Document:

Exhibit 10.3

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (THE "AGREEMENT") is effective the 1st day of August, 2016, by and between ePlus inc. a Delaware corporation (the "Company") or collectively, with its subsidiaries, the "Companies") and Elaine D. Marion (the "Executive").

RECITAL

The Executive is employed as the Chief Financial Officer, and the parties have negotiated this Agreement in consideration of the Executive's valuable services and expertise.

NOW THEREFORE, in consideration of the mutual promises and covenant herein contained, the parties do hereby agree as follows:

1.  EFFECTIVE DATE.  This agreement shall be effective as of the date noted above.

2.  DEFINITIONS.  As used herein, the following terms shall have the following meanings:

(a)  "Disability" shall mean the Executive's physical or mental inability to perform her duties under this Agreement, for, six months in any twelve month period, with at least three months running continuously, and which renders the Executive incapable of performing her customary and usual duties for the Company, with or without a reasonable accommodation as required by law .

(b)  "Employment Term" shall be the period from August 1, 2016, through and including July 31, 2017, and any renewal period thereafter.  Unless either the Company or the Executive delivers a notice of termination to the other party, not less than 60 days prior to the end of the Employment Term, then this Agreement shall automatically renew for successive one-year periods.

(c)  "Expiration Date" means the date that the Employment Term (as it may have been extended) expires.

(d)  "Good Cause" means that the Compensation Committee of the Company's Board of Directors (the "Board") in good faith determines that the Executive:

(1)  Failed to satisfactorily perform her duties to the Company and such failure was not cured within 30 days of the Company's providing Executive written notice of such failure; or

(2)  Failed to comply with a  material policy of the Company that was applicable to the Executive and such failure was not cured within 30 days of the Company's providing Executive written notice of such failure; or

(3)  Acted or failed to act in a manner that constitutes gross misconduct, embezzlement, misappropriation of corporate assets, breach of the duty of loyalty, fraud or negligent or willful violations of any laws with which the Company is required to comply; or

(4)  Was convicted of or entered a plea of "guilty" or "no contest" to a felony; or

(5)  Refused or failed to comply with lawful and reasonable instructions of the Board and such refusal or failure was not cured within 30 days of the Company's providing Executive written notice of such refusal or failure; or

(6)  Any other material breach of this Agreement by the Executive that is not cured within 30 days of the Company's providing Executive written notice of such breach.

 "Good Cause" shall not include failures as set forth this Section 2(d) when such failure is a result of the Executive's illness or injury.

(e)  "Good Reason" shall mean that within 30 days prior to the Executive's providing the notice to the Company required under Section 6(b)(2) of this Agreement that any of the following has occurred:

(1)  a material change in the scope of the Executive's assigned duties and responsibilities or the assignment of duties or responsibilities that are inconsistent with the Executive's level or position; or

(2)  a reduction by the Company in the Executive's base salary as set forth herein as may be increased from time to time or a reduction by the Company in the Executive's incentive compensation; or

(3)  a change in the Executive's principal office to a location outside of a 35 mile radius from the Company's offices in Herndon, Virginia; or

(4) the failure by the Company to continue to provide the Executive with benefits substantially similar to those specified in Section 5 of this Agreement; or

(5) a termination of employment by the Executive for any reason during the 90-day period immediately following a Change of Control as "Change of Control" is defined in the  Employee Long-Term Incentive Plan in effect, or most recently in effect, at the time of the Change in Control; or

(6)  the Company delivers a timely notice (see Section 2(b)) to the Executive that the Agreement will terminate at the end of the Employment Term, and within thirty days after receipt of said notice the Executive tenders her resignation from the Company (to be effective at the end of the Employment Term); or

(7) Any other material breach of this Agreement by the Company that is not cured within 30 days of the Executive providing the Company written notice of such breach.

(f)  "Termination Date" shall mean the date Executive's termination is effective, as described in the respective subparts of Section 6.

3.  EMPLOYMENT.  The Company and Executive hereby agree to employ the Executive as set forth herein during the Employment Term and until Executive's employment terminates pursuant to Section (2)(b) or Section 6 below.

4.  POSITION, DUTIES AND RESPONSIBILITIES.  During the Employment Term, the Executive shall:

(a)  serve as the Company's Chief Financial Officer.  The Executive shall be responsible for, but not limited to, the following areas: finance, tax, insurance, budget, treasury and accounting.

(b)  render such other services to the Company as requested provided that such services are consistent with the level of her position; and

(c)  devote her substantially full business time, attention, skill and energy to the business of the Company and not engage or prepare to engage in any other business activity, whether or not such business activity is pursued for gain, profit or other economic or financial advantage.   Executive may engage in appropriate civic, charitable, or educational activities provided that such activities do not materially interfere or conflict with the Executive's responsibilities or the Company's interests.  Nothing in this Agreement shall preclude Executive from acquiring or managing any passive investment she has in publicly traded equity securities in companies that are not in the same line of business as the Company.

5.  COMPENSATION, COMPENSATION PLANS AND BENEFITS.  During the Employment Term, the Executive shall be compensated as follows:

(a)  Effective June 10, 2015, Executive shall receive a base annual salary of four hundred fifteen thousand ($415,000 Dollars), which may be increased from time to time.

(b)  Based on applicable MBOs and company performance the Executive shall be eligible to be considered for an annual bonus as set forth in the terms and conditions as outlined in the Executive Incentive Plan ("EIP") and any applicable award agreement thereunder.  The Company shall pay any bonus earned under this Section 5(b) no earlier than the end of the fiscal year for which earned and no later than the next September 30th following the fiscal year in which the bonus was earned, provided that financial filings are timely provided to the Compensation Committee. In no event will any bonus earned under this Section 5(b) be paid later than the next December 31st following the fiscal year for which the bonus was earned, unless calculation of the bonus is not administratively practicable by that date, and further delay would not violate Code Section 409A.

(c)  The Executive shall be entitled to participate in and receive other benefits offered by the Company to all employees, which may include, but are not limited to, vacation, sick, holiday and other leave times, and benefits under any life, health, accident, disability, medical, and dental insurance plans.

(d)  The Executive shall be entitled to be reimbursed for the reasonable and necessary out-of-pocket expenses, including entertainment, travel and similar items and all expenses necessary to maintain her professional, industry association memberships incurred by her in performing her duties, in accordance with the Company's expense reimbursement policies in place from time to time. Any reimbursements which are includible in gross income of the Executive under this section 5(d) must meet the following conditions.  Such reimbursements: (i) must be for expenses incurred during the term of this agreement; (ii) shall not be subject to liquidation or exchange for any other benefit; (iii) shall not affect eligibility for reimbursements in any other taxable year of the Executive; and (iv) shall be made no later than the last day of the Executive's taxable year following the taxable year in which the expense was incurred.

(e)  In the event Executive's employment with the Company terminates for any reason, any payments and benefits due the Executive under the Company's employee benefit plans and programs, including any Long-Term Incentive Plan, shall be determined in accordance with the terms of such benefit plans and programs, and shall be in addition to any other payments or benefits herein.

(f)  In the event it is determined that any bonus or other incentive compensation payable by the Company to the Executive was paid based on incorrect financial results, the Compensation Committee will review such payment.  If the amount of the payment would have been lower had the level of achievement of applicable financial performance goals been calculated based on the correct financial results, the Company's Compensation Committee may, in its sole discretion, adjust (i.e., lower) the amount of such payment so that it reflects the amount that would have applied based on the correct financial results and, to the extent permitted by applicable law, require the reimbursement by Executive of any amount paid to or received by the Executive with respect to such bonus or other incentive compensation.  Additionally, bonuses or other incentive compensation payable to the Executive by the Company are subject to recovery by the Company to the extent required by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the Sarbanes-Oxley Act of 2002 and any regulations promulgated thereunder.  Except as required by law, this subsection shall not apply to time-vested stock options, restricted stock or restricted stock units which are not awarded, granted or vested based on financial measure required to be reported under the securities laws.

6.  TERMINATION OF EMPLOYMENT

(a)  Termination by the Company.

(1) Termination for Good Cause.  During the Employment Term, the Company may terminate the Executive's employment for Good Cause. In the absence of cure by the Executive as per Section 2(d), if applicable, termination by the Company for Good Cause shall be retroactive to the date the Company provides notice to the Executive of the Good Cause Event.

(2) Termination without Good Cause.  During the Employment Term, the Company may terminate the Executive's employment at any time without Good Cause upon the Company's payment to the Executive for the 30 days' written notice period to the Executive or 30 days' pay in lieu of such notice.  Termination is effective 30 days after the date the written notice of termination is provided to the Executive. The Company may, in its sole discretion, place the Executive on paid administrative leave as of any date prior to the end of the 30-day notice period and require that the Executive no longer be present on Company premises.  During any period of paid administrative leave, the Executive is not authorized to act or speak as a representative of the Company.

(b)  Termination by Executive.

(1) Termination for any (or no) reason.  During the Employment Term, the Executive may voluntarily terminate her employment for any reason with the Company upon 30 days prior written notice. Termination is effective 30 days after the date the notice is provided to the Company.  The Company may, in its sole discretion, place the Executive on paid administrative leave as of any date prior to the end of the 30-day notice period and require that the Executive no longer be present on Company premises.  During any such period of paid administrative leave, the Executive is not authorized to act or speak as a representative of the Company.

(2) Termination for Good Reason.  During the Employment Term, the Executive may terminate her employment for Good Reason as defined in Section 2(e) only if the Executive has provided the Board with written notice of her intent to terminate her employment for Good Reason at least 30 days prior to the date of termination and the Company fails to cure the Good Reason within 30 days after receiving Executive's written notice.  Termination for Good Reason will be effective on the 31st day after the Company receives Executive's written notice and fails to cure the Good Reason identified in Executive's notice.

(c)  Termination by Reason of Death or Disability.  Executive's employment with the Company shall be deemed to have been terminated effective upon the date of Executive's death, or the date upon which either party provides the other party with notice of Disability.

(d)  At-will Termination.   If the Employment Term ends based on the Company's delivering a notice of termination under Section 2(b), then (i)  the parties can enter into a new employment agreement, or (ii) the Executive can terminate her employment for Good Reason pursuant to Section 2(e)(6), or(iii) the Executive's employment with the Company shall continue on an at will basis and either the Company or the Executive may terminate her employment at any time for any reason or no reason upon 30 days' written notice, and the Company may choose to end the employment relationship at any time during any such notice period, provided that the Company pays the Executive for the balance of such notice period.

7.  EFFECT OF TERMINATION.

(a)  Termination for any reason.  If the Executive's employment ends at any time (during or after the Employment Term) for any reason, the Company shall pay the Executive her then current base salary and provide the Executive her then current benefits (as provided in Section 5) through the Termination Date.

(b)  Provided that after the Termination Date the Executive (i) signs in the form provided by the Company a release of any claims Executive may have against the Company or its then current or former officers, directors, or employees (hereinafter "Release", attached hereto as Exhibit 1)  and returns the signed copy of the Release to the Company within the period described in Section 7(b(5), and (ii) certifies that the Executive has complied with Sections 8, 9, 10,  11 and 12 of this Agreement (confidentiality, intellectual property, non-compete, non-solicit, conflict of interest and return of property provisions), then:

(1)  Death or Disability:  If, during the Employment Term, the Executive's employment terminates by reason of death or Disability as described in Section 6(c), then:

(a)  Unvested Stock.  Executive shall be entitled to the acceleration of vesting of any restricted stock, as set forth in the relevant Long-Term Incentive Plan and award agreement; and

(b)  Severance.  In the event of Disability only, the Company shall pay to Executive a cash severance in the amount equal to twelve months of her then-base annual salary; and

(c)  EIP Award.  The Company shall pay to the Executive, or to her estate, a pro-rated target amount due under any Executive Incentive Plan ("EIP") award agreement, as described in Section 5(b), multiplied by a fraction, the numerator of which is the number of months (including partial months) in the period beginning on the first day of the relevant performance period and ending with the date as of which the Executive's employment with the Company terminated and the denominator of which is the number of months in such performance period.

Notwithstanding anything to the contrary, the release of claims requirement shall be waived if the Executive's death or Disability renders her unable to sign the Release.

(2)  Termination without Good Cause; Termination for Good Reason.  If, during the Employment Term, the Company terminates the Executive's employment without Good Cause as described in Section 6(a)(2) or Executive terminates her employment for Good Reason, as described in Section 6(b)(2), then:

(a) The Company shall pay Executive a severance amount equal to twelve months of her then-base annual salary; and

(b) The Company shall either, at the Company's choice: (1) accelerate the vesting of any restricted stock owned by the Executive at the Termination Date or (2) pay to Executive an amount equal to the value of any restricted stock she forfeits at the Termination Date, and

(c) The Company shall pay to the Executive  a pro-rated target amount due under any Executive Incentive Plan ("EIP") award agreement, as described in Section 5(b), multiplied by a fraction, the numerator of which is the number of months (including partial months) in the period beginning on the first day of the relevant performance period and ending with the date as of which the Executive's employment with the Company terminated and the denominator of which is the number of months in such performance period;

(3)   Any payment due to the Executive under this Section 7(b) shall be made in a lump sum within sixty (60) days following the Termination Date.

(4)  Notwithstanding the above, if the Executive is a "specified employee" within the meaning of Section 20, the payments under Subsections 7(b) above shall be made no earlier than the date provided in Section 20.

(5)  Any release and certification required from the Executive under the first paragraph of this Section 7(b) shall be on the form attached as Exhibit 1 unless the Company has provided Executive a different form on or before her termination of employment.  The applicable release and certification must be signed and returned by Executive to the Company within twenty one (21) days of the Termination Date and not revoked in order for Executive to be entitled to payments under Section 7(b).  Except as provided by subsection 7(b)(4),  provided the requirements of this subsection are met, any lump sum payment due Executive under subsection 7(b) shall be paid on the last day of the, sixty (60) day period in which the Company may make such payment in compliance with the applicable provision.

(c)  COBRA upon termination.  In the event Executive's employment is terminated due to Disability, by the Company Without Good Cause, or by the Executive for Good Reason, provided that the Executive remains eligible for and timely elects to continue her and any eligible dependents' health benefits under COBRA, the Company shall also pay to the insurer the amount necessary for the Executive to continue medical and dental insurance for herself and her dependents through COBRA for eighteen months.  The Executive shall not be obligated in any way to mitigate the Company's obligations to her under this Section.

8.  CONFIDENTIALITY.  During the course of employment, Executive has had and shall continue to have access to the Company's Confidential Information (as defined below).  Executive shall not disclose or use at any time, either during her employment or after her employment ends for any reason, any Confidential Information (as defined below) of the Company, whether or not patentable, which Executive learns as a result of her involvement with the Company, whether or not she developed such information.  "Involvement with the Company" for purposes of this Agreement shall mean holding a position as an employee, officer, or director with either the Company or any of its subsidiaries or affiliates (collectively, the "Companies").  "Confidential Information" means Company information that is material to the Company's business and that is not generally known by, or made available to, the public. The term "Confidential Information" shall specifically exclude any information known to the Executive prior to her employment with the Company regardless of whether such information otherwise would be deemed "Confidential Information." "Confidential Information" shall include, without limitation, information regarding:

	
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"Trade Secrets" or proprietary information;

	
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strategic sourcing information or analysis;

	
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patents, patent applications, developmental or experimental work, formulas, test data, prototypes, models, and product specifications;

	
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accounting and financial information;

	
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financial projections and pro forma financial information;

	
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sales and marketing strategies, plans and programs

	
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product development and product testing information;

	
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product sales and inventory information;

	
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personnel information, such as employees' and consultants' benefits, perquisites, salaries, stock options, compensation, formulas or bonuses;

	
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organizational structure and reporting relationships;

	
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business plans;

	
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names, addresses, phone numbers of customers;

	
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contracts, including contracts with clients, suppliers, independent contractors or employees; business plans and forecasts;

	
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existing and prospective projects or business opportunities; and

	
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passwords and other physical and information security protocols and information.

"Trade Secrets" includes any information that derives independent economic value, actually and potentially, from not being generally known to, and is not readily being ascertainable by proper means by, other persons who can obtain economic value from their disclosure or use and that are the subject of efforts that are reasonable under the circumstances to maintain their secrecy.  Information that is or later becomes publicly available in a manner wholly unrelated to any breach of this Agreement by Executive or other improper means will not be considered Confidential Information as of the date it enters the public domain.  If Executive is uncertain whether something is Confidential Information, Executive should treat it as Confidential Information until she receives clarification from the person to whom she reports that it is not Confidential Information.  Confidential Information shall remain at all times the property of the Company.  Executive may use or disclose Confidential Information only:

(a)  when she is employed by the Company, as authorized and necessary in performing the responsibilities of her position, provided that she has taken reasonable steps to ensure that the information remains confidential; or

(b)  with prior written consent of the CEO; or

(c)  in a legal proceeding between Executive and the Company to establish the rights of either party under this Agreement, provided that Executive stipulates to a protective order to prevent any unnecessary use or disclosure; or

(d)  where such disclosure is required by law, provided that Executive has complied with the following procedures to ensure that the Companies have an adequate opportunity to protect their legal interests.  Upon receipt of a subpoena or any other compulsory legal process ("Compulsory Process") that could possibly require disclosure of Confidential Information, Executive shall make her best effort to provide within forty-eight (48) hours of receiving it a copy of the Compulsory Process and complete information regarding the circumstances under which she received it to the General Counsel by hand delivery or by email provided that Executive confirms with the General Counsel by phone conversation that the General Counsel received the email.  To provide the Company with the greatest opportunity to assess the need for protection from disclosure, Executive shall not make any disclosure until the latest possible date for making such disclosure in accordance with the Compulsory Process ("Latest Possible Date").  If one of the Companies seeks to prevent disclosure in accordance with the applicable legal procedures, and provides Executive with notice before the Latest Possible Date that it has initiated such procedures, Executive shall not make disclosures of any Confidential Information that is the subject of such procedures, until such objections are withdrawn, or the appropriate tribunal either makes a final determination that the objections are invalid or orders Executive to make the disclosure, unless otherwise required by law.

Executive hereby acknowledges that any breach of this Section 8 would cause the Company irreparable harm.  Nothing in this Agreement prohibits Executive from reporting an event that he reasonably and in good faith believes is a violation of law to the relevant law-enforcement agency (such as the Securities and Exchange Commission, Equal Employment Opportunity Commission, or Department of Labor), or from cooperating in an investigation conducted by such a government agency.  This may include disclosure of trade secret or confidential information within the limitations permitted by the 2016 Defend Trade Secrets Act (DTSA).  Employee is hereby provided notice that under the  DTSA, (1) no individual will be held criminally or civilly liable under Federal or State trade secret law for the disclosure of a trade secret (as defined in the Economic Espionage Act) that: (A) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and made solely for the purpose of reporting or investigating a suspected violation of law; or, (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal so that it is not made public; and, (2) an individual who pursues a lawsuit for retaliation by an employer for reporting a suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade secret, except as permitted by court order.

9.  INTELLECTUAL PROPERTY.  Executive  acknowledges that all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, original works of authorship, copyrights and all similar or related information (whether or not patentable) which relate to the Company's actual or anticipated business, research and development or existing or future products or services and which are conceived, developed or made by Executive while employed by the Company ("Intellectual Property") belong to the Company.  Executive agrees that both during and after her employment with the Company that she will sign any documents or provide any information necessary for the Company to protect its rights to such Intellectual Property.  If Executive is unavailable to sign any document that is necessary for the Company to protect its rights to such Intellectual Property, Executive hereby authorizes the Company to sign on her behalf.

10.  NON-COMPETITION and NON-SOLICITATION.  During Executive's employment and for a period of one year following the date on which her employment ends for any reason, (the "Restricted Period"), the Executive agrees to the following below Non-Competition and Non-Solicitation restrictions.

 (a)  Non-Competition. Executive shall not, directly or indirectly, individually or as part of or on behalf of any other person, company, employer or other entity, except with prior written approval of the Company's CEO, own, manage, operate,  advise, consult with, control or otherwise be employed by or provide services to or on behalf of a Competing Business that are the same or similar to the services she provided to or on behalf of the Company.  "Competing Business" shall mean a business that is selling products or services similar to those products or services that any of the "Covered Entities" is selling as of the date the Executive's employment ends "Covered Entities" include the Company and any affiliated entities in which Executive is actively engaged as an officer, director or employee or about which Executive has received Confidential Information as a result of her Involvement with the Company.

(b)  Non-Solicitation of Employees.  Executive  shall not,  either directly or indirectly or on behalf of herself or on behalf of any other person or entity, without prior written consent from the Company, solicit or otherwise encourage in any manner: (i) an employee of the Company to leave the employ of the Company; or (ii) a former employee of the Company that was employed by the Company within the past twelve (12) months at the time of the solicitation or encouragement to work for a Competing Business.  For the purpose of this provision, "employee" shall mean an employee with whom the Executive worked or about whom the Executive had material knowledge with respect to their skills.

(c)  Non-solicitation of Customers, Potential Customers and Vendors.  Executive shall not, either directly or indirectly or on behalf of herself or on behalf of any other person or entity, without prior written consent from the Company, solicit or otherwise encourage in any manner:

(i) any customer of the Company, whom the Executive, while employed by the Company, rendered services to, contacted or attempted to contact, recruited or attempted to recruit, solicited or attempted to solicit, while employed by the Company to (a) end its relationship with the Company or to (b) enter into or continue a relationship with another person or entity to provide the same or similar service(s) that the Company provides;

(ii) any vendor or partner of the Company, or any other third-party, to disclose or discuss any information about any customer of the Company whom the Executive, while employed by the Company, rendered services to, contacted or attempted to contact, recruited or attempted to recruit, solicited or attempted to solicit, while employed by the Company; or

(iii) any potential customer of the Company, whom the Executive, while employed by the Company, contacted or attempted to contact, recruited or attempted to recruit, solicited or attempted to solicit,  to enter into or continue a relationship with another person or entity to provide the same or similar service(s) that the Company provides.

(d)  Nature of Restrictions. Executive acknowledges that as a result of her employment as Chief Financial Officer of the Company, she has held and will continue to hold a position of utmost trust in which Executive has come to know and will continue to come to know the Company's employees, Customers and Confidential Information.  Executive agrees that the provisions of this entire Section 10 are necessary to protect the Company's legitimate business interests.  Executive warrants that these provisions shall not unreasonably interfere with her ability to earn a living or to pursue her occupation after her employment ends for any reason.  Executive agrees that upon beginning any new employment or business during the Restricted Period, she will promptly inform the Company of the name and address of her new employer or business and provide such new employer or business with a copy of this Agreement and copy the Company on the letter or email transmitting the Agreement to the appropriate person in such new employer or business.

11.  CONFLICT OF INTEREST.  During her employment, Executive agrees to have undivided loyalty to the Company.  This means that Executive shall avoid any situation that involves or has the potential to appear to involve a conflict of interest, including, but not limited to, participating in a business transaction that personally benefits Executive or a relative based on information or relationships developed on the job, failing to disclose that someone who is doing or seeking to do business with or work for the Company is a relative or close personal associate, or receiving direct or indirect compensation from a client or vendor.

12.  RETURN OF PROPERTY.  On the date Executive's  employment ends for any reason, or at any time during her employment, on the request or direction of the Company, Executive will immediately deliver to the Company any or all equipment, property, material, Confidential Information, Intellectual Property or copies thereof which are owned by the Company and are in Executive's possession or control.  This includes documents or other information prepared by Executive, or provided to her in connection with her duties while employed by the Company, regardless of the form in which such document or information are maintained or stored, including computer, typed, handwritten, electronic, audio, video, micro-fiche, imaged, drawn or any other means of recording or storing documents or other information.  Executive hereby warrants that she will not retain in any form such documents, Confidential Information, Intellectual Property or other information or copies thereof after Exectuve's employment ends for any reason, provided that the  Executive may retain a copy of this Agreement and any other document or information describing any rights she may have after the Termination Date.

13.  COOPERATION WITH LEGAL PROCEEDINGS.  Executive agrees to reasonably cooperate with the Company in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of any of the Companies, which relate to events or occurrences that transpired while Executive was employed by any of the Companies.  Executive's reasonable cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of any of the Companies.  Executive also agrees to reasonably cooperate with any of the Companies in connection with any investigation or review of any federal, state, or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while Executive was employed by any of the Companies.  Executive understands that in any legal action, investigation, or review covered by this Section the Company expects Executive to provide only accurate and truthful information or testimony. The Company agrees to reimburse the Executive for any costs she incurs in cooperation pursuant to this Section, including but not limited to travel expenses and attorneys' fees and costs. Nothing in this Section shall limit any indemnification rights Executive may have on the effective date of this Agreement.

14.  REMEDY.

(a)  Executive acknowledges that her breach of the obligations contained in Sections 8, 9, 10, 11 and 12 of this Agreement would cause the Company irreparable harm that could not be reasonably or adequately compensated by damages in an action at law.  If Executive breaches or threatens to breach any of the provisions contained in Sections 8, 9, 10, 11 and 12 of this Agreement, the Company shall be entitled to an injunction, without bond, restraining her from committing such breach.  The Company's right to exercise its option to obtain an injunction shall not limit its right to any other remedies, including damages.

(b)  Any action relating to or arising from this Agreement shall be brought exclusively in a court of competent jurisdiction in the Commonwealth of Virginia, and Executive hereby consents to venue and personal jurisdiction in any such court in the Commonwealth of Virginia.

(c)  Executive expressly waives any right to a trial by jury for any action relating to or arising from this Agreement.

15.  SUCCESSORS; BINDING AGREEMENT.

(a)  This Agreement shall be binding upon, and inure to the benefit of the parties hereto and their heirs, successors and assigns.

(b)  The Company shall require any successor to all or substantially all of the business or assets of the Company expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.

16.   NOTICES.  For the purpose of this Agreement, notices and all other communications provided herein shall be in writing and shall be deemed to have been duly given when delivered in person or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

	
IF TO THE EXECUTIVE:

	 	
IF TO THE COMPANY:

	 
	 	 	 	 
	
Elaine D. Marion

	 	
ePlus inc.

	 
	
c/o ePlus inc.

	 	
13595 Dulles Technology Drive

	 
	
13595 Dulles Technology Drive

	 	
Herndon, VA 20171

	 
	
Herndon, VA 20171

	 	 	 

17.  GOVERNING LAW.  All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

18.  SEVERABILITY.  The provisions of this Agreement are severable, and if any part of it is found to be unlawful or unenforceable, the other provisions of this Agreement shall remain fully valid and enforceable to the maximum extent consistent with applicable law.

19.  MISCELLANEOUS.  No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company.  No waiver by either party hereto at any time of any breach by the other party hereto of, or noncompliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of other provisions or conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.

20.  CODE SECTION 409A.  It is the intent of this Agreement to either meet an exception from or to comply with the requirements of Section 409A ("Section 409A") of the Internal Revenue Code of 1986, as amended, and any rulings and regulations promulgated thereunder (collectively, the "Code"), and any ambiguities herein will be so interpreted and this Agreement will be so administered.  References to a termination of employment in Section 6 and/or 7 of this Agreement shall mean the date of a "separation from service" within the meaning of Section 409A(a)(2)(A)(i).  If the Executive is a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) at the time of the Executive's termination of employment, any nonqualified deferred compensation subject to Section 409A that would otherwise have been payable under this Agreement as a result of, and within the first six (6) months following, the Executive's "separation from service" and not by reason of another event under Section 409A(a)(2)(A), will become payable six (6) months and one (1) day following the date of the Executive's separation from service or, if earlier, the date of Executive's death.  Any such "nonqualified deferred compensation" shall not be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, garnishment by creditors, or borrowing, to the extent necessary to avoid tax, penalties and/or interest under Section 409A.  The Company agrees that it will pay, indemnify and hold the Executive harmless for any additional tax or interest penalty payable amount by the Executive on account of a violation of Section 409A.  Any payment by the Company of such amount shall include a "gross-up" payment, which shall be the amount required to cause the net amount retained by the Executive after payment of all taxes, including taxes on the "gross-up" payment, to equal the amount of additional tax and interest penalty payable by the Executive on account of the violation of Section 409A.  Such payment shall be made by the Company within thirty (30) days of the date that Executive submits proof of payment of such taxes to the taxing authority and not later than the end of Executive's taxable year next following the taxable year in which the Executive submits the respective taxes to the taxing authority. The Executive agrees that the Company may amend this Agreement, with the consent of the Executive, as the Company determines is necessary or advisable so that payments made pursuant to this agreement will not result in additional taxation of the Executive pursuant to the provisions of Section 409A.  The Executive agrees that she will not withhold her consent under this Section 20 if the proposed amendment does not materially adversely affect the Executive's rights under this Agreement.

21.  CODE SECTION 280G.  In the event the Company (or its successor) and Executive agree, based on the advice of an independent nationally recognized public accounting firm engaged by the Company, that part or all of the consideration, compensation or benefits to be paid to or for the benefit of Executive under this Agreement constitute "parachute payments" under Section 280G(b)(2) of the Code ("Section 280G"), then either (a) or (b) below shall apply.

(a)  Except as provided in Section 21(b), if the aggregate present value of such parachute payments, singularly or together with the aggregate present value of any consideration, compensation or benefits to be paid to or for the benefit of Executive under any other plan, arrangement or agreement which constitute "parachute payments", calculated as provided under Section 280G, (collectively, the "Parachute Amount") exceeds 2.99 times Executive's "base amount", as defined in Section 280G(b)(3) (the "Base Amount"), the amounts constituting "parachute payments" which would otherwise be payable to Executive or for Executive's benefit shall be reduced to the extent necessary so that the Parachute Amount is equal to 2.99 times the Base Amount (the "Reduced Amount").

 (b)  The Parachute Amount shall not be reduced as provided in Section 21(a) above if, based on the advice of such public accounting firm, without such reduction Executive would be entitled to receive and retain, on a net after-tax basis (including, without limitation, after imposition of any excise taxes payable under Section 4999 of the Code), an amount which is greater than the amount, on a net after-tax basis, that Executive would be entitled to retain upon receipt of the Reduced Amount.

If the determination made above results in a reduction under Section 21(a) above of the payments that would otherwise be paid to or for the benefit of Executive, such reduction in payments shall be first applied to reduce any cash severance payments that Executive would otherwise be entitled to receive hereunder and shall thereafter be applied to reduce other payments and benefits in a manner that would not result in subjecting Executive to additional taxation under Section 409A.

22.  STATUS OF PRIOR EMPLOYMENT AGREEMENTS.  Executive acknowledges that this Agreement supplants and replaces in full all prior employment agreements between Executive and the Company.  Executive waives any and all rights to enforce any and all provisions in any prior employment agreement between Executive and the Company.

	
ePlus inc.

	 	
Executive

	 	 	 
	 	 	 
	
/s/ Erica S. Stoecker

	 	
/s/ Elaine D. Marion

	
Erica S. Stoecker

	 	
Elaine D. Marion

	
General Counsel

	 	
Chief Financial Officer

	 	 	 
	
Date:

	
July 25, 2016

	 	
Date:

	
July 25, 2016

 

EXHIBIT 1

SAMPLE RELEASE

This Release is entered into by ePlus inc. (hereafter referred to as "ePlus" or the "Company") and _______________________(hereafter referred to as "Employee").

WHEREAS, Employee's employment with ePlus terminated effective (insert date).

NOW THEREFORE, in consideration of the premises and mutual promises contained in the Employment Agreement between Employee and ePlus, the parties agree as follows:

Employee agrees to and does hereby release ePlus, its past and present officers, directors, agents, shareholders, trustees, partners, employees, in their individual and/or corporate capacities, as well as its employee benefit plans, affiliates, subsidiaries, predecessors, successors and successors in interest (the "Releasees")  from all claims, charges, causes of action or other liabilities (hereafter collectively referred to as "claims"), whether in contract or tort, known or unknown, arising out of or relating in any way to her employment and/or termination of employment with ePlus, including, but not limited to, claims for wrongful discharge, breach of contract, express or implied, claims for wages, other compensation, pension, severance pay or any other benefits of any kind, including but not limited to claims arising under Employee Retirement Income Security Act of 1974 ("ERISA"), claims for alleged discrimination under federal, state or local law, including but not limited to Title VII of the Civil Rights Act of 1964 ("Title VII"), the Civil Rights Act of 1991, the Age Discrimination in Employment Act ("ADEA"), and the American With Disabilities Act ("ADA"), claims arising under federal, state or local law pertaining to family and/or medical leave ("FMLA"), and any other claims relating to her employment which could be brought under federal, state or local law.  Any initiation of claims prohibited by this Release shall be a breach of this Release and shall entitle ePlus to recover the consideration as set in Section 7(b) of the Employment Agreement, along with reasonable attorney's fees incurred by ePlus to litigate any such action to the extent permitted by law.  THIS IS A GENERAL RELEASE.

Under the Older Workers Benefits Protections Act ("OWBPA"), Employee may, if desired, have a period of twenty-one calendar days to consider this Release, including its reference to the ADEA contained in this paragraph.  Employee is also advised to consult with an attorney (without expense to ePlus) concerning release of claims under the ADEA prior to executing this Release (the "Revocation Period")..  In addition, Employee may revoke this Release within a period of seven calendar days following execution of this Release.  If Employee does not revoke this Release during the Revocation Period, this Release will become fully effective upon the expiration of the revocation period.

Excluded from this Release are any claims which cannot be waived by law.  The Employee is waiving, however, her right to any monetary recovery should any governmental agency or entity, such as the U.S. Equal Employment Opportunity Commission ("EEOC") or the U.S. Department of Labor ("DOL"), pursue any claims on her behalf.  Further, no provision of this Release should be construed or interpreted to preclude or in any way limit or restrict the Employee's right to initiate an action against the Company under the OWBPA or ADEA challenging, under the ADEA, the waiver and release of claims contained in this Release on the grounds that they were not knowing and voluntary.  To the extent that any provision of this Release is determined to be in violation of the OWBPA or ADEA, it should be severed or modified to comply with the OWBPA or ADEA, without affecting the validity or enforceability of any of the other terms or provisions of this Release.

The provisions of this Release shall inure to the benefit of the parties, their successors and assigns and shall be binding upon the parties and their heirs, executors, administrators, successors and assigns.

This Release shall be interpreted, applied and enforced in accordance with and shall be governed by the laws of the state of Delaware, without regards to its conflict of laws provisions.

Employee hereby certifies she has complied with Sections 8, 9, 10, 11 and 12 of her Employment Agreement (confidentiality, intellectual property, non-compete, non-solicit, conflict of interest and return of property provisions).

IN WITNESS WHEREOF, the parties have executed this Release on the date set forth next to each party's signature.

	
EMPLOYEE

	 	
ePlus

	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
Signature

	 	
Signature

	 
	 	 	 	 
	 	 	 	 
	
Date

	 	
Name/Title

	 
	 	 	 	 
	 	 	 	 
	 	 	
DateExhibit 10.1

 

SETTLEMENT and RELEASE AGREEMENT

 

This Settlement and Release Agreement (“Agreement”),
dated May 18, 2016, by and between Lumber Liquidators Holdings, Inc. (“LL”) and Robert Martin Lynch (“Employee”),
states as follows:

 

RECITALS:

 

WHEREAS,
Employee has been employed by the Company pursuant to the terms of an Executive Employment Agreement dated December 17, 2010, and
amendments thereto (the “Executive Employment Agreement,” attached hereto as Exhibit A);

 

WHEREAS,
the Employee’s employment with the Company has concluded; 

 

WHEREAS
certain disputes have arisen between LL and Employee concerning certain of the terms and obligations provided for in the Executive
Employment Agreement and other matters; and

 

WHEREAS,
Employee and Company desire to settle any and all matters arising out of Employee’s employment with the Company, the cessation
of Employee’s employment with the Company, and any other disputes between them in a mutually satisfactory manner.

 

NOW, THEREFORE,
in consideration of the promises and of the mutual covenants contained in the herein contained and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties do hereby covenant and agree as follows:

 

AGREEMENT:

 

1.          Termination
of Employment. Employee acknowledges that his employment by LL and/or its affiliated entity(ies) (collectively and, where applicable,
individually, the “Company”) concluded on May 21, 2015 (the “Separation Date”).

 

2.          Separation
Pay. In consideration of Employee’s acceptance of this Agreement, and expressly subject to the Employee's ongoing compliance
with the Agreement, including but not limited to Sections 5 and 7-9 herein, the Company shall:

 

  i.            pay to Employee a sum totaling one-million dollars ($1,000,000) (the “Separation Pay”). The Separation Pay shall be paid as follows:

 

  - an initial lump sum payment constituting five hundred thousand dollars ($500,000) of the Separation Pay, less applicable taxes and withholdings, shall be paid in the first regular pay period occurring after the Effective Date of this Agreement; and

 

  - the remaining half ($500,000) of the Separation Pay shall be paid in twenty-six (26) equal weekly installments, pursuant to the Company’s normal payroll procedures, beginning on the first regular pay period occurring after the payment of the initial lump sum payment.

 

     

     

    

  

ii.         waive
and release its right to collect payback or restitution for payments made to Employee pursuant to the Relocation Assistance Agreement
between Company and Employee executed on or about February 5, 2014.

 

Employee agrees that, in the event that (a) the Company issues
a restatement which restatement is found by a final order of a competent court or governmental agency to have been caused by Employee’s
material noncompliance, due to misconduct, with financial reporting requirements under federal securities laws and, as a consequence
of such restatement and finding, repayment or clawback of the amounts herein are determined by a final order of a competent court
or governmental agency to be mandated pursuant to any law, government regulation or stock exchange listing or (b) Employee breaches
this Agreement, expressly including but not limited to Sections 5 and 7-9 herein; then, in each such instance, in addition
to compensation for any damages incurred by the Company, and/or any injunctive relief provided for herein or otherwise, Employee
shall be liable for the repayment of all amounts paid to Employee pursuant to this Section 2, and Employee agrees to repay all
such amounts in full.

 

3.          
Consideration/Complete Payment. Employee hereby agrees and acknowledges that the benefits set forth in Section 2 of this Agreement
are more than the Company is required to provide under its normal policies and procedures, are more than Employee is entitled to
under the Executive Employment Agreement and any other agreement or contract with the Company, and that they are in addition to
anything of value to which Employee already is entitled. Employee further agrees that, other than with respect to payments regarding
the non-released rights for monetary or other benefits described in Section 4 below (the “Non-Released Rights”), the
payments and performances described in this Agreement are all that Employee shall be entitled to receive from the Company, except
for vested qualified retirement benefits, if any, to which Employee may be entitled under the Company's ERISA plans. Except as
expressly provided herein (including with respect to the Non-Released Rights) or as required by law, the Company shall not be required
to make any payments of any kind to Employee. Employee acknowledges that May 21, 2015 was his final date of employment, and that
any non-qualified stock options or shares of common stock, whether provided for under Lumber Liquidators Holdings, Inc. Equity
Compensation Plan or otherwise, which did not vest as of May 21, 2015 are forever forfeited. Employee further agrees and acknowledges
that he shall have no right or claim to any bonus payment from the Company including, but not limited to, any bonus under the LL’s
Annual Bonus Plan for Executive Management, nor any right or claim to any additional severance payment under his Executive Employment
Agreement or otherwise. Notwithstanding the termination, expiration or nonrenewal of this Agreement, the parties shall be required
to carry out any provisions of this Agreement that contemplate performance by them after such termination, expiration or nonrenewal,
expressly including Sections 5 and 7-9.

 

    	 	2	 

     

    

 

4.          General
Release. Other than with respect to the Non-Released Rights set out below, Employee hereby knowingly and voluntarily releases
and forever discharges the Company, any related companies, and the former and current employees, officers, agents, directors, shareholders,
investors, attorneys, affiliates, successors and assigns of any of them (the “Released Parties”) from all liabilities,
claims, demands, rights of action or causes of action Employee had, has or may have against any of the Released Parties, including
but not limited to, any claims or demands based upon or relating to Employee’s employment with the Company, the Executive
Employment Agreement, or the cessation of Employee’s employment with the Company. This complete release includes, but is
not limited to, a release of any rights or claims Employee may have under the Age Discrimination in Employment Act of 1967, Title
VII of the Civil Rights Act of 1964, the Equal Pay Act, the Americans with Disabilities Act, the Family and Medical Leave Act,
or any other federal, state or local laws or regulations prohibiting employment discrimination. This also includes, but is not
limited to, a release by Employee of any claims for wrongful discharge, breach of contract, defamation, or any other statutory,
common law, tort, contract, or negligence claim that Employee had, has or may have against any of the Released Parties. This release
covers both claims that Employee knows about and those claims Employee may not know about. Employee further acknowledges that Employee
has received compensation for all hours worked in accordance with applicable state and federal laws.

 

Notwithstanding the above, this release does not include a release
of (i) Employee’s right, if any, to payment of vested qualified retirement benefits under the Company’s ERISA plans;
(ii) Employee’s right, if any, to benefits under the Company’s health, dental and vision insurance plans that arose
or vested on or before the Separation Date; (iii) the right, if any, to continuation in the Company’s medical plans as provided
by COBRA; (iv) Employee’s right, if any, to indemnification and/or advancement of expenses
(including attorney’s fees) in accordance with any applicable Company Bylaws or the DGLC; (v) Employee’s right, if
any, to coverage under directors’ and officers’ liability insurance policy or policies of the Company and its subsidiaries
and affiliates; or (vi) Employee’s rights under this Agreement. Nothing in this Section 4, nor any other provision of this
Agreement, waives or affects Employee’s right to file a charge of discrimination with the Equal Employment Opportunity Commission
(“EEOC”) or to provide information to, or participate as a witness in, an investigation undertaken or a proceeding
initiated by the EEOC. However, Employee waives Employee’s right to monetary or other recovery, including attorney’s
fees, should Employee or any federal, state or local administrative agency pursue any EEOC claims on Employee’s behalf arising
out of Employee’s employment or the conclusion of his employment with the Company.

 

Notwithstanding the foregoing, the parties agree that nothing
in this Agreement shall be construed to prohibit the exercise of any rights by either party that such party may not waive as a
matter of law.

 

5.          No
Future Lawsuits. To the fullest extent allowed by law, Employee promises never to file a lawsuit asserting any claims that
are released in Section 4. In the event Employee breaches this Section 5, Employee shall pay to the Company all of its expenses
incurred as a result of such breach, including but not limited to, reasonable attorney’s fees and expenses. Notwithstanding
the foregoing, this Agreement does not waive or release any rights or claims that Employee may have under the Age Discrimination
in Employment Act which arise after the date that Employee signs this Agreement. Further, the parties acknowledge and agree that
this Agreement and this Section 5 shall not be construed to prohibit the exercise of any rights by Employee that Employee may not
waive or forego as a matter of law.

 

    	 	3	 

     

    

 

6.          Disclaimer
of Liability. This Agreement and the payments and performances hereunder are made solely to assist Employee in making the transition
from employment with Company, and are not and shall not be construed to be an admission of liability, an admission of the truth
of any fact, or a declaration against interest on the part of Company.

 

7.          Confidentiality.
Employee shall not disclose or use at any time for a period of ten (10) years after the Separation Date, or as otherwise protected
by applicable law including the Virginia Uniform Trade Secrets Act, whichever is longer, any Confidential Information (as defined
below) of which Employee is aware, whether or not such information was developed by him, except to the extent that such disclosure
or use is directly related to and required by this Agreement or is required to be disclosed by law, court order, or similar compulsion
or (ii) as is necessary for Employee to defend himself in any matters, lawsuits, investigation and inquiries arising out of his
employment as an officer of the Company or his position as a director on the Company’s Board of Directors (“Relevant
Claims”); provided, however, that such disclosure shall be limited to the extent so required or compelled; and provided,
further, that Employee shall give the Company notice of such disclosure and cooperate with the Company in seeking suitable protection.
Employee shall take reasonable and appropriate steps to safeguard Confidential Information and to protect it against disclosure,
misuse, espionage, loss and theft. Employee acknowledges and agrees that all Confidential Information, which Employee had access
to, received or generated in the course of providing, directly or indirectly, services to the Company, is the sole property of
the Company and shall be returned to the Company at the conclusion of all proceedings relating to Relevant Claims. Employee will
allow the Company access all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data
(and copies thereof regardless of the form thereof, including electronic and tangible copies) that constitute Confidential Information
(as defined below) of the Company which Employee possesses or has under his control and provide copies to the Company of any such
Confidential Information as the Company requests; provided that, while Employee will – consistent with Section 9 below –
work cooperatively with the Company with respect to Relevant Claims and share materials and information Employee and his counsel
have generated as Employee and his counsel deem appropriate, nothing in this Agreement (including in Sections 7 and 9) shall require
Employee or his counsel to share any such material or information with the Company to the extent it is covered by attorney-client
or other privileges belonging to Employee or is attorney work product of his counsel. Notwithstanding anything herein to the contrary,
Employee may retain personal papers relating to his employment, compensation and benefits.

 

As used in this Agreement, the term “Confidential Information”
means any data or information related to the Company’s business operations and is not generally known by the public, and
that was made known to Employee or acquired by Employee in the course of his employment with the Company or directly or indirectly
providing services to the Company, including business and trade secrets and the following: (i) reports, pricing, sales manuals
and training manuals, selling, purchasing, and pricing procedures, and financing methods of the Company, together with any proprietary
techniques utilized by the Company in designing, developing, testing or marketing its products, product mix and supplier information
or in performing services for clients, customers and accounts of the Company; (ii) the business plans and financial statements,
reports and projections of the Company; (iii) research or development projects or results; (iv) identities and addresses of consultants,
customers or clients and prospective clients, or any other Confidential Information relating to or dealing with the business operations
or activities of the Company; (v) trade secrets and other intellectual property of the Company; and (vi) existing or contemplated
software, products, databases, services, technology, designs, processes and research or product developments of the Company. Notwithstanding
the foregoing or any other provision herein, Confidential Information shall not include any information that (A) is generally known
to the public at the time of disclosure or becomes generally known through no wrongful act on the part of Employee, (B) becomes
known to Employee through disclosure by independent third-party sources having a legal right to disclose such information, or (C)
is independently developed by Employee without reference to Confidential Information.

 

    	 	4	 

     

    

 

Nothing in this Section 7 or in any other provision of this
Agreement prohibits Employee or Company from reporting possible violations of federal law or regulation to any governmental agency
or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any
agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal or state
law or regulation. Employee does not need the prior authorization of the Company to make any such reports or disclosures and Employee
is not required to notify the Company that he has made such reports or disclosures.

 

8.          Restrictive
Covenants. Employee acknowledges that, in the course of his employment with the Company, he has
become familiar with the Company’s trade secrets and other Confidential Information and that his services have been of special,
unique and extraordinary value to the Company. Therefore, notwithstanding anything else in this agreement to the contrary, Employee
hereby covenants and agrees to abide by the terms and conditions of the restrictive covenants contained in his Executive Employment
Agreement, including, without limitation, the restrictions and covenants contained in Article III of the Executive Employment Agreement.

 

Employee understands that these restrictions will not limit
his ability to earn a livelihood and that he has received and will receive sufficient consideration and other benefits
as an employee of the Company and as otherwise provided hereunder to clearly justify such restrictions (given his education,
skills and ability). Employee further understands that (i) the Company would not have consummated this Agreement but for the covenants
contained in this Section 8 and (ii) the provisions of Sections 7 and 8 are reasonable and necessary to preserve the business of
the Company.

 

Employee shall inform any prospective employer of these restrictions
during any period when such restrictions remain effective and provide such employer with a copy of such restrictions prior to the
commencement of that employment.

 

    	 	5	 

     

    

  

9.          Cooperation. Subject
to the proviso in Section 7 regarding material or information covered by attorney-client or other privileges belonging to Employee
or attorney work product of his counsel, Employee agrees that for a period of ten (10) years following the Separation Date, Employee
shall have a continuing duty to fully and promptly cooperate with the Company and its legal counsel by providing any and all requested
information and assistance concerning any legal or business matters that in any way relate to Employee’s actions or responsibilities
as an employee of the Company, or to the period during Employee’s employment with the Company. Such cooperation shall include
but not be limited to truthfully and in a timely manner participating and consulting concerning facts, responding to questions,
providing pertinent information, providing affidavits and statements, preparing for and attending depositions, and preparing for
and attending trials, hearings and other proceedings. Such cooperation shall include meeting with representatives of the Company
upon reasonable notice at reasonable times and locations. The Company shall use its reasonable efforts to coordinate with Employee
the time and place at which Employee's reasonable cooperation shall be provided with the goal of minimizing the impact of such
reasonable cooperation on any other material pre-scheduled business commitment that Employee may have. The coordination and communication
from the Company to the Employee regarding Employee’s cooperation shall come through the Company’s chief legal counsel
or designee thereof. The Company shall reimburse Employee for reasonable out-of-pocket expenses incurred by Employee in compliance
with this Section, including any reasonable travel expenses incurred by Employee in providing such assistance. At no time subsequent
to the Separation Date shall Employee be deemed to be a contractor or employee of the Company.

 

The Company agrees to provide Employee and his counsel with
electronic copies of documents in the Company’s possession and control that Employee needs to defend himself regarding Relevant
Claims, including, but not limited to, all documents produced by the Company to either the Securities and Exchange Commission or
the Department of Justice.

 

The Company will provide Employee with a letter in the form
attached as Exhibit B.

 

10.         Enforcement.
Employee agrees that the Company has a legitimate business interest to protect justifying the covenants set forth in Sections
7-9. Such legitimate business interests include: (i) trade secrets, (ii) valuable Confidential Information that does not otherwise
qualify as a trade secret, (iii) substantial relationships with prospective or existing Customers, (iv) Customer goodwill, and
(v) preservation of the brands with which Employee has operated. For purposes of the Company obtaining specific performance and/or
injunctive relief, Employee acknowledges that irreparable injuries shall be presumed in the event that Employee violates his covenants
herein contained. Because the Employee’s services are unique and because the Employee has access to Confidential Information,
the parties hereto agree that money damages would be an inadequate remedy for any breach of this Agreement. Therefore, in the event
of a breach or threatened breach of Sections 7-9 of this Agreement, the Company and its successors or assigns may, in addition
to other rights and remedies existing in their favor under this Agreement, at law or in equity, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in order to enforce, or prevent any violations of, the
provisions in Sections 7-9 hereof. In addition to the foregoing, if any action should have to be brought by the Company against
the Employee to enforce the provisions of this Agreement, the Employee recognizes, acknowledges and agrees that the Company may
be entitled (without limitation) to (a) preliminary and permanent injunctive relief restraining the Employee from unauthorized
disclosure or use of any trade secret or Confidential Information, in whole or in part, or otherwise violating any of the restrictive
covenants set forth herein, and (b) actual damages. Nothing in this Agreement shall be construed as prohibiting the Company from
pursuing any other legal or equity remedies available for breach or threatened breach to the provisions of this Agreement, which
may otherwise be available. In the event of an alleged breach or violation by the Employee of Sections 7-9 of this Agreement, the
parties agree that the court, in its discretion, may toll the Restricted Period during the period of the breach.

 

    	 	6	 

     

    

  

11.         Claim
for Reinstatement. Employee agrees to waive and abandon any claim to reinstatement with Company.

 

12.         Period
for Review and Consideration of Agreement. Employee understands that Employee has been given a period of twenty one (21)
days to review and consider this Agreement before signing it. Employee further understands that Employee may use as much of this
21-day period as Employee wishes prior to signing.

 

13.         Employee’s
Right to Revoke Agreement. Employee may revoke this Agreement within seven (7) days of Employee’s signing
it. Revocation can be made by delivering a written notice of revocation to Sandra Whitehouse, Senior Vice President, Human Resources,
3000 John Deere Road, Toano, Virginia 23168. For this revocation to be effective, written notice must be received by Ms. Whitehouse
no later than the close of business on the seventh day after Employee signs this Agreement. If Employee has not revoked the Agreement,
the eighth (8th) day after Employee signs this Agreement shall be the Effective Date for purposes of this Agreement.

 

14.         Encouragement
to Consult with Attorney. Employee is encouraged to consult with an attorney before signing this Agreement.

 

15.         Execution
of Documents. Each of the parties hereto shall execute any and all further documents and perform any and all further acts reasonably
necessary or useful in carrying out the provisions of this Agreement.

 

16.         Invalid
Provisions. The invalidity or unenforceability of any particular provision of this Agreement shall not affect the validity
or enforceability of any other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable
provision were omitted.

 

17.         Acknowledgment.
Employee acknowledges that Employee has signed this Agreement freely and voluntarily without duress of any kind. Employee has
conferred with an attorney or has knowingly and voluntarily chosen not to confer with an attorney about the Agreement.

 

18.         Entire
Agreement. This Agreement contains the entire understanding of the parties concerning the separation benefits being provided
to Employee herein. This Agreement may not be modified or supplemented except by a subsequent written agreement signed by all parties.

 

19.         Successorship.
It is the intention of the parties that the provisions hereof are binding upon, and inure to the benefit of, the parties, their
employees, affiliates, agents, heirs, estates, successors and assigns forever.

 

    	 	7	 

     

    

 

20.         Governing
Law. This Agreement shall be governed by the laws of the Commonwealth of Virginia, without regard to its conflict of laws principles.

 

21.         Arbitration
of Disputes. Except as to a request for an injunction or similar equitable relief as provided in Section 10, the parties agree
that any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be fully and finally settled
by arbitration administered by Judge Daniel Weinstein of JAMs, and a judgment on the award rendered by Judge Weinstein may be entered
in any court having jurisdiction thereof. The place of arbitration shall be the City of New York, New York. Except as may be required
by law, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without
the prior written consent of both parties. Provided, however, that prior to initiating arbitration under this section,
the Parties agree to provide no fewer than thirty (30) days advance notice to the other party and, during such notice period, the
Parties agree to engage in a good faith effort to resolve the applicable dispute(s) between them in good faith negotiations.

 

EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS
READ THIS AGREEMENT, UNDERSTANDS IT, AND IS VOLUNTARILY ENTERING INTO IT. PLEASE READ THIS AGREEMENT CAREFULLY. IT CONTAINS A RELEASE
OF ALL KNOWN AND UNKNOWN CLAIMS.

 

[SIGNATURE PAGE FOLLOWS]

 

    	 	8	 

     

    

  

IN WITNESS WHEREOF, the parties have freely
and voluntarily executed this Agreement in a manner so as to be binding on the dates stated below.

 

	 	 	EMPLOYEE
	 	 	 
	May 18, 2016	 	/s/ Robert Martin Lynch
	Date	 	Robert Martin Lynch
	 	 	 
	 	 	LUMBER LIQUIDATORS HOLDINGS, INC.
	 	 	 
	May 18, 2016	 	By:	/s/ John M. Presley
	Date	 	 
	 	 	Its:	President and CEO

 

    	 	9	 

     

    

EXHIBIT A

 

 
 EXECUTIVE EMPLOYMENT AGREEMENT 
 This EXECUTIVE
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as of this 17th day of December, 2010, by and between Lumber Liquidators Holdings, Inc. and Robert Martin Lynch
(“Employee”). Hereinafter, Lumber Liquidators Holdings, Inc. and its subsidiaries shall collectively be referred to as “Lumber Liquidators” or the “Company”, unless the context otherwise requires.

 WHEREAS, the Company is primarily engaged in the business of the production and retail sale of hardwood, laminate,
engineered, bamboo, cork and resilient flooring and related products; 
 WHEREAS, the Company maintains its corporate
headquarters in Toano, Virginia, and operates retail locations throughout the United States and Canada; 
 WHEREAS,
Employee has certain valuable experience and expertise in matters related to the management of enterprises similar to the Company’s business; and 
 WHEREAS, the Company desires to employ Employee and Employee desires to be employed by the Company under the terms and conditions set forth below. 

NOW, THEREFORE, for and in consideration of the promises and undertakings of the parties as hereinafter set forth, the parties
covenant and agree as follows: 
 ARTICLE I 
 EMPLOYMENT 
 1.1. Employment. 

(a) The Company will employ Employee in the position of President and Chief Operating Officer and, in that position, Employee will report
directly to the Chief Executive Officer. The Company retains the right to make reasonable changes in Employee’s duties and reporting relationships as may be determined by the Company. 

(b) This Agreement, and Employee’s employment hereunder, is conditioned upon (i) Employee’s successful completion of a
drug screen in compliance with state and federal law and as more fully set forth in the Company’s policies, (ii) Employee’s successful completion of a background screen, to be completed in compliance with applicable state and federal
law, and (iii) Employee’s ability to satisfactorily comply with the I-9 requirements set forth by the Immigration Reform and Control Act of 1986. 
 1.2. Term. Employee’s employment with the Company shall begin on January 17, 2011 (“Commencement Date”) and shall continue for a period of five (5) years from
such date, unless it is terminated earlier in accordance with Article II of this Agreement. The term of this Agreement may be extended upon written agreement by Employee and a designated representative of the Company’s Board of Directors.
Notwithstanding the termination of this Agreement for whatever reason, the parties shall be required to carry out any provisions of this Agreement which contemplate performance by them subsequent to such termination. 

 1.3. Duties. In the position of President and Chief Operating Officer,
Employee will be a key employee of the Company and will be involved in the Company’s strategic planning. In his executive capacity with the Company, Employee shall: 

(a) Report to the Chief Executive Officer and/or the Board of Directors. 

(b) Diligently perform the duties and exercise the powers and functions which from time to time may reasonably be required of, assigned
to, or vested in Employee by the Company, the Chief Executive Officer and/or the Board of Directors. The Company shall have the sole authority and discretion to set and establish the reasonable work schedules, duties, and standards applicable to
Employee. 
 (c) Comply with all policies, standards and rules of the Company now or hereafter promulgated. 

(d) During working hours, devote the whole of Employee’s time, attention and ability to Employee’s duties hereunder at such
place or places as the Company shall from time to time reasonably determine. It is expected that Employee will relocate to the Williamsburg/Richmond, Virginia area 
 (e) Employee shall not, during the term hereof, directly or indirectly, engage or associate with, or become employed with, as an employee, consultant, or otherwise, any other business without the prior
written approval of the Board of Directors of the Company. 
 (f) Well and faithfully serve the Company to the best of
Employee’s abilities, and at all times use Employee’s best efforts to promote, develop, and extend the interests of the Company. 
 1.4. Compensation. 
 (a) Base Salary. Employee shall receive
an annual base salary of $500,000 payable to Employee in accordance with the Company’s normal payroll schedule. The Company shall withhold state and federal income taxes, social security taxes and shall make such other payroll deductions as may
be required by law or mutually agreed upon in writing by Employee and the Company. On or about March 2012, Employee’s base salary will increase to $550,000 per annum subject to Employee’s satisfactory performance as determined by the
Company. 
 (b) Signing Bonus. After Employee begins employment with the Company, the Company shall pay to Employee a
gross signing bonus of $60,000 as soon as administratively possible. The Company shall withhold state and federal income taxes, social security taxes and shall make such other payroll deductions as may be required by law or mutually agreed upon in
writing by Employee and the Company. 

  
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 (c) Incentive Bonus Plan. Effective on the Commencement Date, Employee will be
eligible to participate in the Company’s Annual Bonus Plan for Executive Management (the “Bonus Plan”). Under the terms of the Bonus Plan as approved by the Compensation Committee of the Company’s Board of Directors (the
“Compensation Committee”), Employee will be eligible to receive a yearly bonus in an amount up to 75% of Employee’s base salary. Of that target bonus amount, 75% will be based upon Lumber Liquidators’ performance as a
company and the remaining 25% will be based upon goals and objectives specific to Employee’s position, each as defined by the Compensation Committee. The awarding (or decision not to award) a bonus and the amount thereof is a decision left to
the sole discretion of Lumber Liquidators and the Compensation Committee. The Bonus Plan is subject to amendment, modification or termination, with or without notice, in the Company’s sole discretion. All compensation payments, bonus payments,
and benefits provided to Employee shall be subject to all applicable withholding and deductions. 
 (d) Relocation
Expenses. Employee’s relocation expenses shall be covered in accordance with the Company’s Relocation Policy, a copy of which has been provided to Employee. 
 (e) Benefits. Employee shall be entitled to participate in or become a participant in any employee benefit plan and fringe benefits maintained by the Company for which Employee is or will become
eligible on such terms as the Company, in its discretion, may uniformly establish, maintain, modify or otherwise change for executive level employees. The uniformly applied benefits plans and fringe benefits contemplated hereby may be amended,
enlarged, or diminished by the Company at any time in the Company’s discretion. 
 (f) Paid Time Off. Employee will
be provided twenty (20) days of paid time off (“PTO”) per year beginning on the Commencement Date. PTO includes sick and vacation time but not holidays. Unused PTO will not be carried over to subsequent years. 

(g) Holidays. Lumber Liquidators observes six (6) scheduled holidays each year. Those holidays currently are New Year’s
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The holiday schedule is established in advance of each year and is subject to change. 
 (h) Severance Payment and Separation Benefits. Should Employee’s employment be involuntarily terminated by Company for any reason other than “for cause”
(as defined in Section 2.3(a)), Employee shall be entitled to the following: 
  

	 	i.	 One (1) year of Employee’s base salary payable in twelve (12) equal monthly installments commencing on the 60th day following termination of employment; and

  

	 	ii.	 If, after the date of the termination of Employee’s employment with the Company, Employee elects to continue and maintains health, vision and
dental insurance through COBRA continuation coverage, Company agrees to pay to the Employee for a period of twelve (12) months following the date of termination, an amount

  
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equal to the portion of the premium for such insurance that Company would have paid had Employee maintained such insurance prior to the date of his termination. Employee shall be responsible for
paying the entire premium.

 Employee acknowledges and understands that the amounts set forth in this Section 1.4(h) are
taxable income to Employee for which Employee is responsible. To the extent required because Employee is a “specified employee” as determined under Section 409A of the Internal Revenue Code of 1986, as amended, and Treasury
Regulations thereunder (“Section 409A”) as of the date of Employee’s termination of employment, any payments or benefits provided under this Section 1.4(h) shall commence on the first day of the month following the
six-month anniversary of Employee’s termination of employment, with installments that would have been paid during such six-month delay included in the first payment. The making of any severance payments or the providing of any benefits as set
forth in this Section 1.4(h) is strictly conditioned upon (a) the Employee executing a release of the Company, its subsidiaries and affiliates, its officers, directors and employees, and its and their respective successors within the 60
day period commencing on Employee’s termination of employment and (b) Employee’s continued compliance with the provisions of Article III. “Termination of employment” under this Agreement shall be determined in a manner
consistent with the definition of separation from service under Section 409A. 
 1.5. Stock Options, Restricted
Stock. In addition to the compensation described in Section 1.4 above, the Board of Directors or a committee thereof shall grant to Employee as of the Commencement Date the following stock options and stock awards pursuant and subject
to the terms, limitations and conditions of the Lumber Liquidators Holdings, Inc. 2007 Equity Compensation Plan and agreements that will be substantially similar to the forms of agreement used in connection with prior grants of stock options and
restricted stock awards to the Company’s executive officers (except as specifically described below): 
 (a) A whole number
of non-qualified stock options with a cumulative value of approximately $4,400,000, subject to adjustment as set forth below, determined by using the Black-Scholes-Merton method as of the Commencement Date (the “Option Shares”). The Option
Shares shall vest in accordance with the following schedule: 
  

			
	 Percentage of Option
 Shares Exercisable
	 	 Vesting Date

		
	 20%
	 	First Anniversary of Commencement Date
	 20%
	 	Second Anniversary of Commencement Date
	 20%
	 	Third Anniversary of Commencement Date
	 20%
	 	Fourth Anniversary of Commencement Date
	 20%
	 	Fifth Anniversary of Commencement Date

  
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 (b) A whole number of shares of common stock with a cumulative value of approximately
$330,000 as of the date of the Commencement Date (the “Stock Shares”). The Stock Shares shall vest in accordance with the following schedule: 
  

			
	 Percentage of Stock
 Shares Exercisable
	 	 Vesting Date

		
	 33.3%
	 	Commencement Date
	 33.3%
	 	Six Months After Commencement Date
	 33.3%
	 	Twelve Months After Commencement Date

 If Employee ceases to be employed by the Company for any reason, any of the Option Shares or Stock Shares that are not yet vested will be forfeited. In addition, the Lumber Liquidators Holdings, Inc. 2007
Equity Compensation Plan limits the aggregate number of awards that may be granted to any one individual during a plan year to awards covering no more than 400,000 shares of common stock. In the event the aggregate number of stock options and stock
awards to be granted pursuant to this Section 1.5 would exceed this limitation, the number of stock options granted pursuant to Section 1.5(a) will be reduced to the extent necessary to comply with this limitation. Any such reduction will
be made on a pro rata basis such that the percentage of stock options vesting at a given time is consistent with the percentages set forth above. 
 1.6. Reimbursement of Business Expenses. The Company shall reimburse Employee for all normal and customary business expenses reasonably incurred during the term of this Agreement by Employee
in the proper performance of his duties under this Agreement, consistent with written Company policy. With respect to reimbursement, Employee shall comply with the Company’s policies regarding documentation and submittal of expenses incurred.

 1.7. Cessation of Compensation. Except as provided by Sections 2.3(b), 2.4(b) and 2.4(c) of this Agreement, all
compensation and benefits provided Employee under this Agreement will stop on the date of the cessation of the Employee’s employment hereunder, except where Employee is eligible for continuation of such benefits as specified by federal laws or
laws of the Commonwealth of Virginia, including continuation of group health insurance benefits pursuant to the terms of the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”). 

ARTICLE II 

TERMINATION 
 2.1. Illness and Incapacity. If, during the term of Employee’s employment, Employee is prevented, in the Company’s reasonable judgment, from effectively performing any essential
part of his duties under this Agreement for a period in excess of 90 consecutive days (or more than 120 days during any period of 365 calendar days) by reason of illness, disability, or any other reason, the Company, by written notice to Employee,
may terminate Employee’s employment. Upon delivery to Employee of such notice, Employee’s employment and all obligations of the Company 

  
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under Article I will terminate, other than with respect to Employee’s entitlement to (a) any earned but unpaid salary and accrued but unused PTO, and (b) any benefits for which he
is then eligible. The obligations of Employee under Article III of this Agreement will continue notwithstanding the cessation of Employee’s employment pursuant to this Section. 

2.2. Death. The Agreement and the parties’ obligations hereunder shall terminate upon the death of Employee; provided,
however, that in such event, the parties shall be required to carry out any provisions of this Agreement which contemplate performance by them subsequent to termination, and the Company shall pay to the estate of the Employee any earned but unpaid
salary and accrued but unused PTO as of the date of Employee’s death. 
 2.3. Termination by the Company.
Employee’s employment under this Agreement may be terminated by the Company with or without cause as set forth hereunder. 

(a) The Company shall have the right to terminate Employee’s employment under this Agreement at any time for Cause,
which termination shall be effective immediately. For purposes of this Agreement, “Cause” shall include: 
  

	 	i.	Unauthorized use or disclosure of the Company’s confidential information or trade secrets; 

 

	 	ii.	Material breach of any agreement between Employee and the Company, including this Agreement, which such breach is not cured within ten (10) days after
Employee’s receipt of prior written notice thereof from the Company; 

  

	 	iii.	Material failure to comply with the Company’s policies or rules, which such failure is not cured within ten (10) days after Employee’s receipt of prior
written notice thereof from the Company; 

  

	 	iv.	Conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any state thereof, or any crime of moral
turpitude; 

  

	 	v.	Intentional failure to perform Employee’s duties or refusal to abide by or comply with the lawful directives of the Company; 

 

	 	vi.	Willful dishonesty, fraud, misconduct, or gross negligence with respect to the business or affairs of the Company that, in the reasonable judgment of the Company,
materially and adversely affects the operations or reputation of the Company; and 

  

	 	vii.	 Failure of the Company to meet financial performance measurements set by the Company’s Board of Directors; provided, however, that such failure
shall not constitute grounds for termination of Employee’s employment by the Company for “Cause” hereunder if such failure is the 

  
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result of (A) events, occurrences or circumstances affecting the economy or financial markets in general, or (B) other events, occurrences or circumstances which Employee cannot
control. 

 (b) Employee’s employment hereunder may also be terminated without Cause by the Company upon
thirty (30) days written notice to the Employee. In the event Employee’s employment under this Agreement is terminated by the Company without Cause, Employee shall be entitled to: 

 

	 	i.	Any earned but unpaid salary and accrued but unused PTO as of the date of termination; and 

 

	 	ii.	The applicable severance payment as set forth in Section 1.4(h), provided Employee complies with Section 1.4(h) and subject to the payment conditions set
forth therein. 

 (c) Any provision to the contrary notwithstanding, with respect to Section 2.3(a), the ten
(10) day corrective periods therein referenced shall only apply to matters readily correctable within a ten (10) day period, and such correction period shall be reasonably extended beyond ten (10) days for all other deficiencies so as
to allow a reasonable period for corrective action in reference to the specifically-identified deficiency. 
 2.4.
Termination by Employee. 
 (a) Employee may terminate his employment hereunder by providing the Company with sixty
(60) days written notice of his intention to resign. Without converting such termination to a termination by the Company without Cause or reason (as noted in Section 2.3(b), the Company may provide Employee with Employee’s salary in
an amount equivalent to that due over the applicable notice period in lieu of allowing the Employee to continue his employment throughout the required notice period. In such case, the effective date of Employee’s termination shall be the date
that the Company makes such payment to Employee. If Employee terminates his employment under this Section, he shall have no right to receive any further compensation or benefits (including severance payments or payments under the applicable Bonus
Plan), if any, under this Agreement after the effective date of the termination of his employment. 
 (b) Upon occurrence of a
Change of Control and a resulting material reduction in either Employee’s compensation or job responsibilities, Employee may, within sixty (60) days of the Change of Control, elect to terminate his employment. In such instance, provided
that Employee declares his intent in writing to the Company to terminate his employment within sixty (60) days of the Change of Control, Employee shall be entitled to the compensation package set forth in Section 2.3(b). For purposes of
this Section 2.4(b) the term “Change of Control” shall have the meaning ascribed to such term in the Lumber Liquidators Holdings, Inc. 2007 Equity Compensation Plan. 

  
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 (c) Employee shall have the right to terminate employment under this Agreement at any time
upon thirty (30) days written notice to the Company after a Good Reason Event. For purposes of this Agreement, a “Good Reason Event” shall include (i) failure to pay or provide, or a material reduction in, Employee’s
compensation or Employee’s benefits, (ii) a material reduction in Employee’s responsibilities within the Company, or (iii) a material breach of this Agreement by the Company which is not cured within ten (10) days after the
Company’s receipt of prior written notice thereof from Employee, or such other period as is reasonable for a curative response. In the event that Employee terminates this Agreement in connection with a Good Reason Event, Employee shall be
entitled to the compensation package set forth in Section 2.3(b). 
 2.5. Continuation of Obligations.
Regardless of how Employee’s employment with the Company ends, the obligations of Employee under Article III of this Agreement shall continue notwithstanding the cessation of Employee’s employment. In addition, no cessation of the
Employee’s employment with the Company shall affect any liability or other obligation of Employee that shall have accrued prior to such termination, including, but not limited to, any liability, loss or damage on account of breach of this
Agreement. 
 ARTICLE III 
 EMPLOYEE’S COVENANTS AND AGREEMENTS 
 3.1. Proprietary
Rights. All rights, including without limitation any writing, discoveries, inventions, innovations, and computer programs and related documentation and all intellectual property rights therein, including without limitation copyright
(collectively “Intellectual Property”) created, designed or constructed by Employee during the Employee’s term of employment with the Company, that are related in any way to Employee’s work with the Company or to any of
the products and/or services provided by the Company, shall be the sole and exclusive property of the Company. Employee agrees to deliver and assign to the Company all such Intellectual Property and all rights which Employee may have therein and
Employee agrees to execute all documents, including without limitation patent applications, and make all arrangements necessary to further document such ownership and/or assignment and to take whatever other steps may be needed to give the Company
the full benefit thereof. Employee further agrees that if the Company is unable after reasonable effort to secure the signature of Employee on any such documents, the Chief Executive Officer of the Company or a designee thereof shall be entitled to
execute any such papers as the agent and attorney-in-fact of Employee and Employee hereby irrevocably designates and appoints each such person as Employee’s agent and attorney-in-fact to execute any such papers on Employee’s behalf and to
take any and all actions required or authorized by the Company pursuant to this subsection. Without limitation to the foregoing, Employee specifically agrees that all copyrightable materials generated during the term of Employee’s employment
with the Company, including but not limited to, computer programs and related documentation, that are related in any way to Employee’s work with the Company or to any of the services provided by the Company, shall be considered works made for
hire under the copyright laws of the United States and shall upon creation be owned exclusively by the Company. To the extent that any such materials, under applicable law, may not be considered works made for hire, Employee hereby assigns to the
Company the ownership of all copyrights in such materials, without the necessity of any further consideration, and the Company shall be entitled to register and hold in its own name all copyrights in respect of such materials. The provisions of this
section shall apply regardless of whether any activities related to the creation of any Intellectual Property took place inside or outside of the Company’s working hours. 

  
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 3.2. Confidential Information. Employee understands and agrees that:

 (a) in the course of his employment with the Company, he will acquire information that could include, in whole or in part,
information concerning Company sales, sales volume, sales methods, sales proposals, customers and prospective customers, identity of customers and prospective customers, identity of key purchasing personnel in the employ of customers and prospective
customers, amount or kind of customer purchases from the Company, Company sources of supply, Company computer programs, system documentation, special hardware, product hardware, related software development, Company manuals, formulae, processes,
methods, machines, compositions, ideas, improvements, inventions, or other confidential or proprietary information belonging to the Company or relating to the Company’s affairs (collectively referred to as “Confidential
Information”); 
 (b) the Confidential Information is the property of the Company; 

(c) the use, misappropriation, or disclosure of the Confidential Information would constitute a breach of trust and could cause
irreparable injury to the Company; 
 (d) it is essential to the protection of the Company’s goodwill and to the
maintenance of the Company’s competitive position that the Confidential Information be kept secret; and 
 (e) that
Employee will not disclose the Confidential Information to others or use the Confidential Information for any reason other than on behalf of the Company, either during, or at any time following the cessation of, Employee’s employment with the
Company. Notwithstanding anything to the contrary contained herein, Confidential Information shall not be deemed to include any information generally known or readily accessible in the trade or industry in which the Company is involved, provided the
same are not in the public domain as a consequence of disclosure by the Employee in violation of this Agreement. 
 3.3.
Return of Materials. Upon the cessation, for any reason, of Employee’s employment with the Company, Employee will promptly deliver to the Company all Company property, including but not limited to, all computers, phones, equipment,
correspondence, manuals, letters, notes, notebooks, reports, flow charts, programs, proposals, and any documents concerning the Company’s customers, operations, products or processes (actual or prospective) or concerning any other aspect of the
Company’s business (actual or prospective) and, without limiting the foregoing, will promptly deliver to the Company any and all other documents or materials containing or constituting Confidential Information. 

3.4. Non-Solicitation. Throughout any period during which Employee is an employee of the Company, and for a period of
twenty-four (24) months from and after the date upon which Employee shall cease for any reason whatsoever to be an employee of the Company (the “Employment Cessation Date”) or for a period of twenty-four (24) months from
the date of entry by 

  
 9 

 
a court of competent jurisdiction of a final judgment enforcing this Section of the Agreement in the event of a breach thereof by Employee, whichever is later, Employee covenants and agrees that
Employee will not directly or indirectly, for himself or for the benefit of another: 
 (a) Solicit any person or entity who,
during the twelve-month period immediately preceding the Employment Cessation Date, paid or engaged the Company for products or services of any type or who received the benefit of the Company’s services (a “Client”) to
withdraw, curtail or cancel such Client’s relationship with the Company; 
 (b) Provide or agree to provide for any Client
products or services of the type that the Company renders to its Clients, except for or on behalf of the Company in the exercise of Employee’s duties under this Agreement; or 

(c) Induce or influence, or attempt to induce or influence, any person who, during the twelve-month period immediately preceding the
Employment Cessation Date, is an employee, agent, independent contractor, partner, officer, supplier, vendor or director of the Company to terminate his, her or its relationship with the Company or cease providing services or products to or on
behalf of the Company. 
 3.5. Non-Competition.  

(a) Throughout any period during which Employee is an employee of the Company, and for a period of twenty-four (24) months from and
after the Employment Cessation Date or for a period of twenty-four (24) months from the date of entry by a court of competent jurisdiction of a final judgment enforcing this Section of the Agreement in the event of a breach thereof by Employee,
whichever is later, Employee covenants and agrees that: 
  

	 	i.	Employee will not compete with Company within the Restricted Area by performing for or providing to a Competing Business the same or materially similar duties or
services that Employee performed for or provided to Company within the last 12 months of Employee’s employment with the Company; 

  

	 	ii.	Employee will not own or acquire, either as a proprietor, partner, member, shareholder, trustee, a greater than five percent (5%) equity or synthetic equity
ownership interest, in any Competing Business within the Restricted Area. 

 (b) For purposes of this
Section 3.5, the following definitions will apply: 
  

	 	i.	Competing Business. Any business which sells or distributes flooring products (including, but not limited to, hardwood, engineered, resilient, bamboo, cork
and/or laminate flooring) or any other products or services substantially similar to those sold or provided by the Company within the twelve-month period immediately preceding the Employment Cessation Date that constituted more than five percent
(5%) of the Company’s gross sales. 

  
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	 	ii.	Restricted Area. Because of the national and expanding scope of the Company’s business, for purposes of this Agreement, the “Restricted Area” is
defined as the United States of America and any city, town, county or metropolitan area in Canada in which the Company operates store locations as of the Employment Cessation Date. 

ARTICLE IV 

EMPLOYEES REPRESENTATIONS AND WARRANTIES 
 4.1. No Prior Agreements. Employee represents and warrants that he is not a party to or otherwise subject to or bound by the terms of any contract, agreement, or understanding which in any
manner would limit or otherwise affect his ability to perform any of his obligations under this Agreement, including, without limitation, any contract, agreement, or understanding containing terms and provisions similar in any manner to those
contained in Article III. The Company shall have no liability under any such agreement between Employee and a third party. 

4.2. Employee’s Abilities. Employee represents that his experience and capabilities are such that the provisions of
Article III will not prevent him from earning a livelihood in the event his employment with the Company were to cease and Employee acknowledges that it would cause the Company serious and irreparable injury and cost if Employee were to violate
any of the provision of Article III to the detriment of the Company or to otherwise breach his obligations under Article III. 

4.3. Review by Counsel. Employee represents and warrants that this Agreement is the result of full and otherwise fair
bargaining over its terms following a full and otherwise fair opportunity to have legal counsel for Employee review this Agreement and to verify that the terms and provisions of this Agreement are reasonable and enforceable. 

ARTICLE V 

GENERAL PROVISIONS 
 5.1. Authorization to Modify Restrictions. The invalidity of any portion of this Agreement shall not be deemed to affect the validity of any other provisions. In the event that any provision
of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision. Further, if any
part on any provision of this Agreement, including Article III, shall be determined to be invalid or unenforceable by reason of the extent, duration or geographical scope thereof, or otherwise, then the parties agree that the court making such
determination may reduce such extent, duration or geographical scope, or other provisions thereof, and in its reduced form such part or provision shall then be enforceable in the manner contemplated hereby. 

  
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 5.2. No Waiver. The failure of either the Company or Employee to insist upon
the performance of any term in this Agreement shall not waive any such term or any other term of this Agreement. Instead, this Agreement shall remain in full force and effect as if no such forbearance had occurred. 

5.3. Company Violation Not a Defense. In an action by the Company for specific performance and/or injunctive relief under
this Agreement, any claims asserted by Employee against the Company as violations of this Agreement shall not constitute a defense. 
 5.4. Entire Agreement. This Agreement represents the entire agreement of the parties with respect to the subject matter of this Agreement and may be amended only by a writing signed by each
of them. 
 5.5. Governing Law, Section 409A. This Agreement will be governed by and construed in accordance
with the internal substantive laws of the Commonwealth of Virginia without regard to Virginia’s conflict of laws provisions. This Agreement is intended to comply with Section 409A and shall be interpreted and administered accordingly.

 5.6. Consent to Jurisdiction. Employee hereby irrevocably submits to the jurisdiction of the appropriate state
or federal courts located in the Commonwealth of Virginia in any action or proceeding arising out of or relating to disputes under this Agreement. 
 5.7. Venue. Employee irrevocably waives any current or future objection to the laying of venue of any action or proceeding arising out of or relating to this Agreement brought in any
Virginia state or federal court and any objection on the ground that any such action or proceeding in either court has been brought in an inconvenient forum. However, nothing in this Section 5.7 will affect the right of the Company to bring any
action or proceeding against Employee or his property in the courts of other jurisdictions. 
 5.8. Remedy.
Employee understands and acknowledges that the Company has a legitimate business interest in preventing Employee from taking any actions in violation of Article III of this Agreement and that Article III is intended to protect the legitimate
business interests and goodwill of the Company. Employee further acknowledges that a breach of Article III of this Agreement will irreparably and continually damage the Company. Employee therefore agrees that in the event Employee violates any
provision of this Agreement contained in Article III, the Company will be entitled to seek an injunction stopping Employee from breaching or continuing to breach Employee’s obligations thereunder, other appropriate injunctive relief, specific
performance, any other equitable remedies and any and all remedies provided by law. Employee further acknowledges that the Company engages in a highly competitive business throughout the United States as well as countries outside of the United
States, and further, that the geographic limitation contained in Section 3.5 is necessary to protect the Company’s business. 
 5.9. Recovery of Expenses. The prevailing party in any proceeding arising from this Agreement will be entitled to reasonable attorneys’ fees, costs, and the expenses of litigation from
the non-prevailing party. 

  
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 5.10. Agreement Binding. The obligations of Employee under this Agreement will
continue as stated in this Agreement after the cessation of his employment with the Company and will inure to the benefit of any successors and assigns of the Company. 
 5.11. Counterparts, Section Headings. This Agreement may be executed in any number of counterparts. Each will be considered an original, but all will constitute one and the same instrument.
The section headings of this Agreement are for convenience of reference only and shall not affect the construction or interpretation of any of its provisions. 
 5.12. Notices. All notices, demands, requests and other communications required by or in regards to this Agreement shall be in writing or by written telecommunication and given by personal
delivery to the addressee, by mail (certified mail, return receipt requested, postage prepaid) or by telecommunication. Either party may from time to time change its address, facsimile number, electronic mail address or designated individual by
notice to the other party. 
  

			
	To Company:	  	Lumber Liquidators Holdings, Inc.
		  	3000 John Deere Road
		  	Toano, Virginia 23168
		  	Attention: General Corporate Counsel
		
	To Employee:	  	Robert M. Lynch
		  	1143 Rugby Court
		  	San Jose, California 95120

 EMPLOYEE ACKNOWLEDGES THAT
HE HAS READ AND UNDERSTANDS THE FOREGOING PROVISIONS AND THAT SUCH PROVISIONS ARE REASONABLE AND ENFORCEABLE. 
 [SIGNATURE
PAGE FOLLOWS] 

  
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 IN WITNESS WHEREOF, the parties hereto have executed this
Executive Employment Agreement or caused it to be executed this 17th day of December, 2010. 
  

							
	EMPLOYEE	 		 	LUMBER LIQUIDATORS HOLDINGS, INC.
				
	 /s/ Robert Martin Lynch
	 		 	By:	 	 /s/ Jeffrey W. Griffiths

	Robert Martin Lynch	 		 	Name:	 	 Jeffrey W. Griffiths

		 		 	Title:	 	 Chief Executive Officer

  

 14 

  
 AMENDMENT TO 
 EXECUTIVE EMPLOYMENT AGREEMENT 

THIS AMENDMENT to the Executive Employment Agreement (the “Agreement”) by and between Lumber Liquidators Holdings, Inc. (the
“Company”) and Robert Martin Lynch (“Employee”) is made and entered into this 21st day of December, 2011. 

WHEREAS, the Compensation Committee of the Board of Directors of the Company has determined that certain changes to Employee’s
title, duties and compensation are in the best interest of the Company; and 
 WHEREAS, the Company and Employee wish to amend
the Agreement to reflect such changes. 
 NOW, THEREFORE, the Agreement is amended as set forth below, effective January 1,
2012: 
 FIRST: The first sentence of Section 1.1(a) is revised to read as follows: “The Company will employ
Employee in the position of President and Chief Executive Officer and, in that position, Employee will report directly to the Board of Directors of the Company.” 
 SECOND: The term, “Chief Operating Officer,” in the first sentence of Section 1.3 is replaced with the term, “Chief Executive Officer.” 

THIRD: The phrase, “the Chief Executive Officer and/or the Board of Directors,” in Section 1.3(a) is replaced with
the phrase, “the Board of Directors.” 
 FOURTH: The phrase, “the Company, the Chief Executive Officer
and/or the Board of Directors,” in Section 1.3(b) is replaced with the phrase, “the Company and/or the Board of Directors.” 
 FIFTH: Section 1.4(a) is replaced with the following: 

(a) Base Salary. Employee shall receive an annual base salary of $550,000 payable to Employee in accordance with
the Company’s normal payroll schedule. The Company shall withhold state and federal income taxes, social security taxes and shall make such other payroll deductions as may be required by law or mutually agreed upon in writing by Employee and
the Company. 
 SIXTH: The phrase, “up to 75% of Employee’s base salary,” in the second sentence of
Section 1.4(c) is replaced with the phrase, “up to 100% of Employee’s base salary.” 
 SEVENTH: The
term, “Chief Executive Officer,” in Section 3.1 is replaced with the term, “Secretary.” 

 EIGHTH: The notice address in Section 5.12 for Employee shall be changed to the
following: 
 IN WITNESS WHEREOF, the parties hereto have executed this Amendment to Executive Employment Agreement or caused it
to be executed as of the date first written above. 
  

							
	EMPLOYEE	 		 	LUMBER LIQUIDATORS HOLDINGS, INC.
				
	 /s/ Robert Martin Lynch
	 		 	By:	 	 /s/ Jeffrey W. Griffiths

	Robert Martin Lynch	 		 	  
 Name:
	 	 Jeffrey W. Griffiths

				
		 		 	Title:	 	 President and Chief Executive Officer

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