Exhibit 10.1

EMPLOYMENT AGREEMENT

Employment Agreement, dated as of November 5, 2011 between RoomStore, Inc.
(“Company”) and Stephen Giordano (“Executive”).

The Company agrees to employ the Executive, and the Executive agrees to accept
such employment, on the following terms and conditions:

1. Employment, Duties and Acceptance.

1.1 Employment; Duties. The Company employs the Executive for the Term (as
defined in Section 2.1), to render exclusive and full-time services to the
Company as its President and Chief Executive Officer and to perform such other
duties consistent with such position as may be assigned to the Executive by the
Board of Directors of the Company (the “Board”) or any officer of the Company
senior to the Executive. The Executive will be appointed immediately to the
Board of Directors, although he will not receive any additional compensation for
this responsibility.

1.2 Acceptance. The Executive accepts such employment and agrees to render the
services described above. During the Term, the Executive agrees to serve the
Company diligently, to devote his entire business time, energy and skill to such
employment, and to use the Executive’s best efforts, skill and ability to
promote the Company’s interests.

1.3 Employment Location. Executive understands and agrees that his primary
employment location is at either the Richmond, Virginia, or Rocky Mount, North
Carolina areas, and agrees to maintain an apartment or house in the Central
Virginia or North Carolina area and to spend the majority of his time working at
the Company’s corporate headquarters or at the Company’s other facilities.

2. Term of Employment.

2.1 The Term. The Executive’s employment will start on November 8, 2011 (the
“Effective Date”). Subject to the termination provisions in Section 4 of this
Agreement, this Agreement and the Executive’s employment will continue for three
years from the Effective Date (the “Initial Term”) and, thereafter automatically
continued for consecutive one-year periods (the “Extended Term”), unless
terminated earlier pursuant to section 4, or either party gives written notice
of non-renewal of this Agreement at least thirty days before the end of the
Initial Term or Extended Term. The Initial Term and the Extended Term are also
referred to in this Agreement as the “Term.”

3. Compensation; Benefits.

3.1 Salary. The Company will pay the Executive during the Term a base salary,
payable in accord with the Company’s regular payroll practices, at the initial
annual rate of $400,000, less legally required withholding and deductions (the
“Base Salary”). The Company will review the Executive’s Base Salary annually.

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3.2 Signing Bonus. Subject to and in consideration of the Executive’s starting
employment with the Company and complying with all his obligations under this
Agreement and as the Company’s President and Chief Executive Officer, the
Company will pay the Executive a signing bonus of $75,000, less legally required
withholding and deductions, $25,000 will be paid within five days after the
Effective Date and the remainder will be paid in five equal payments over the
next five months at the rate of $10,000 per month. In addition, the Company will
reimburse the Executive for up to $2,500 of documented legal fees that he incurs
in connection with his review and negotiation of this Agreement.

3.3 Incentive Bonus. The Executive will have an opportunity to earn an annual
Incentive Bonus in an amount up to 60% of the Executive’s Base Salary based on
the Company and the Executive each achieving certain annual performance targets
and objectives set by the Compensation Committee of the Board, with
recommendations from the Executive. The amount of the Executive’s Incentive
Bonus for fiscal year 2012 will be prorated for the number of days he is
employed by the Company during fiscal year 2012. The Compensation Committee of
the Board will set the Executive’s performance targets for fiscal year 2012,
after consulting with the Executive, within thirty days after the Effective
Date. Earned Incentive Bonuses will be paid within thirty days after the
Company’s receipt of its completed audit for the fiscal year in which the
Incentive Bonus would be earned.

3.4 Equity. Subject to court approval if required, the Company will provide the
Executive with stock options equal to 6% of the equity of the
post-reorganization company subject to a vesting schedule commensurate with the
desires of the Company and the length of an agreed upon contract.

3.5 Relocation Expenses. For a period of up to ninety days after the Effective
Date, the Company will reimburse the Executive for his reasonable documented
housing rental expenses in the Richmond or Raleigh Durham, Rocky Mount
metropolitan area, subject to the Company’s prior approval of the amount of such
housing expenses. In addition, the Company will reimburse the Executive for
documented moving expenses, approved by the Company in advance, of up to
$12,500, for moving Executive’s personal effects from Chicago to the Richmond or
Raleigh Durham/Rocky Mt. area.

3.6 Business Expenses. During the Term, the Executive will be entitled to
receive reimbursement of all reasonable out-of-pocket expenses properly incurred
by him in connection with his duties under this Agreement, subject to the
Company’s customary expense reimbursement practices.

3.7 Vacation. During each year of the Term, the Executive will be entitled to
four weeks of vacation, accrued and taken pursuant to the Company’s vacation
policies and practices as may be in effect from time to time.

3.8 Fringe Benefits. Immediately upon the Effective Date, the Executive will be
entitled to participate in all group benefit plans available to other Executive
Officers of the Company, subject to all the applicable terms and conditions of
each group benefit plan as may be in effect from time to time and to the extent
permitted under applicable law.

 

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3.9 Car Expenses. During each month of the Term, the Executive will be entitled
to receive reimbursement of up to $850 for the expense of leasing or buying a
car for business use. The Company also will provide the Executive with a credit
card for his use in purchasing gasoline in connection with driving the car for
business purposes.

4. Termination.

4.1 Termination at Will. Either the Executive or the Company can terminate this
Agreement and the Executive’s employment, for any or no reason, upon giving the
other party at least thirty days prior written notice.

4.2 Severance. If the Company provides notice of non-renewal of the Term of this
Agreement or terminates the Executive’s employment without “Cause” (as defined
below), or the Executive resigns his employment for Good Reason (as defined
below), the Executive shall be entitled to severance equal to payment of his
base salary for a six-month period after termination, with such payments made in
accord with the Company’s regular payroll practices, less legally required
withholding and deductions. Solely for purposes of this Section 4.2, “Cause”
shall mean that: (a) the Executive has engaged in misconduct in or neglect of
the responsibilities of his position; (b) the Executive has been convicted of,
plead guilty or no contest to a felony or a crime involving dishonesty or theft;
(c) the Executive has materially failed to comply with applicable laws with
respect to the Company’s operations; (d) the Company’s adjusted gross EBIDTA for
the period of March 1, 2012 to February 28, 2013 is below $2 million. For
purposes of this Section 4.2, a resignation for “Good Reason” shall mean, the
Executive’s resignation where, without the Executive’s prior written consent,
the Company (a) fails to pay the Executive as provided under this Agreement, or
(b) diminishes the Executive’s base salary. Any resignation for Good Reason
shall only be effective upon the failure of the Company to cure the action(s) or
omission(s) giving rise to the Good Reason resignation within thirty (30) days
after receiving the Executive’s written notice.

4.3 Change in Control. As an alternative to the severance provision in
Section 4.2 above, if the Executive’s employment were to be terminated due to a
“Change in Control” (as defined below) and the successor entity does not offer
the Executive employment similar to the position he had immediately before the
Change in Control, the Company shall provide the Executive with a lump sum
severance payment equal to his Base Salary for a total of twelve months. A
Change of Control shall include: (a) a sale of all or substantially all of the
assets of the Company; (b) a merger, consolidation or other transaction
involving the Company in which the Company is not the surviving or continuing
corporation or business entity; (c) a sale or transfer of a majority of the
voting stock or equity of the Company whereby the new majority owner(s) has/have
the voting power to change the members of the Board of Directors.

4.4 Separation Agreement. Any severance paid to the Executive pursuant to
Sections 4.2 or 4.3 of this Agreement shall be provided subject to the Executive
first signing, without subsequent revocation, a Separation Agreement and Release
in a form acceptable to the Company.

 

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4.5 Litigation Expenses. The prevailing party in any action, suit or proceeding
between the Company and the Executive with respect to this Agreement or the
Executive’s employment shall be entitled to an award of all expenses (including
reasonable attorneys’ fees) incurred by such party in connection with such
action, suit or proceeding, to the extent permitted by applicable law.

5. Intellectual Property. The Company shall be the sole owner of all the
products and proceeds of the Executive’s services hereunder, including, but not
limited to, all materials, ideas, concepts, formats, suggestions, developments,
arrangements, packages, programs and other intellectual properties pertaining to
a retail furniture business that the Executive may acquire, obtain, develop or
create during the Term (the “Results”), free and clear of any claims by the
Executive (or anyone claiming under the Executive). All the Results are works
made-for-hire for the Company within the meaning of the United States Copyright
Act. To any extent that any Results may not qualify as works made-for-hire, the
Executive shall, at the request of the Company, execute such assignments to the
Company of all the Executive’s right, title and interest in and to the Results
as the Company may from time to time deem appropriate.

6. Confidential Information. The Executive acknowledges that he will have access
or be privy to certain confidential business and proprietary information of the
Company and its Subsidiaries as a result of the Executive’s employment with the
Company or its subsidiaries. Confidential information may include, but is not
limited to, business decisions, plans, procedures, strategies and policies,
legal matters affecting the Company and its subsidiaries and their respective
businesses, personnel, customer records information, trade secrets, bid prices,
evaluations of bids, contractual terms and arrangements (prospective purchases
and sales), pricing strategies, financial and business forecasts and plans and
other information affecting the value or sales of products, goods, services or
securities of the Company or its subsidiaries, and personal information
regarding employees (collectively, the “Confidential Information”). The
Executive acknowledges and agrees the Confidential Information is and shall
remain the sole and exclusive property of the Company or its Subsidiary. The
Executive shall not disclose to any unauthorized person, or use for the
Executive’s own purposes, any Confidential Information without the prior written
consent of the Board, which consent may be withheld by the Board at its sole
discretion, unless and to the extent that the aforementioned matters become
generally known to and available for use by the public other than as a result of
the Executive’s acts or omissions. The Executive agrees to maintain the
confidentiality of the Confidential Information after the termination of the
Executive’s employment; provided, further, that if at any time the Executive or
any person or entity to which the Executive has disclosed any Confidential
Information becomes legally compelled (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand or similar process) to disclose
any of the Confidential Information, the Executive shall provide the Company
with prompt, prior written notice of such requirement so the Company, in its
sole discretion, may seek a protective order or other appropriate remedy and/or
waive compliance with the terms hereof. In the event that a protective order or
other remedy is not obtained or the Company waives compliance with the
provisions of this Agreement, the Executive shall ensure that only the portion
of the Confidential Information which the Executive or that person is advised by
written opinion of the Company’s counsel that the Executive is legally required
to disclose is disclosed, and the Executive further covenants and agrees to
exercise reasonable efforts to obtain assurance that the recipient of any
Confidential Information shall not further disclose that Confidential
Information to others, except

 

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as required by law, following such disclosure. In addition, the Executive
covenants and agrees to deliver to the Company upon termination of this
Agreement, and at any other time as the Company may request, any and all
property of the Company including, but not limited to, keys, computers, credit
cards, company car, memoranda, notes, plans, records, reports, computer tapes,
printouts and software, Confidential Information in any form whatsoever, and
other documents and data (and copies thereof) and relating to the Company or any
subsidiary which he may then possess or have under his control or to which the
Executive had access to or possession of in the course of such employment.

7. Covenant Not to Compete or Disparage. The Executive hereby agrees that for a
period of two (2) years following the expiration or termination of this
Agreement (the “Non-Compete Period”), the Executive shall not: (i) directly or
indirectly, either individually or for any other person or entity (whether as an
officer, director, employee, owner, stockholder, consultant, agent, advisor,
general partner, limited partner, member, manager, or otherwise), or as a part
of a group, own, operate, manage, control, participate in, consult with, render
services for, or in any manner engage in any business competing with any part of
the business presently engaged in by the Company within any geographical area in
which the Company engages or has proposed to engage in such business (or solicit
any person to engage in any of the foregoing activities); (ii) directly or
indirectly, individually or for any other person or entity induce or attempt to
induce any employee of the Company to leave the employ of the Company, hire any
person who is an employee of the Company as of, or immediately prior to, the
time of the hiring, or induce or attempt to induce any manufacturers’
representative, customer, supplier, licensee, agent or any other person or
entity having a business relationship with the Company to cease doing business
with or reduce the volume of its business with the Company; or (iii) initiate,
participate or engage in any communication whatsoever with any current or former
customer, supplier, vendor or competitor of the Company or its subsidiaries or
any of their respective shareholders, partners, members, directors, managers,
officers, employees or agents, or with any current or former shareholder,
partner, member, director, manager, officer, employee or agent of the Company or
its subsidiaries, or with any third party, which communication could reasonably
be interpreted as derogatory or disparaging to the Company or its subsidiaries,
including but not limited to the business, practices, policies, shareholders,
partners, members, directors, managers, officers, employees, agents, advisors
and attorneys of the Company or its Subsidiaries. Provided, however, nothing
herein shall prohibit the Executive from being a passive owner of or
controlling, directly or indirectly, of not more than five percent (5%) in the
aggregate of the outstanding stock of any class of a corporation which is
publicly traded and which competes in the business of the Company so long as the
Executive has no direct or indirect participation in the management of such
corporation. The Executive acknowledges that the foregoing restriction is
reasonable in all respects and that there is no less restrictive provision in
terms of duration, prohibited activities or geographic area which would
adequately protect the Company’s assets and other legitimate business interests.
For the purposes of the foregoing, a business shall be deemed to be competing
with the business of the Company if that business (a) operates retail furniture
stores that sell living room, dining room, bedroom, or entertainment room
furniture, and (b) more than ten percent (10%) of those stores are located
within the same markets as those stores operated by the Company. Notwithstanding
the foregoing, in the event any part of this covenant set forth in this
provision shall be held invalid, illegal or unenforceable by a court of
competent jurisdiction, the Executive and the Company hereby agree that such
invalid, illegal or unenforceable provision or section hereof shall be severed
from this Agreement without affecting

 

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the remaining portions hereof in any manner. In the event any portion of this
provision related to the time or geographical area restrictions of this
Agreement shall be declared by a court of competent jurisdiction to exceed the
maximum time or geographical area restrictions the court deems reasonable or
enforceable, said time or geographic area restriction shall be deemed to become
and thereafter shall be the time or geographic area which the court shall deem
reasonable and enforceable.

8. Notices.

All notices and other communications required to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered
personally, one day after deposit if sent by a nationally recognized overnight
courier, or if mailed first class, postage prepaid, by certified mail three days
after the date mailed, as follows (or to such other address as either party
shall designate by notice in writing to the other):

If to the Company:

RoomStore, Inc.

Board of Directors

c/o Legal Department

12501 Patterson Avenue

Richmond, VA 23238

If to the Executive:

Stephen Giordano

5118 Tari Stream Way

Brandon, FL 33511

9. Limitation on Claims. The Executive agrees that he will not commence any
action or suit relating to any matter arising out of his employment with the
Company (irrespective of whether such action or suit pertains to the provisions
of this Agreement) later than ten months after the first to occur of: (a) the
date such claim initially arises, or (b) the date the Executive’s employment
terminates for any reason whatsoever. The Executive expressly waives any
applicable statute of limitations to the contrary.

10. General.

10.1 This Agreement shall be governed by and construed in accord with the laws
of the State of Virginia Any court proceedings concerning this Agreement or the
Executive’s employment with the Company shall be exclusively in the state or
federal courts located in the Richmond, Virginia area.

10.2 The section headings herein are for reference purposes only and shall not
in any way affect the meaning or interpretation of this Agreement.

 

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10.3 This Agreement sets forth the entire understanding of the parties relating
to the subject matter of the Executive’s employment with the Company, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.

10.4 This Agreement, and the Executive’s rights and obligations hereunder, may
not be assigned by the Executive. The Company may assign its rights, together
with its obligations, hereunder (i) to any affiliate with assets sufficient to
fully perform all the Company’s obligations or (ii) to third parties in
connection with any sale, transfer or other disposition of all or substantially
all of its business or assets; in any event the obligations of the Company
hereunder shall be binding on its successors or assigns, whether by merger,
consolidation or acquisition of all or substantially all of its business or
assets.

10.5 This Agreement may be amended, modified, superseded or canceled, and the
terms hereof may be waived, only by a written instrument executed by both
parties hereto, or in the case of a waiver, by the party waiving compliance. The
failure of either party at any time to require performance of any provision
hereof shall in no manner affect the right at a later time to enforce the same.
No waiver by either party of the breach of any provision in this Agreement,
whether by conduct or otherwise, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other provision in this Agreement.

 

Room Store, Inc. By:  

/s/ Steven L. Gidumal

  Chairman, Board of Directors By:  

/s/ Stephen A. Giordano

  Stephen Giordano

 

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