8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 28, 2008

Lumber Liquidators, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-33767	043229199
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

3000 John Deere Road Toano, Virginia	23168
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (757) 259-4280

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Amendment and Restatement of Annual Bonus Plan for Executive Management

On March 28, 2008, the Board of Directors of Lumber Liquidators, Inc. (the “Company”) amended and restated the Company’s Annual Bonus Plan for Executive Management (the “Bonus Plan”). The revisions to the Bonus Plan vested authority to administer the Bonus Plan in the Company’s Compensation Committee rather than the Board of Directors, expanded the array of performance measures and criteria available under the Bonus Plan, and relaxed eligibility requirements to allow otherwise eligible participants to be added to the Bonus Plan during the course of a performance period.

The full text of the amended and restated Bonus Plan is attached as Exhibit 10.1 and is incorporated by reference into this Item 5.02.

2008 Annual Bonus Plan

On March 28, 2008, the Compensation Committee established the performance criteria and target bonus goals and weighting with respect to the cash bonus awards available under the Bonus Plan for the 2008 fiscal year (the “2008 Bonus Plan”). The criteria that will be used to determine the amounts paid under the 2008 Bonus Plan to executive officers are (1) the Company’s earnings per share for 2008 and (2) individual operational goals established and/or approved by the Compensation Committee or management. The criteria will be weighted so that 75% of the bonus amount is attributable to the Company’s earnings per share performance and 25% is attributable to individual performance.

The Compensation Committee established the following target bonus amounts under the 2008 Bonus Plan, expressed as a percentage of each named executive officer’s base salary: Thomas D. Sullivan, Chairman and Founder – 100%; Jeffrey W. Griffiths, President and Chief Executive Officer – 100%; Daniel E. Terrell, Chief Financial Officer – 50%; Robert M. Morrison, Senior Vice President, Store Operations – 75%; Marco Q. Pescara, Senior Vice President, Direct Marketing and Advertising – 50%; H. Franklin Marcus, Jr., Vice President, Finance and Treasurer – 50%; and Tyler Greenan, Vice President, Store Operations – 50%. The payout under the 2008 Bonus Plan will be equal to the target bonus amounts as adjusted for the specific target performance goals achieved. For the 75% of the bonus amount attributable to the Company’s earnings per share performance, payouts will range from 50% to 120% of the target bonus amount. The minimum achievement required to qualify for any bonus payment attributable to Company performance is 90% of the specified target earnings per share goal under the 2008 Bonus Plan. The maximum payout of a bonus attributable to Company performance is 120% of the applicable target bonus amount, which requires achievement of at least 120% of the specified earnings per share goal under the 2008 Bonus Plan. For the 25% of the bonus amount attributable to individual performance, payouts will be determined in relation to the individual’s achievement of the operational goals set for the individual by the Compensation Committee or management.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is being furnished pursuant to Item 5.02 above.

Exhibit No.	Description
10.01	Amended and Restated Annual Bonus Plan for Executive Management, dated March 28, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	LUMBER LIQUIDATORS, INC.
	(Registrant)
Date: April 3, 2008	By:	/s/ E. Livingston B. Haskell
		E. Livingston B. Haskell
		Secretary and General Corporate Counsel

EXHIBIT INDEX

Exhibit No.	Description
10.01	Amended and Restated Annual Bonus Plan for Executive Management, dated March 28, 2008.

EX-10.01

Exhibit 10.01

LUMBER LIQUIDATORS, INC.

Annual Bonus Plan for Executive Management

1. PURPOSE OF THE PLAN

The purposes of the Plan are to promote the success of the Company; to provide members of the executive management group of the Company with an opportunity to receive incentive compensation dependent upon that success and to attract, retain and motivate such individuals. The Plan is intended to be a straightforward and flexible program that provides non-equity incentive compensation based upon the executive’s individual performance and the Company’s financial performance.

2. DEFINITIONS

Award means an incentive award made pursuant to the Plan.

Award Formula means one or more objective formulas or standards established by the Committee for purposes of determining an Award based on the level of performance with respect to one or more Performance Goals. Award Formulas may vary from Performance Period to Performance Period and from Participant to Participant.

Award Schedule means the Award Schedule established pursuant to Section 4.1.

Board means the Board of Directors of the Company.

Committee means the Compensation Committee of the Board.

Company means Lumber Liquidators, Inc. and its successors.

Participant means a member of the executive management group selected from time to time by the Committee to participate in the Plan.

Performance Goal means the level of performance or matrix of levels of performance established by the Committee as the Performance Goal with respect to a Performance Measure. A Performance Goal may be an absolute goal or a goal relative to the performance of a peer group selected by the Committee. Performance Goals may vary from Performance Period to Performance Period and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.

Performance Measure means one or more of the following selected by the Committee to measure Company performance for a Performance Period: (a) cash flow and/or free cash flow (before or after dividends), (b) earnings per share as defined by the Company, (c) EBITDA (as defined by the Company), (d) the price of Common Stock, (e) return on equity, (f) total

LUMBER LIQUIDATORS, INC.

Annual Bonus Plan for Executive Management

shareholder return, (g) return on capital (including return on total capital or return on invested capital), (h) return on assets or net assets, (i) market capitalization, (j) total enterprise value (market capitalization plus debt), (k) economic value added (or equivalent metric), (l) debt leverage (debt to capital), (m) revenue, (n) income (including net income, operating income, pre or after-tax income or income from continuing operations), (o) operating profit or net operating profit, (p) operating margin or profit margin, (q) return on operating revenue, (r) cash from operations, (s) operating ratio, (t) cash flow per share, (u) market share (v) sales growth (on a gross or net basis), (w) expense levels, (x) store openings, (y) comparable store sales growth, and (z) performance of non-comparable stores. Performance Measures shall be determined in accordance with generally accepted accounting principles, where applicable, as consistently applied by the Company. Performance Measures may be established on a Company-wide basis, with respect to one or more business units, divisions or subsidiaries; and in either absolute terms or relative to the performance of one or more comparable companies or an index covering multiple companies. Performance Measures may vary from Performance Period to Performance Period and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.

Performance Period means the calendar year.

Plan means the Lumber Liquidators, Inc. Annual Bonus Plan for Executive Management.

3. ELIGIBILITY

Participants shall be selected by the Committee from among the executive management group of the Company. The selection of an executive as a Participant for a Performance Period shall not entitle such individual to be selected as a Participant with respect to any other Performance Period. Participants may be added during the course of a Performance Period, in which case any Award to such Participant will be prorated based upon the portion of the Performance Period during which the Participant was included in the Plan.

4. AWARDS

4.1 Award Schedules. Each Performance Period, the Committee shall establish in writing an Award Schedule for each Participant. Award Schedules may vary from Performance Period to Performance Period and from Participant to Participant.

4.2 Determination of Awards. A Participant shall be eligible to receive payment in respect of an Award to the extent that the Performance Goal(s) for such Award are achieved in accordance with the Award Formula for the Performance Period. In addition, an Award to a Participant may also be based in part on satisfaction of objective or subjective individual performance criteria established for the Participant. The Committee shall determine the actual amount of the Award to be paid to each Participant based upon information provided to the Committee by Management.

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LUMBER LIQUIDATORS, INC.

Annual Bonus Plan for Executive Management

4.3 Payment of Awards. Awards will be paid in cash. Payments shall be made as soon as practicable after the end of the Performance Period, but in no event later than May 15 following the end of the Performance Period.

4.4 Termination of Employment. Except as otherwise determined by the Committee, no Award with respect to a Performance Period will be payable to any Participant who is not an employee of the Company on the date of payment.

5. ADMINISTRATION

The Committee shall have full and complete authority, in its sole and absolute discretion, (i) to exercise all of the powers granted to it under the Plan, (ii) to construe, interpret and implement the Plan and any related document, (iii) to prescribe, amend and rescind rules relating to the Plan, (iv) to make all determinations necessary or advisable in administering the Plan, and (v) to correct any defect, supply any omission and reconcile any inconsistency in the Plan.

6. MISCELLANEOUS

6.1 Withholding Taxes. Whenever payments under the Plan are to be made or deferred, the Company will withhold therefrom, or from any other amounts payable to or in respect of the Participant, an amount sufficient to satisfy any applicable governmental withholding tax requirements related thereto.

6.2 Amendment or Termination of the Plan. The Committee may, at any time, amend or discontinue the Plan in any respect.

6.3 Unfunded Plan. Nothing in this Plan will require the Company to purchase assets or place assets in a trust or other entity to which contributions are made or otherwise to segregate any assets for the purpose of satisfying any obligations under the Plan. Participants will have no rights under the Plan other than as unsecured general creditors of the Company.

6.4 No Right of Employment. Nothing in this Plan will be construed as creating any contract of employment or conferring upon any Participant any right to continue in the employ or other service of the Company or limit in any way the right of the Company to change such person’s compensation or other benefits or to terminate the employment or other service of such person with or without cause and with or without notice.

6.5 Applicable Law. The Plan and all Awards and actions taken thereunder shall be governed by the laws of the Commonwealth of Virginia, applied without regard to conflict-of-law principles.

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