Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (this “Agreement”)
is entered into as of November 28, 2012, by and between Bluefly, Inc., a Delaware corporation (the “Company”), and
James Gallagher (“Gallagher”).

 

RECITALS

 

WHEREAS, the Company wishes to hire Gallagher
to serve as its Chief Financial Officer, and Gallagher wishes to serve in such capacity, on the terms and conditions set forth
herein.

 

NOW, THEREFORE, in consideration of the
mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Gallagher agree as follows:

 

1.       TERM

 

The Company hereby agrees to employ Gallagher
as Chief Financial Officer of the Company, and Gallagher hereby agrees to serve in such capacity, for a term commencing on November
28, 2012 or such other date as may mutually be agreed by the parties (the “Starting Date”) and ending on December 31,
2015 (as the same may be earlier terminated pursuant to the terms of this Agreement, the “Employment Term”), upon the
terms and subject to the conditions contained in this Agreement. Notwithstanding the foregoing, in the event that a Change of Control
(as hereinafter defined) occurs during the last six months of the Employment Term, the Employment Term shall automatically be extended
until the six month anniversary of the date of such Change of Control, provided that nothing contained herein shall preclude either
party from terminating this Agreement pursuant to Section 7 during such extension.

 

2.       DUTIES

 

During the Employment Term, Gallagher shall
serve as Chief Financial Officer of the Company, and shall be responsible for the duties attendant to such office and such other
managerial duties and responsibilities with the Company consistent with such office as may be reasonably assigned to him from time
to time.

 

The principal location of Gallagher’s
employment shall be in the New York City vicinity (i.e., within a 20 mile radius), although Gallagher understands and agrees that
he will be required to travel from time to time for business reasons. Gallagher shall diligently and faithfully perform his obligations
under the Agreement and shall devote his full professional and business time to the performance of his duties as Chief Financial
Officer of the Company during the Employment

 

    	 

    	 

    
 

 

Term. Gallagher shall not, directly or indirectly, render business
services to any other person or entity, without the consent of the Company's Chief Executive Officer.

 

Gallagher will be entitled to four (4) weeks’
vacation per year in accordance with the Company’s standard paid time-off policies and procedures.

 

3.            BASE
SALARY

 

For services rendered by Gallagher to the
Company during the Employment Term, the Company shall pay him a base salary of $275,000 per year, payable in accordance with the
standard payroll practices of the Company, subject to annual increases in the sole discretion of the Chief Executive Officer and
the Company's Board of Directors, taking into account the financial and operating performance of the Company's business and divisions
and a qualitative assessment of Gallagher’s performance during such year.

 

4.             BONUS;
OPTIONS

 

a.
    During the Employment Term, Gallagher shall be eligible to receive (i) a performance bonus of up to
thirty percent (30%) of his then current annual salary as set by the Company’s Board of Directors in its sole
discretion and based on the achievement of one or more targets set for the fiscal year by the Compensation Committee of the
Board of Directors, and subject to pro rata adjustment for underachievement or overachievement of targets within limits
determined by the Committee in its sole discretion; and (ii) such additional performance bonus for each fiscal year as may be
determined by the Compensation Committee in its sole discretion. Any bonus payable under this section shall be paid no later
than March 15th of the fiscal year following the fiscal year to which such bonus relates. Notwithstanding the foregoing,
Gallagher' s bonus for the 2012 fiscal year will be pro-rated based upon the number of days during the year in which he was
employed by the Company. All bonuses shall be paid in accordance with the Company’s standard payroll practices, net of
any applicable withholding.

 

b.    As of the last day of the calendar month
in which the Starting Date occurs, the Company will issue to Gallagher options (“Options”) to purchase 400,000 shares
of the Company's common stock, $.01 par value (“Common Stock”) pursuant to, and in accordance with, the Company's 2005
Stock Incentive Plan (the “Plan”). The Options will be Incentive Stock Options (as defined in the Plan) to the extent
allowed by law, and will be exercisable at a price equal to the Fair Market Value (as defined in the Plan) of the Common Stock
on the date of issuance. The Options will vest over a forty-eight (48) month period as follows: (i) 12.5% of the Options shall
vest on the six month anniversary of the date of grant, and (ii) 2.0833% of the Options shall vest each month thereafter until
all such Options shall have vested. The Term of the Options will be 10 years from the date of grant, and will otherwise be granted
in accordance with the terms of the Plan and the Company’s standard stock option agreement.

 

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c.     In the event that a Change of Control
(as defined below) occurs during the Employment Term, one half of any unvested stock options granted to Gallagher which are outstanding
as of the date of that Change of Control and have not yet vested (“Unvested Options”) shall be deemed to be fully vested
as of that date. Subject to paragraph 7(c), the remaining one half of the Unvested Options shall vest on the earliest to occur
of (x) the scheduled vesting date and (y) twelve (12) months from the date of such Change of Control, subject, in each case, to
Gallagher’s continued employment with the Company on such dates.

 

d.     For purposes of this Agreement, “Change
of Control” shall be deemed to occur upon:

 

(i)         the
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) (a “Person”) of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more (on a fully diluted basis) of
either (A) the then outstanding shares of common stock of the Company, taking into account as outstanding for this purpose such
common stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise
of any similar right to acquire such common stock (the “Outstanding Company Common Stock”) or (B) the combined
voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”); provided, however, that for purposes of this Agreement, the
following acquisitions shall not constitute a Change of Control: (I) any acquisition by the Company or any “Affiliate”
(as defined below), (II) any acquisition by any employee benefit plan sponsored or maintained by the Company or any Affiliate,
(III) any acquisition by Quantum Industrial Partners LDC, Soros Fund Management LLC, and/or SFM Domestic Investments LLC and/or
any of their affiliates (collectively, “Soros”), (IV) any acquisition by Rho Ventures VI, L.P. and/or any of
its affiliates (collectively, “Rho”) or (V) any acquisition which complies with clauses (A), (B) and (C) of
sub-paragraph (d)(v) hereof ;

 

(ii)        Individuals
who, on the date hereof, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least
a majority of the Board, provided that any person becoming a director subsequent to the date hereof, whose election or nomination
for election was approved by a vote of at least two-thirds of the Incumbent Directors then on the Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written
objection to such nomination) shall be an Incumbent Director; provided, however, that no individual initially elected or nominated
as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result
of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall
be deemed to be an Incumbent Director;

 

(iii)        the
dissolution or liquidation of the Company;

 

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(iv)        the
sale of all or substantially all of the business or assets of the Company; or

 

(v)         the
consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company
that requires the approval of the Company’s stockholders, whether for such transaction or the issuance of securities in
the transaction (a “Business Combination”), unless immediately following such Business Combination: (A) more
than fifty percent (50%) of the total voting power of (x) the corporation resulting from such Business Combination (the “Surviving
Corporation”), or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership
of sufficient voting securities eligible to elect a majority of the directors of the Surviving Corporation (the “Parent
Corporation”), is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to
such Business Combination (or, if applicable, is represented by shares into which the Outstanding Company Voting Securities were
converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same
proportion as the voting power of the Company’s Voting Securities among the holders thereof immediately prior to the Business
Combination, (B) no Person (other than Soros, Rho or any employee benefit plan sponsored or maintained by the Surviving Corporation
or the Parent Corporation), is or becomes the beneficial owner, directly or indirectly, of thirty percent (30%) or more of the
total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is
no Parent Corporation, the Surviving Corporation) and (C) at least a majority of the members of the board of directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business
Combination were Board members at the time of the Board’s approval of the execution of the initial agreement providing for
such Business Combination.

 

For purposes of this Agreement, the term “Affiliate”
shall mean any entity that directly or indirectly is controlled by, controls or is under common control with the Company.

 

5.             EXPENSE
REIMBURSEMENT AND PERQUISITES

 

a.        During
the Term of this Agreement, Gallagher shall be entitled to reimbursement of all reasonable and actual out-of-pocket expenses incurred
by him in the performance of his services to the Company consistent with corporate policies, provided that the expenses are properly
accounted for. Any such reimbursement will be made to Gallagher as soon as administratively feasible following submission of such
documentation of such expense, but shall be made no later than the calendar year following the calendar year in which such expense
is incurred by Gallagher. In the event that any such reimbursement is taxable to Gallagher, such reimbursement shall be made as
soon practical upon Gallagher’s submission of a request to be reimbursed, but in all events such reimbursement will be made
prior to the end of the calendar year next following the calendar year in which the applicable expense was incurred.

 

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b.        During
the Employment Term, Gallagher shall be entitled to participate in all health insurance, dental insurance, long-term disability
insurance, life insurance , vacation, sick leave, and other employee benefit plans instituted by the Company from time to time
on the same terms and conditions as other similarly situated employees of the Company, to the extent permitted by law.

 

6.           NON-COMPETITION;
NON-SOLICITATION

 

a.        In
consideration of the offer of employment, severance benefits and Options to be granted to Gallagher hereunder, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, during the Non-Competition Term, Gallagher
shall not, without the prior written consent of the Company, anywhere in the world, directly or indirectly, (i) enter into the
employ of or render any services to any Competitive Business; (ii) engage in any Competitive Business for his own account; (iii)
become associated with or interested in any Competitive Business as an individual, partner, shareholder, creditor, director, officer,
principal, agent, employee, trustee, consultant, advisor or in any other relationship or capacity; (iv) employ or retain, or have
or cause any other person or entity to employ or retain, any person who was employed or retained by the Company while Gallagher
was employed by the Company; or (v) solicit, interfere with, or endeavor to entice away from the Company, for the benefit of a
Competitive Business, any of its customers or other persons with whom the Company has a contractual relationship. For purposes
of this Agreement, a “Competitive Business” shall mean any person, corporation, partnership, firm or other entity which
sells or has plans to sell ten (10) or more brands of luxury or high-end designer apparel and/or fashion accessories at prices
that are consistently discounted to manufacturer’s suggested retail prices. However, nothing in this Agreement shall preclude
Gallagher from investing his personal assets in the securities of any corporation or other business entity which is engaged in
a Competitive Business if such securities are traded on a national stock exchange or in the over-the-counter market and if such
investment does not result in him beneficially owning, at any time, more than three percent (3%) of the publicly-traded equity
securities of such Competitive Business. For purposes of this agreement, the “Non-Competition Term” shall mean a period
beginning upon the commencement of the Employment Term and ending on the one (1) year anniversary of the end of the Employment
Term.

 

b.        Gallagher
and the Company agree that the covenants of non-competition and non-solicitation contained in this paragraph 6 are reasonable covenants
under the circumstances, and further agree that if, in the opinion of any court of competent jurisdiction, such covenants are not
reasonable in any respect, such court shall have the right, power and authority to excise or modify such provision or provisions
of these covenants as to the court shall appear not reasonable and to enforce the remainder of these covenants as so amended. Gallagher
agrees that any breach of the covenants contained in this paragraph 6 would irreparably injure the Company. Accordingly, Gallagher
agrees that the Company, in addition to pursuing any other remedies it may have in law or in equity, may obtain an injunction against
Gallagher from any court having jurisdiction over the matter, restraining any further violation of this paragraph

 

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6.

 

 

7.             TERMINATION

 

a.          This
Agreement, the employment of Gallagher, and Gallagher’s position as Chief Financial Officer of the Company shall terminate
upon the first to occur of:

 

(i)          his
death;

 

(ii)          his
"permanent disability," due to injury or sickness for a continuous period of four (4) months, or a total of eight months
in a twenty-four month period (vacation time excluded), during which time Gallagher is unable perform his ordinary and regular
duties;

 

(iii)         a
"Constructive Termination" by the Company during the Employment Term, which, for purposes of this Agreement, shall be
deemed to have occurred upon (A) the removal of Gallagher without his consent from his position as Chief Financial Officer of the
Company, or (B) the material breach by the Company of this Agreement; provided that no such breach shall be considered a
Constructive Termination unless (1) Gallagher gives the Company written notice within ninety (90) days after an event or occurrence
that he believes constitutes a Constructive Termination, specifying the event or occurrence that he believes constitutes a Constructive
Termination, and (2) the Company has failed to cure such breach within such ninety (90) day period;

 

(iv)         the
termination of this Agreement at any time without cause by the Company, which shall occur on not less than thirty (30) days prior
written notice from the Company (“Termination Date”);

 

(v)          the
termination of this Agreement for cause, which, for purposes of this Agreement, shall mean that (1) Gallagher has been convicted
of a felony or any serious crime involving moral turpitude, or engaged in materially fraudulent or materially dishonest actions
in connection with the performance of his duties hereunder, or (2) Gallagher has willfully and materially failed to perform his
duties hereunder, provided that the Company shall provide Gallagher with at least ten (10) business days’ prior written notice
of any such failure to perform and an opportunity to cure such failure, to the extent curable, or (3) Gallagher has willfully or
negligently breached the terms and provisions of this Agreement in any material respect, provided that the Company shall provide
Gallagher with at least ten (10) business days’ prior written notice of any such breach and an opportunity to cure such breach,
to the extent curable, or (4) Gallagher

 

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has failed to comply in any material respect with
the Company's policies of conduct that have been communicated to her, including with respect to trading in securities, provided
that the Company shall provide Gallagher with at least ten (10) business days’ prior written notice of any such failure to
comply and an opportunity to cure such failure, to the extent curable; or

 

(vi)        the
termination of this Agreement by Gallagher, which shall occur on not less than thirty (30) days prior written notice from Gallagher.

 

b.          In
the event that this Agreement is terminated during the Employment Term pursuant to paragraphs 7(a)(i), 7(a)(ii), 7(a)(v) or 7(a)(vi),
the Company shall pay Gallagher his base salary only through the date of termination. In the event that this Agreement is terminated
during the Employment Term pursuant to paragraphs 7(a)(iii) or 7(a)(iv), the Company shall pay Gallagher, in lieu of all salary,
compensation payments and perquisites set forth in paragraphs 3, 4 and 5 (including bonus payments, related benefits and unvested
option grants, but excluding vested option grants) and contingent upon his continued performance of his obligations under Section
6, severance payments (the "Severance Payments") from the Termination Date equal to the then-current base salary for
a period of four (4) months. The Severance Payments shall be payable in periodic installments in accordance with the Company's
standard payroll practices and will be subject to any applicable withholding, and shall be conditioned upon Gallagher executing
a full release of any claims against the Company, in a form reasonably satisfactory to the Company, which becomes effective within
60 days of such termination. The Severance Payments will commence when such release becomes effective; notwithstanding the foregoing,
if such 60 day period begins in one calendar year and ends in a subsequent calendar year, the Severance Payments will not commence
until the second calendar year.

 

c.        Notwithstanding
anything herein to the contrary, if any payments due under this Agreement (including, but not limited to any payments related to
the Options) would subject Gallagher to any tax imposed under Section 409A of the Code if such payments were made at the time otherwise
provided herein, then the payments that cause such taxation shall be payable in a single lump sum on the first day which is at
least six (6) months after the date of Gallagher’s "separation from service" as set forth in Code Section 409A(2)(A)(i)
and the official guidance issued thereunder.

 

8.           CONFIDENTIALITY

 

a.        Gallagher
recognizes that the services to be performed by him are special, unique and extraordinary in that, by reason of his employment
under this Agreement, he may acquire or has acquired confidential information and trade secrets concerning the operation of the
Company, its predecessors, and/or its affiliates, the use or disclosure of which could cause the Company, or its affiliates substantial
loss and damages which could not be readily calculated and for which no remedy at law would be adequate. Accordingly, Gallagher
covenants and agrees

 

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with the Company that he will not at any time during the Term
of this Agreement or thereafter, except in the performance of his obligations to the Company or with the prior written consent
of the Board of Directors or as otherwise required by court order, subpoena or other government process, directly or indirectly,
disclose any secret or confidential information that he may learn or has learned by reason of his association with the Company.
If Gallagher shall be required to make such disclosure pursuant to court order, subpoena or other government process, he shall
notify the Company of the same, by personal delivery or electronic means, confirmed by mail, within twenty-four (24) hours of learning
of such court order, subpoena or other government process and, at the Company's expense (such expenses to be advanced by the Company
as reasonably required by Gallagher), shall (i) take all necessary and lawful steps reasonably required by the Company to defend
against the enforcement of such subpoena, court order or government process, and (ii) permit the Company to intervene and participate
with counsel of its choice in any proceeding relating to the enforcement thereof. The term "confidential information"
includes, without limitation, information not in the public domain and not previously disclosed to the public or to the trade by
the Company's management with respect to the Company's or its affiliates' facilities and methods, trade secrets and other intellectual
property, designs, manuals, confidential reports, supplier names and pricing, customer names and prices paid, financial information
or business plans.

 

Notwithstanding the preceding paragraph,
“confidential information” shall not include any information which

 

(i)    was publicly known and made
generally available in the public domain prior to the time of disclosure by the Company to Gallagher;

 

(ii)   becomes
publicly known and made generally available after disclosure by the Company to Gallagher through no action of Gallagher; or

 

(iii)  was known
to Gallagher prior to its disclosure by the Company or is obtained by Gallagher from a third party without a breach of such third
party’s obligations of confidentiality.

 

b.        Gallagher
confirms that all confidential information is and shall remain the exclusive property of the Company. All memoranda, notes, reports,
software, sketches, photographs, drawings, plans, business records, papers or other documents or computer-stored or disk-stored
information kept or made by Gallagher relating to the business of the Company shall be and will remain the sole and exclusive property
of the Company and all such materials containing confidential information shall be promptly delivered and returned to the Company
immediately upon the termination of his employment with the Company.

 

c.     Gallagher shall make full and prompt
disclosure to the Company of all inventions, improvements, ideas, concepts, discoveries, methods, developments, software and works
of authorship, whether or not copyrightable, trademarkable or licensable, which are

 

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created, made, conceived or reduced to practice by Gallagher
while performing his services hereunder to the Company, whether or not during normal working hours or on the premises of the Company
and which relate in any manner to the business of the Company (all of which are collectively referred to in this Agreement as "Developments").
All Developments shall be the sole property of the Company, and Gallagher hereby assigns to the Company, without further compensation,
all of his rights, title and interests in and to the Developments and any and all related patents, patent applications, copyrights,
copyright applications, trademarks and trade names in the United States and elsewhere.

 

d.        At
the Company’s expense, Gallagher shall assist the Company in obtaining, maintaining and enforcing patent, copyright and other
forms of legal protection for intellectual property in any country. Upon the request of the Company and at its expense, Gallagher
shall sign all applications, assignments, instruments and papers and perform all acts necessary or desired by the Company in order
to protect its rights and interests in any Developments.

 

e.        Gallagher
agrees that any breach of this paragraph 8 will cause irreparable damage to the Company and that, in the event of such breach,
the Company will have, in addition to any and all remedies of law, including rights which the Company may have to damages, the
right to equitable relief including, as appropriate, all injunctive relief or specific performance or other equitable relief. Gallagher
understands and agrees that the rights and obligations set forth in paragraph 8 shall survive the termination or expiration of
this Agreement.

 

9.            REPRESENTATIONS
AND WARRANTIES

 

a.        Gallagher
represents and warrants to the Company that he was advised to consult with an attorney of Gallagher's own choosing concerning this
Agreement.

 

b.        Each
party represents and warrants to the other that, the execution, delivery and performance of this Agreement by such party complies
with all laws applicable to it or to which such party’s properties are subject and does not violate, breach or conflict with
any agreement by which such party or its assets are bound or affected, including (without limitation) any non-competition or similar
agreement to which such party is bound. Each party hereby agrees to indemnify and hold the other harmless from any loss, claim
or damages (including, without limitation, attorneys’ fees) incurred as a result of any actual or alleged breach of any of
the foregoing representations and warranties.

 

10.          GOVERNING
LAW

 

This Agreement shall be deemed a contract
made under, and for all purposes shall be construed in accordance with, the internal laws of the State of New York, without giving
effect to its conflict of law provisions. Any dispute arising hereunder shall be subject to the exclusive jurisdiction of the federal
and State courts located in New York, New York, and each of the

 

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parties hereto hereby irrevocably submits to such jurisdiction
and waives any objection to such venue.

 

11.         ENTIRE
AGREEMENT

 

This Agreement contains all of the understandings
between Gallagher and the Company pertaining to Gallagher’s employment with the Company, and it supersedes all undertakings
and agreements, whether oral or in writing, previously entered into between them.

 

11.         AMENDMENT
OR MODIFICATION; WAIVER

 

No provision of this Agreement may be amended
or modified unless such amendment or modification is agreed to in writing, signed by Gallagher and by an officer of the Company
duly authorized to do so. Except as otherwise specifically provided in this Agreement, no waiver by either party of any breach
by the other party of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver
of a similar or dissimilar provision or condition at the same or any prior or subsequent time.

 

12.         NOTICES

 

Any notice to be given hereunder shall be
in writing and delivered personally or sent by overnight delivery or certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or to such other address as such party may subsequently designate
by like notice:

 

If to the Company, to:

 

Bluefly, Inc.

42 West 39th Street

New York, NY 10018

Attn: Chief Executive Officer

 

If to Gallagher, to:

 

at the address then on file in the Company’s
payroll system

 

Any such notice shall be deemed given upon receipt.

 

13.         SEVERABILITY

 

In the event that any provision or portion
of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions or portions of this

 

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Agreement shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by law.

 

14.         TITLES

 

Titles of the paragraphs of this Agreement
are intended solely for convenience of reference and no provision of this Agreement is to be construed by reference to the title
of any paragraphs.

 

15.         COUNTERPARTS

 

This Agreement may be executed in counterparts,
each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

 

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IN WITNESS WHEREOF, the parties hereto have
executed this Agreement on the date first above written.

 

	 	BLUEFLY, INC.
	 	 	 
	 	By: 	/ s / Joseph Park
	 	 	Joseph Park
	 	 	Chief Executive Officer

 

	 	EMPLOYEE
	 	 
	 	/ s / James Gallagher
	 	James GallagherEXHIBIT 10.2

 

Beacon Roofing Supply, Inc.

 

July 17, 2012

 

Mr. David R. Grace

 

34 Holly Street

 

Gloucester, MA 01930

 

Re:Severance Agreement and General
Release

 

Dear Dave:

 

This letter when signed by you, will constitute
the full agreement between you and Beacon Roofing Supply, Inc. and Beacon Sales Acquisition, Inc. (together, “the Company”)
on the terms of your continued employment with, and eventual retirement because of disability from, the Company (the “Agreement”).

 

		1.	Your employment with the Company will continue until the close of business on December 31, 2012
(the “Separation Date”). Through your Separation Date, you will continue to devote your best efforts to faithfully
discharge your duties to the Company as its Chief Financial Officer, and you will take reasonable and appropriate actions to cooperatively
and smoothly transition the duties of Chief Financial Officer to your successor.

 

		(a)	Through September 30, 2012, you will continue to be provided with your current base salary and
management cash bonus opportunity pursuant to your compensation letter signed by Paul Isabella on March 21, 2012, and you will
continue to participate in the Company’s employee benefits plans in accordance with their terms. Notwithstanding anything
to the contrary in the management cash bonus plan, if you die before the bonus payment is paid, the payment will be made to your
spouse or, if she is not alive at such time, to your estate.

 

		(b)	From October 1, 2012 through the Separation Date, you will be paid a base salary equal to 70% of
your current base salary, and you will continue to participate in the Company’s employee benefit plans (including the short-term
and long-term disability plans) in accordance with their terms; provided, however, that you will not be entitled to participate
in the management cash bonus plan for the fiscal year beginning October 1, 2012, and you will not be entitled to any future equity
grants under the Company’s Stock Plan. If you die at any time prior to the Separation Date, the Company will continue to
pay your salary to your spouse or, if she is not alive at such time, to your estate.

 

		2.	Your employment with the Company will terminate on the Separation Date. Your final paycheck will
include any unpaid base salary earned through the Separation Date, any accrued but unused vacation in accordance with the Company’s
paid time off policy and expense reimbursements in accordance with Company policy.

 

		3.	In consideration of your acceptance of this Agreement and the execution and non-revocation of the
Release of Claims (“Release”) at Exhibit A within the time specified in the Release, you will be entitled to the following
payments and benefits after the Separation Date:

 

		(a)	The Company will provide you with continued pay for 25 months of $41,075 per month, paid on regularly
scheduled pay dates beginning January 1, 2013, and less ordinary and necessary payroll deductions (“Continued Pay”);
provided, however, because you are considered a “Key Employee” under Treas. Reg. §1.409A-1(i), payments of Continued
Pay will be deferred for six months, with payments for January 1, 2013 through June 30, 2103 being included with the July, 2013
payment. If you die before or during the Continued Pay period, the Company will continue to make the monthly payments of Continued
Pay to your spouse or, if she is not alive at such time, to your estate (and if you die prior to July 1, 2013, payments of Continued
Pay, including any deferred payments, will resume).

 

    	 

    	 

    

 

		(b)	The Company will continue to provide group medical, dental and vision benefits (collectively the
“Benefits”) to you and, if applicable, your spouse and covered dependents, at the same cost it charges its active employees.
Assuming you continue to pay the required premiums at the rate required for the Company’s active employees, the continued
Benefits will cease on the date you become eligible for Medicare because of age or if earlier, the date you become eligible for
coverage under another employer-provided group health plan that provides medical, dental and vision coverage. The Company reserves
the right to change the Benefits provided or your portion of the premium amount, consistent with changes applicable to the Company’s
employees generally. The Company will reflect the Company-paid portion of the premiums on a Form W-2 provided to you each year.
If you die while Benefits are being provided, the date of your death will be considered a “qualifying event” for purposes
of COBRA, entitling your spouse and covered dependents to elect continued Benefits for up to 36 months from the date of your death,
in accordance with the terms of the applicable plans and COBRA, and if COBRA is elected, your spouse and covered dependents will
continue to be charged premiums at the rate required for the Company’s active employees. You acknowledge that the provision
of these Benefits pursuant to this Paragraph 3(b) is in lieu of any COBRA coverage to which you and your spouse and dependents
would otherwise be entitled upon your Separation Date.

 

		(c)	Your termination is considered a termination due to “disability” as defined in your
Stock Option, Restricted Stock and Restricted Stock Unit Agreements and affirmed by the Company’s Board of Directors. Accordingly,
as of the date the revocation period for the Release expires: (i) all of your outstanding stock options that are not yet vested
on such date will be fully vested on such date, and all outstanding stock options will expire on the first anniversary of such
date; and (ii) all restrictions on your Restricted Stock and Restricted Unit Awards will lapse on such date, and the target number
of shares of common stock subject to the Awards will be distributed to you after such date in accordance with the Award Agreements.

 

		(d)	Except as stated above, all other benefits and compensation end on the Separation Date. However,
this Agreement does not affect any existing rights that you may have under the Company’s retirement plans and welfare plans.
You will receive, under separate cover, information regarding your rights and options, if any, under any such plans.

 

		(e)	You acknowledge that no other payments outside this Agreement are due and owing to you.

 

		4.	Beginning January 1, 2013 and continuing until February 28, 2015, you will make yourself reasonably
available to the Company to provide consulting advice, for no additional compensation, from time to time if and as needed by the
Company upon reasonable notice by Paul Isabella, CEO. During this period, you will be an independent contractor and not an employee
of the Company.

 

		5.	You agree that as the Company’s Chief Financial Officer, you have gained competitive, confidential,
trade secret and proprietary information relating to the Company and its business in all 50 states. You further agree that disclosure
or use of this information by you or by any other entity would lead to irreparable harm to the Company. Accordingly:

 

		(a)	You agree that except in your capacity as an employee of the Company, you will not, without the
prior written consent of the Company (which may be withheld in its sole discretion), until December 31, 2017:

 

		(i)	engage or participate in, anywhere in the United States, as an employee, owner, partner, shareholder,
officer, director, member, manager, advisor, consultant, lender, lessor, agent or otherwise, or permit your name to be used by
or render services of any type for, any business that is in whole or in part, directly or indirectly, competitive with the business
of the Company as conducted as of the Separation Date; provided, however, that nothing in this Agreement shall prevent you from
acquiring or owning, but solely as a passive investment, up to five percent of any class of voting securities registered under
the Securities Exchange Act of 1934, as amended, of any issuer engaged in a competing business;

 

		(ii)	take any action which could reasonably be expected to divert from the Company any opportunity which
would be within the scope of the Company’s business;

 

    	 

    	 

    

 

		(iii)	solicit or attempt to solicit any person or entity who is or has been (A) a customer of the Company
at any time within one year prior to the Separation Date to purchase any product or service which may be provided by the Company,
or (B) a customer, supplier, licensor, licensee or other business relation conducting business with the Company at any time within
one year prior to the Separation Date, to cease doing business with, or to alter or limit its business relationship with, the Company;
or

 

		(iv)	solicit attempt to solicit, or assist anyone else to solicit any employee, representative, consultant
or agent of the Company to terminate his, her or its association with the Company or recruit, solicit, hire or otherwise retain
the services of any such person, whether on a full-time basis, part-time basis or otherwise and whether as an employee, independent
contractor, consultant, advisor or in another capacity.

 

		(b)	You hereby acknowledge and agree that:

 

		(i)	the restrictions provided in this section are reasonable in time and scope in light of the necessity
for the protection of the business and good will of the Company and the consideration provided to you under this Agreement; and

 

		(ii)	your ability to work and earn a living will not be unreasonably restrained by the application of
these restrictions.

 

		(c)	You acknowledge that should you fail to comply and do not cure such failure within 30 days’
written notice by the Company of such failure, with the restrictions set forth above, (i) all cash payments under this Agreement
shall cease immediately; (ii) all then unexercised stock options whose vesting was accelerated as a result of your termination
of employment due to disability shall expire immediately; (iii) you will be obligated to remit to the Company, within 30 days of
written demand, all Continued Pay previously paid to you and, in the event you have exercised any stock options whose vesting was
accelerated as a result of your termination of employment due to disability, an amount equal to the difference between the exercise
price of such stock options and the fair market value of the stock of the Company at the time of such exercise, multiplied by the
number of options exercised; and (iv) the Benefits will cease. You also agree that the Company will be entitled, in addition to
any other rights or remedies available to it, to seek injunctive relief.

 

		(d)	In the event the enforceability of any of the covenants in this Paragraph are challenged in court,
the applicable time period as to such covenant shall be deemed tolled upon the filing of the lawsuit challenging such enforceability
until the dispute is finally resolved and all periods of appeal have expired.

 

		6.	You agree to not make any disparaging or negative statements about the Company or its affiliated
companies and its and their officers, directors and employees. The Company agrees not to make any disparaging or negative statements
about you.

 

		7.	You agree to return to the Company all of the Company’s property, including, without limit,
any electronic or paper documents and records and copies thereof that you received or acquired during your employment regarding
the Company’s practices, procedures, trade secrets, customer lists, or product marketing, and that you will not use the same
for your own purpose.

 

		8.	You acknowledge and agree that this Agreement, including the Release set forth in Exhibit A and
the applicable stock and option agreements and plans, sets forth the entire understanding between the parties concerning the matters
discussed herein, that no promise or inducement has been offered to you to enter into this Agreement except as expressly set forth
herein, and that the provisions of this Agreement are severable such that if any part of the Agreement is found to be unenforceable,
the other parts shall remain fully valid and enforceable.

 

		9.	Until December 31, 2017 you agree to notify the Company no later than four business days after
accepting new employment, and thereafter you agree to notify the Company no later than four business days after accepting new employment
that provides group medical, dental and vision benefits.

 

		10.	Except to the extent preempted by federal law, this Agreement is made and entered into in the State
of Massachusetts and the rights and obligations of the parties will be interpreted, enforced, and governed in accordance with the
laws of the State of Massachusetts which are applicable to contracts made and to be performed in that state and without regard
to the principles of conflict of laws. Any legal actions or proceedings against either party arising out of this Agreement or your
employment with the Company will be brought in any court of appropriate jurisdiction sitting in the State of Massachusetts. Each
party submits to and accepts the exclusive jurisdiction of such courts for the purpose of legal actions or proceedings and waives
any objection to this choice of venue.

 

    	 

    	 

    

 

		11.	Each monthly payment described in Paragraph 3(a) will be considered a separate payment for purposes
of Section 409A of the Internal Revenue Code. You and the Company agree that all payments and Benefits to be made or provided to
you under this Agreement either will be exempt from, or will be paid or provided in compliance with, all applicable requirements
of Section 409A of the Internal Revenue Code of 1986, as amended, the regulations issued thereunder and all notices, rulings
and other guidance issued by the Internal Revenue Service interpreting the same and that the provisions of this Agreement shall
be construed and administered in accordance with such intent.

 

		12.	You warrant, after conferring with counsel, that as of the date of this Agreement, you are not
a Medicare beneficiary, and no conditional payments have been made by Medicare on your behalf.

 

		13.	Notwithstanding any of the foregoing, in no event will any payment or benefits be provided pursuant
to this Agreement if, and only if, your employment is terminated by the Company prior to the Separation Date for cause (cause means,
as determined by the Compensation Committee of the Board of Directors in its reasonable judgment, your gross negligence or willful
misconduct in the performance of your duties or your commission of any act of fraud, embezzlement or material dishonesty against
the Company or of any felony; provided, however, that cause will not include your inability to perform your duties for the Company
due to health issues).

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the 17th day of July, 2012.

 

	 	BEACON ROOFING SUPPLY, INC.
	 	 
	 	By: /s/ Ross D. Cooper
	 	 
	 	Its: SVP & General Counsel
	 	 
	 	EMPLOYEE
	 	 
	 	/s/ David R. Grace

 

    	 

    	 

    

 

Exhibit A

 

In consideration
of the payments and benefits provided to you above, to which you are not otherwise entitled and the sufficiency of which you acknowledge,
you do, on behalf of yourself and your heirs, administrators, executors and assigns, hereby fully, finally and unconditionally
release and forever discharge the Company and its parent, subsidiary and affiliated entities and all their former and present officers,
directors, shareholders, employees, trustees, fiduciaries, administrators, attorneys, consultants, agents, and other representatives,
and all their respective predecessors, successors and assigns (collectively “Released Parties”), in their corporate,
personal and representative capacities, from any and all obligations, rights, claims, damages, costs, attorneys’ fees, suits
and demands, of any and every kind, nature and character, known or unknown, liquidated or unliquidated, absolute or contingent,
in law and in equity, enforceable under any local, state or federal common law, constitution, statute or ordinance, which arise
from or relate to your past employment with the Company or the termination thereof, or any past actions or omissions of the Company
or any of the Released Parties, including without limitation, rights and claims arising under the Family and Medical Leave Act,
Title VII of the Civil Rights Act, the Americans with Disabilities Act of 1990, the Age Discrimination in Employment Act, the Older
Worker Benefits Protection Act, the Worker’s Adjustment and Retraining Notification Act, the Employee Retirement Income Security
Act, or any other federal, state or local law or regulation. Subject to applicable law, you also warrant that you have not filed
or sued and will not sue or file any actions against the Company or any of the Released Parties with respect to claims covered
by this release.

 

You recognize
and understand that the foregoing is a general release by which you are giving up the opportunity to obtain compensation, damages,
and other forms of relief for yourself. This Agreement, however, is not intended to and does not interfere with the right of any
governmental agency to enforce laws or to seek relief that may benefit the general public, or your right to assist with or participate
in that process. By signing this Agreement, however, you waive any right to personally recover against the Released Parties, and
you give up the opportunity to obtain compensation, damages or other forms of relief for you other than that provided in this Agreement.

 

You represent
that you are not aware of any facts on which a claim under the Fair Labor Standards Act, the Attorney Fees in Wage Action Act,
or under applicable state minimum wage, wage payment or leave laws, could be brought.

 

Notwithstanding
the foregoing, this release does not include and will not preclude: (a) non-termination related claims under the Massachusetts
Workers Compensation Act (M.G.L. c. 152) or any disability insurance plans; (b) rights to vested benefits under the Company’s
benefit plans; (c) rights to defense and indemnification, if any, from the Company for actions or inactions taken by you in the
course and scope of your employment with the Company; and (d) claims, actions or rights arising under or to enforce the terms of
the Severance Agreement.

 

If you accept
the terms of this Release, please date and sign below and return it to Ross Cooper on December 31, 2012. Once you execute this
Release, you have seven (7) days in which to revoke in writing your acceptance by providing the same to me, and such revocation
will render this Release null and void. If you do not revoke your acceptance in writing and provide it to me by midnight on the
seventh day, this Release shall be effective the day after the seven-day revocation period has elapsed.

 

Sincerely,

 

	BEACON ROOFING SUPPLY, INC.	 
	 	 
	By:	 	 
	Name:	 
	Title:	 

 

By signing this letter, I represent and
warrant that I have not been the victim of age or other discrimination or wrongful treatment in my employment and the termination
thereof. I further acknowledge that the Company advised me in writing to consult with an attorney, that I had at least twenty-one
(21) days to consider this Release, that I received all information necessary to make an informed decision and I had the opportunity
to request and receive additional information, that I understand and agree to the terms of this Release, that I have seven (7)
days in which to revoke my acceptance of this Release, and that I am signing this Release voluntarily with full knowledge and understanding
of its contents.

 

	Dated:	 	 	Signature:	 
	 	 	 	David R. Grace

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