delegate determines to be appropriate.

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 associates 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 or monetization 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.

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 associates 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 associates to contribute up to 50% of their eligible compensation on an after-tax basis. Consistent with the 401(k) plan, we match 100% of the first 3% of employee contributions and 50% of the next 2% of employee contributions. This matching contribution is allocated to both traditional 401(k) deferrals and Roth contributions. Associates are immediately 100% vested in the Company’s matching contributions. In 2022, each of the named executive officers contributed to the 401(k) plan and received matching contributions consistent with our Company-wide program described above.

Severance Agreements

We have entered into Severance Agreements with each of the named executive officers, as well as other members of the executive team. The Severance Agreements provide for a fixed term and certain severance payments and benefits to these executives upon termination of their employment under defined circumstances, including in connection with a change-in-control. In addition, in connection with the execution of the Severance Agreements, the Company and each of these executives entered into Confidentiality, Non-Solicitation and Non-Competition Agreements (the “Non-Compete Agreements”). For further discussion of the Severance Agreements, see the “Potential Payments Upon Termination or Change of Control” herein.

Tax Deductibility Under Section 162(m)

Section 162(m) of the Internal Revenue Code generally sets a limit of $1 million on the amount of compensation that we may deduct for federal income tax purposes in any given year with respect to the compensation of each of our named executive officers. Effective for the years beginning on or after January 1, 2018, there is no exception under Section 162(m) for qualified performance-based compensation.

We will continue to consider the impact of the deduction limit under Section 162(m) when developing and implementing our executive compensation programs, but we believe the primary purpose of our executive compensation arrangements is to support our business strategy and the long-term interests of our stockholders. Therefore, we believe it is important that we maintain the flexibility to award compensation that may not be tax deductible to promote our various corporate goals.

Compensation Committee Interlocks and Insider Participation

During the 2023 fiscal year, the members of the Compensation Committee were David A. Levin, Terri Funk Graham, Ashish Parmar, and Famous P. Rhodes. None of the members of our Compensation Committee will be or has ever been one of our officers or associates. None of our executive officers serves or has served as a member of the Board or Compensation Committee, or similar committee performing equivalent functions, of any other company whose executive officer(s) served as a member of our Board or our Compensation Committee.

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, for filing with the Securities and Exchange Commission.

COMPENSATION COMMITTEE

David A. Levin, Chairperson

Terri Funk Graham

Ashish Parmar

Famous P. Rhodes

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 president and chief executive officer, the chief financial officer, and the three other most highly compensated individuals who were serving as our executive officers at the end of the 2023 fiscal year, and one individual who served as Interim Chief Financial Officer for a portion of the 2023 fiscal year. We refer to these individuals throughout this Proxy Statement as our “Named Executive Officers.”