Non-Qualified Stock Option Agreement under the Lumber Liquidators, Inc. 2004 Stock Option and Grant Plan

Exhibit 10.07

Non-Qualified Stock Option Agreement

under the Lumber Liquidators, Inc.

2004 Stock Option and Grant Plan

As Amended and Restated Effective July 13, 2006

and As Further Amended Effective October 18, 2006

Pursuant to the Lumber Liquidators, Inc. 2004 Stock Option and Grant Plan as amended and restated effective July 13, 2006, and as further amended effective October 18, 2006 (the “Plan”), Lumber Liquidators, Inc., a Massachusetts corporation (together with all successors thereto, the “Company”), hereby grants to the Optionee, who is an officer, employee, director, consultant or other key person of the Company or any of its Subsidiaries, an option (the “Stock Option”) to purchase on or prior to the Expiration Date, or such earlier date as is specified herein, all or any part of the number of shares of Common Stock, no par value (“Common Stock”), of the Company indicated above (the “Option Shares,” and such shares once issued shall be referred to as the “Issued Shares”), at the Option Exercise Price per share, subject to the terms and conditions set forth in this Non-Qualified Stock Option Agreement (this “Agreement”) and in the Plan. This Stock Option is not intended to qualify as an “incentive stock option” as defined in Section 422(b) of the Internal Revenue Code of 1986, as amended from time to time (the “Code”).

1. Definitions . For the purposes of this Agreement, the following terms shall have the following respective meanings. All capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Plan.

An “ Affiliate ” of any Person means a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the first mentioned Person. A Person shall be deemed to control another Person if such first Person possesses directly or indirectly the power to direct, or cause the direction of, the management and policies of the second Person, whether through the ownership of voting securities, by contract or otherwise.

“ Bankruptcy ” shall mean (i) the filing of a voluntary petition under any bankruptcy or insolvency law, or a petition for the appointment of a receiver or the making of an assignment for the benefit of creditors, with respect to the Optionee or any Permitted Transferee, or (ii) the Optionee or any Permitted Transferee being subjected involuntarily to such a petition

or assignment or to an attachment or other legal or equitable interest with respect to the Optionee’s or such Permitted Transferee’s assets, which involuntary petition or assignment or attachment is not discharged within 60 days after its date, and (iii) the Optionee or any Permitted Transferee being subject to a transfer of the Stock Option or the Issued Shares by operation of law (including by divorce, even if not insolvent), except by reason of death.

“ Cause ” shall mean a vote of the Board resolving that the Optionee should be dismissed as a result of (i) the commission of any act by the Optionee constituting financial dishonesty against the Company (which act would be chargeable as a crime under applicable law); (ii) the Optionee’s engaging in any other act of dishonesty, fraud, intentional misrepresentation, moral turpitude, illegality or harassment which, as determined in good faith by the Board, would: (A) materially adversely affect the business or the reputation of the Company with its current or prospective customers, suppliers, lenders and/or other third parties with whom it does or might do business; or (B) expose the Company to a risk of civil or criminal legal damages, liabilities or penalties; (iii) the repeated failure by the Optionee to follow the directives of the Company’s chief executive officer or Board or (iv) any material misconduct, violation of the Company’s policies, or willful and deliberate non-performance of duty by the Optionee in connection with the business affairs of the Company.

“ Competition ” means participating, directly or indirectly, in a Prohibited Capacity, as a director, officer, employee, principal, agent, consultant, adviser, stockholder, owner, member or partner of any business, organization, entity, or enterprise engaged, within the Restricted Area, in the sale of (i) flooring products, including but not limited to hardwood and laminate flooring; and (ii) any other products or services substantially similar to those sold or provided by the Company and which constituted more than five percent (5%) of the Company’s gross sales during the most recent twenty-four (24) months of Optionee’s employment with the Company.

“ Good Reason ” shall mean the occurrence of any of the following events: (i) a substantial adverse change in the nature or scope of the Optionee’ s responsibilities, authorities, powers, functions or duties; (ii) a reduction in the Optionee’s annual base salary except for across-the-board salary reductions similarly affecting all or substantially all management employees; or (iii) the relocation of the offices at which the Optionee is principally employed to a location more than 50 miles from such offices.

“ Initial Public Offering ” shall mean the consummation of the first fully underwritten, firm commitment public offering pursuant to an effective registration statement under the Act (as defined herein) covering the offer and sale by the Company of its equity securities, as a result of or following which the Stock shall be publicly held.

“ Permitted Transferees ” shall mean any of the following to whom the Optionee may transfer Issued Shares hereunder (as set forth in Section 8): the Optionee’s spouse, children (natural or adopted), stepchildren or a trust for their sole benefit of which the Optionee is the settlor; provided , however , that any such trust does not require or permit distribution of any Issued Shares during the term of this Agreement unless subject to its terms. Upon the death of the Optionee (or a Permitted Transferee to whom shares have been transferred hereunder), the

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term Permitted Transferees shall also include such deceased Optionee’s (or such deceased Permitted Transferee’s) estate, executions, administrations, personal representations, heirs, legatees and distributees, as the case may be.

“ Person ” shall mean any individual, corporation, partnership (limited or general), limited liability company, limited liability partnership, association, trust, joint venture, unincorporated organization or any similar entity.

“ Prohibited Capacity ” means (i) any capacity which involves the performance of tasks or activities substantially similar to those performed by the Optionee in his or her capacity as an employee of the Company at any time within the twelve (12) months immediately prior to the cessation of his or her employment with the Company; or (ii) any capacity which involves the management or supervision of any function for which the Optionee was responsible in his or her capacity as an employee of the Company at any time within the twelve (12) months immediately prior to the cessation of his or her employment with the Company.

“ Proprietary Information ” means any information: applicable to the business of the Company or of any client, customer, or supplier of the Company, in each case which may be made known to the Optionee by the Company or by any client, customer, or supplier of the Company; or learned by the Optionee in such context during the period of Optionee’s employment with the Company, but excluding any records, data or information which are in the public domain, provided the same are not in the public domain as a consequence of unauthorized disclosure by the Optionee in violation of this Agreement. By way of illustration, but not limitation, Proprietary Information may include: (i)  corporate information , including plans, strategies, product suppliers or importers, retail and store strategies, methods, policies, dispute resolutions, negotiations or litigation; (ii)  marketing information , including strategies, methods, customer identities or other information about customers, prospect identities or other information about prospects, or market analyses or projections; (iii)  financial information , including cost and performance data, debt arrangements, equity structure, investors and holdings, purchasing and sales data and price lists; (iv)  operational and technological information , including plans, specifications, wood finishing procedures, new products, finishes or other chemicals or treatments used, types of wood imported, used or resold by the Company, manuals, forms, templates, software, designs, methods, procedures, formulas, discoveries, inventions, improvements, concepts and ideas; and (v)  personnel information , including personnel lists, reporting or organizational structure, resumes, personnel data, compensation structure, performance evaluations and termination arrangements or documents. The Company derives economic value from Proprietary Information that would be diminished if such Proprietary Information were disclosed to Persons in competition with the Company or to the general public.

“ Restricted Area ” means any county, city, town, or municipality where the Company conducts business and in which (i) the Optionee operates on behalf of the Company; or (ii) the Optionee exercises responsibility for or control over an aspect of the Company’s business, in each case in his capacity as Vice President, Operations of the Company.

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“ Restricted Period ” means the period during which the Optionee is employed by the Company and a period of twelve (12) months following the cessation of the Optionee’s employment with the Company for any reason whatsoever.

“ Sale Event ” shall mean, regardless of form thereof and except in the case of the Initial Public Offering, consummation of (i) the dissolution or liquidation of the Company, (ii) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (iii) a merger, reorganization or consolidation in which the outstanding shares of Stock are converted into or exchanged for securities of the successor entity and the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the successor entity immediately upon completion of such transaction, (iv) the sale of all or a majority of the outstanding capital stock of the Company to an unrelated person or entity or (v) any other transaction in which, the owners of the Company’s outstanding voting power prior to such transaction do not own, collectively, at least a majority of the outstanding voting power of the successor entity immediately upon completion of the transaction. Notwithstanding the foregoing, a transfer by Thomas Sullivan (the “Founder”) to any beneficiary of the Founder or to a trust for the benefit of any relative or beneficiary of the Founder, whether by testamentary transfer or otherwise, shall not constitute a Sale Event.

“ Subsidiary ” shall mean any corporation (other than the Company) in any unbroken chain of corporations or other entities beginning with the Company if each of the corporations (other than the last corporation in the unbroken chain) owns stock or other interests possessing 50 percent or more of the total combined voting power of all classes of stock or in one of the other corporations in the chain.

2. Vesting, Exercisability and Termination .

(a) In connection with the Plan, the Optionee agrees to take all reasonable action requested by the Company in order to give full effect to the terms hereof, including entering into a stockholders agreement in a form reasonably acceptable to the Company.

(b) No portion of this Stock Option may be exercised until such portion shall have vested.

(c) Except as set forth below and in Section 6, and subject to the determination of the Committee in its sole discretion to accelerate the vesting schedule hereunder, this Stock Option shall vest in accordance with the following schedule:

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In any event, all of the Option Shares shall be deemed fully vested and exercisable on                          if Optionee is employed on such date.

Notwithstanding anything herein to the contrary, but without limitation of Section 6, in the event that this Stock Option is assumed or continued by the Company or its successor entity in the sole discretion of the parties to a Sale Event and thereafter remains in effect following such Sale Event as contemplated by Section 6, then this Stock Option shall be deemed vested and exercisable in full upon the date on which the Optionee’s employment with the Company and its Subsidiaries or successor entity terminates if (i) such termination occurs within 18 months of such Sale Event and (ii) such termination is either by the Company without Cause or by the Optionee for Good Reason.

(d) Termination . Except as may otherwise be provided by the Committee, if the Optionee’s employment with the Company or a Subsidiary is terminated, the period within which to exercise this Stock Option may be subject to earlier termination as set forth below:

(i) Termination Due to Death or Disability . If the Optionee’s employment terminates by reason of such Optionee’s death or disability (as defined in Section 422(c) of the Code), this Stock Option may be exercised, to the extent exercisable on the date of such termination, by the Optionee, the Optionee’s legal representative or legatee for a period of 12 months from the date of death or disability or until the Expiration Date, if earlier, subject in any event to Section 6.

(ii) Other Termination . If the Optionee’s employment terminates for any reason other than death or disability, and unless otherwise determined by the Committee, this Stock Option may be exercised, to the extent exercisable on the date of termination, for a period of 90 days from the date of termination or until the Expiration Date, if earlier, provided however , if the Optionee’s employment is terminated for Cause, this Stock Option shall terminate immediately upon the date of such termination.

For purposes hereof, the Committee’s determination of the reason for termination of the Optionee’s employment shall be conclusive and binding on the Optionee and his or her representatives or legatees. Any portion of the Stock Option that is not exercisable on the date of termination of the employment shall terminate immediately and be null and void.

3. Exercise of Stock Option .

(a) The Optionee may exercise this Stock Option only in the following manner: Prior to the Expiration Date (subject to Section 6), the Optionee may deliver a Stock Option exercise notice (an “Exercise Notice”) in the form of Appendix A hereto indicating his or her election to purchase some or all of the Option Shares with respect to which this Stock Option is exercisable at the time of such notice. Such notice shall specify the number of Option Shares to be purchased. Payment of the purchase price may be made by one or more of the methods described below. Payment instruments will be received subject to collection.

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(i) in cash, by certified or bank check, or other instrument acceptable to the Committee in U.S. funds payable to the order of the Company in an amount equal to the purchase price of such Option Shares; or

(ii) if the Company’s Initial Public Offering has occurred, then (A) through the delivery (or attestation to ownership) of shares of Common Stock that have been purchased by the Optionee on the open market or that have been held by the Optionee for at least six months and are not subject to restrictions under any plan of the Company and in any event with an aggregate Fair Market Value (as of the date of such exercise) equal to the option purchase price, (B) by the Optionee delivering to the Company a properly executed Exercise Notice together with irrevocable instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable to the Company to pay the option purchase price, provided that in the event the Optionee chooses to pay the option purchase price as so provided, the Optionee and the broker shall comply with such procedures and enter into such agreements of indemnity and other agreements as the Committee shall prescribe as a condition of such payment procedure, or (C) a combination of (i), (ii)(A) and (ii)(B) above.

(b) Certificates for the Option Shares so purchased will be issued and delivered to the Optionee upon compliance to the satisfaction of the Committee with all requirements under applicable laws or regulations in connection with such issuance. Until the Optionee shall have complied with the requirements hereof and of the Plan, the Company shall be under no obligation to issue the Option Shares subject to this Stock Option, and the determination of the Committee as to such compliance shall be final and binding on the Optionee. The Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to this Stock Option unless and until this Stock Option shall have been exercised pursuant to the terms hereof, the Company shall have issued and delivered the Issued Shares to the Optionee, and the Optionee’s name shall have been entered as a stockholder of record on the books of the Company. Thereupon, the Optionee shall have full dividend and other ownership rights with respect to such Issued Shares, subject to the terms of this Agreement.

(c) Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option shall be exercisable after the Expiration Date.

4. Incorporation of Plan . Notwithstanding anything herein to the contrary, this Stock Option shall be subject to and governed by all the terms and conditions of the Plan.

5. Transferability of Stock Option . This Agreement is personal to the Optionee and is not transferable by the Optionee in any manner other than by will or by the laws of descent and distribution. The Stock Option may be exercised during the Optionee’s lifetime only by the Optionee (or by the Optionee’s guardian or personal representative in the event of the Optionee’s incapacity). The Optionee may elect to designate a beneficiary by providing written notice of the name of such beneficiary to the Company, and may revoke or change such designation at any time by filing written notice of revocation or change with the Company; such beneficiary may exercise the Optionee’s Stock Option in the event of the Optionee’s death to the

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extent provided herein. If the Optionee does not designate a beneficiary, or if the designated beneficiary predeceases the Optionee, the legal representative of the Optionee may exercise this Stock Option to the extent provided herein in the event of the Optionee’s death.

6. Effect of Certain Transactions .

(a) Sale Event . In the case of a Sale Event, fifty percent (50%) of any Option Shares under this Stock Option that are not then vested shall become vested as of the effective time of the Sale Event; provided, however , that the exercise of any Option Shares not exercisable prior to the Sale Event shall be subject to the consummation of the Sale Event.

(b) Initial Public Offering . Upon completion of the Company’s Initial Public Offering, the date of exercisability or vesting of all or any portion of any Option Shares that are not then exercisable shall be accelerated by one (1) year.

7. Withholding Taxes . The Optionee shall, not later than the date as of which the exercise of this Stock Option becomes a taxable event for federal income tax purposes, pay to the Company any federal, state and local taxes required by law to be withheld on account of such taxable event. Subject to approval by the Committee, the Optionee may elect to have the minimum statutory tax withholding obligation satisfied, in whole or in part, by authorizing the Company to withhold from shares of Common Stock to be issued or transferring to the Co