kirklandslogo.jpg [kirklandslogo.jpg]

5310 Maryland Way
Brentwood, TN 37027
United States Of America

April 5, 2018

Via Hand Delivery

W. Michael Madden

Dear Mike:

You previously entered into an Employment Agreement with Kirkland’s, Inc. (the
“Company”) dated June 1, 2016 (the “Employment Agreement”). To reflect your
transition from Chief Executive Officer of the Company to employee-advisor to
the Board of Directors (the “Board”) and your resignation from employment with
the Company on June 30, 2018 (the “Termination Date”), this letter (this “Letter
Agreement”) supplements and modifies the Employment Agreement.

1.You and the Company hereby agree that, effective at the close of business on
the date hereof (a) you will cease to serve as the President and Chief Executive
Officer of the Company, (b) you hereby resign as a member of the Board, and (c)
you will assume the role of employee-advisor to the Board. As an
employee-advisor to the Board, you will support the Company’s leadership
transition and perform such other duties as the Board or the acting CEO
reasonably requests, including without limitation, using your best efforts to
conclude, by May 31, 2018, the negotiations for the lease of the Smith Lane
distribution center in Jackson, TN, assisting in investor relations strategy and
communications, and assisting on certain personnel and other matters.

2.Your employment with the Company as an employee-advisor, and your service as
an officer or director of any subsidiary of the Company, will cease
automatically at the close of business on the Termination Date. Until that time,
provided that you continue in employment, your compensation and benefits from
the Company will continue without change and you will remain subject to
applicable Company’s policies.

3.The Company will treat the cessation of your employment on the Termination
Date as a termination entitling you to the salary continuation benefits
described in Section 8(b) of the Employment Agreement (as revised pursuant to
Section 4 below), subject to your execution and non-revocation of the release
attached hereto as Exhibit A following the Termination Date, which release
replaces the form attached to the Employment Agreement as Exhibit B.

4.In addition, if you execute this Letter Agreement, the Company and you agree
that:

A.    The Company will not terminate your employment prior to the Termination
Date;

B.    Section 8(b) of your Employment Agreement shall be amended to read in its
entirety as follows:

“Company Terminates Executive Without Cause or Executive Resigns For Good
Reason. If the Company terminates Executive’s employment without Cause or if
Executive resigns for Good Reason, the Company shall, subject to Section 8(e)
below, pay the Executive one and three quarters (1 3/4) times Executive’s Base
Salary for the year in which such termination shall occur in twenty-one
substantially equal monthly installments.”

C.    Section 8(d) of your Employment Agreement shall be amended to read in its
entirety as follows:

“Notwithstanding any provision of this Agreement to the contrary, Executive and
the Company agree that the Restrictive Non-Competition Period shall continue
until March 31, 2020.”

D.    Section 1(k) of your Employment Agreement shall be amended to read in its
entirety as follows:

“‘Restricted Non-Competition Period’ means the period of time continuing until
March 31, 2020.”

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E.    subject to your execution and non-revocation of the Release attached
hereto as Exhibit A following the Termination Date, if you timely elect COBRA
continuation of your group health coverage, the Company shall pay the applicable
premium for such COBRA continuation coverage until such time as the continued
coverage terminates or expires in accordance with COBRA.

5.In consideration for the Company’s agreements in Section 4, above, you hereby
fully and forever release and discharge the Company (including, for purposes of
this Section 5, all predecessors and successors, subsidiaries, affiliates,
assigns, officers, directors, trustees, employees, agents and attorneys, past
and present) from any and all claims, demands, liens, agreements, contracts,
covenants, actions, suits, causes of action, obligations, controversies, debts,
costs, expenses, damages, judgments, orders and liabilities, of whatever kind or
nature, direct or indirect, in law, equity or otherwise, whether known or
unknown, arising out of your employment by the Company, the change in your
position or the termination of your employment, including, but not limited to,
any claims for relief or causes of action under any federal, state or local
statute, ordinance or regulation regarding discrimination, harassment or
retaliation (including but not limited to Title VII of the Civil Rights Act of
1964, as amended by the Civil Rights Act of 1991, the Americans with
Disabilities Act, as amended, the Age Discrimination in Employment Act, the
Tennessee Human Rights Act and the Tennessee Disability Act), any claim for lost
wages or benefits, any whistleblower or federal or state False Claims Act
claims, any claims, demands or actions based upon alleged wrongful or
constructive discharge, tort or breach of contract under any state or federal
law, and any claims for attorneys’ fees and costs. The foregoing will not be
deemed to release your right (a) to enforce this Letter Agreement, (b) to
enforce Section 8(b) of the Employment Agreement, or (c) for indemnification
under the Company’s By-Laws, under applicable law, under any indemnification
agreement between the Company and you or under any similar arrangement.

6.This Letter Agreement, together with the Employment Agreement (as modified and
supplemented hereby), constitutes our entire agreement and understanding
regarding the matters discussed herein and merges and supersedes all prior
discussions, understandings and agreements with respect to those matters.

7.This Letter Agreement may be executed in separate counterparts (including by
facsimile or other electronic means), each of which will be deemed to be an
original and all of which taken together will constitute one and the same
instrument.

To acknowledge your agreement with the foregoing, please sign and return to me
the enclosed copy of this letter, which will then constitute our legally binding
agreement.

Sincerely,

Kirkland’s, Inc.

By:    /s/ Michael Cairnes
Title:    Acting Chief Executive Officer

I hereby agree to the terms and conditions of Letter Agreement (including the
release set forth above in Section 5) on April 5, 2018:

/s/ W. Michael Madden
W. Michael Madden

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EXHIBIT A
RELEASE AND NON-DISPARAGEMENT AGREEMENT
THIS RELEASE AND NON-DISPARAGEMENT AGREEMENT (the “Release”) is made on July
___, 2018 by and between W. MICHAEL MADDEN (“Executive”) and KIRKLAND’S, INC.
(the “Company”).

WHEREAS, Executive’s employment by the Company terminated on June 30, 2018 (the
“Termination Date”); and

WHEREAS, in connection with that termination and pursuant to Section 8(b) of the
Employment Agreement by and between the Company and Executive dated as of June
1, 2016 (the “Employment Agreement”) and Section 4.B of that certain Letter
Agreement between the Company and Executive dated April 5, 2018 (the “Letter
Agreement”), the Company has agreed to make certain payments to or on behalf of
Executive, subject to the execution of this Release.

NOW THEREFORE, in consideration of these premises and the mutual promises
contained herein, and intending to be legally bound hereby, the parties agree as
follows:

SECTION 1.Resignation. Executive hereby confirms the cessation of his employment
with the Company and his resignation from his service as an officer and/or
director of any subsidiary or Affiliate of the Company, effective as of the
Termination Date.

SECTION 2.Acknowledgements. Executive acknowledges that: (a) the payments
described in Section 8(b) of the Employment Agreement constitute full settlement
of all Executive’s rights under the Employment Agreement, (b) the payments
described in Section 4.B of the Letter Agreement constitute full settlement of
all Executive’s rights under the Letter Agreement, (c) Executive has no
entitlement under any other severance or similar arrangement maintained by the
Company, and (d) except as otherwise provided specifically in this Release, the
Company does not and will not have any other liability or obligation to
Executive. Executive further acknowledges that, in the absence of Executive’s
execution of this Release, Executive would not otherwise be entitled to the
payments described in Section 8(b) of the Employment Agreement or Section 4.B of
the Letter Agreement.

SECTION 3.Release and Covenant Not to Sue.

(a)Release. Executive hereby fully and forever releases and discharges Company
(including, for purposes of this Section 3, all predecessors and successors,
subsidiaries, Affiliates, assigns, officers, directors, trustees, employees,
agents and attorneys, past and present) from any and all claims, demands, liens,
agreements, contracts, covenants, actions, suits, causes of action, obligations,
controversies, debts, costs, expenses, damages, judgments, orders and
liabilities, of whatever kind or nature, direct or indirect, in law, equity or
otherwise, whether known or unknown, arising out of Executive’s employment by
the Company or the termination thereof, including, but not limited to, any
claims for relief or causes of action including, but not limited to, any claims
for relief or causes of action under any federal, state or local statute,
ordinance or regulation regarding discrimination, harassment or retaliation
(including but not limited to Title VII of the Civil Rights Act of 1964, as
amended by the Civil Rights Act of 1991, the Americans with Disabilities Act, as
amended, the Age Discrimination in Employment Act, the Tennessee Human Rights
Act and the Tennessee Disability Act), any claim for lost wages or benefits, any
whistleblower or federal or state False Claims Act claims, any claims, demands
or actions based upon alleged wrongful or constructive discharge, tort or breach
of contract under any state or federal law, and any claims for attorneys’ fees
and costs.
 
(b)Covenant Not to Sue. Executive expressly represents that Executive has not
filed a lawsuit or initiated any other administrative proceeding against the
Company and that Executive has not assigned any claim against the Company to any
other person or entity. Executive further promises not to initiate a lawsuit or
to bring any other claim against the Company arising out of or in any way
relating to Executive’s employment by the Company or the termination of that
employment.

(c)Communications with Government Agencies. This Release will not prevent
Executive from filing an administrative charge or complaint, or otherwise
communicating with or participating in an investigation by the Equal Employment
Opportunity Commission (“EEOC”), the National Labor Relations Board, the
Occupational Safety and Health Administration, the Securities and Exchange
Commission, any agency Inspector General, or any other federal, state, or local
agency governing employee rights. Nothing in this Agreement shall be construed
to limit any disclosure to any such governmental officials or agencies or making
disclosures that are protected under the whistleblower provisions of federal law
or regulation. However, by signing this Agreement, Executive waives his right to
recover any damages or other relief in any claim or suit brought by him, or by
or through the EEOC, or other federal, state, or local agency on his behalf,
against any of the released parties under

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any federal, state, or local law, except where prohibited by law. This Agreement
does not limit Executive’s right to receive an award for information provided to
any government agency.

(d)Claims Not Released. The foregoing will not be deemed to release the Company
from claims solely (i) to enforce this Release, (ii) to enforce Section 8(b) of
the Employment Agreement, as revised pursuant to Section 4.B of the Letter
Agreement, or (iii) for indemnification under the Company’s By-Laws, under
applicable law, under any indemnification agreement between the Company and
Executive or under any similar arrangement.

SECTION 4.Non-Competition and Confidentiality Obligations. Executive
acknowledges that the Restrictive Covenants (as defined in the Employment
Agreement) survive the termination of Executive’s employment. Executive affirms
that the Restrictive Covenants are reasonable and necessary to protect the
legitimate interests of the Company, that Executive received adequate
consideration in exchange for agreeing to those restrictions, and that Executive
will abide by those restrictions.

SECTION 5.Non-Disparagement. Executive will not disparage Company or any of its
directors, officers, agents or employees or otherwise take any action which
could reasonably be expected to adversely affect the personal or professional
reputation of Company or any of its directors, officers, agents or employees.

SECTION 6.Cooperation. Executive further agrees to cooperate fully with the
Company and its counsel with respect to any matter (including litigation,
investigations, or governmental proceedings) that relates to matters with which
Executive was involved during Executive’s employment with Company. Executive
shall render such cooperation in a timely manner on reasonable notice from the
Company. The Company will (a) reimburse reasonable expenses incurred by
Executive in the course of fulfilling Executive’s obligations under this
paragraph and (b) will exercise commercial reasonable efforts to schedule the
time for Executive’s cooperation so as to avoid interfering with Executive’s
other personal and professional obligations.

SECTION 7.Rescission Right. Executive expressly acknowledges and recites that
(a) Executive has read and understands this Release in its entirety,
(b) Executive has entered into this Release knowingly and voluntarily, without
any duress or coercion; (c) Executive has been advised orally and is hereby
advised in writing to consult with an attorney with respect to this Release
before signing it; (d) Executive was provided twenty-one (21) calendar days
after receipt of the Release to consider its terms before signing it; and
(e) Executive is provided seven (7) calendar days from the date of signing to
terminate and revoke this Release, in which case this Release shall be
unenforceable, null and void. Executive may revoke this Release during those
seven (7) days by providing written notice of revocation to the Company, care of
its Vice President- Human Resources.

SECTION 8.Miscellaneous.

(a)No Admission of Liability. This Release is not to be construed as an
admission of any violation of any federal, state or local statute, ordinance or
regulation or of any duty owed by the Company to Executive. There have been no
such violations, and the Company specifically denies any such violations.

(b)No Reinstatement. Executive agrees to not apply for reinstatement with the
Company or seek in any way to be reinstated, re-employed or hired by the Company
in the future.

(c)Successors and Assigns. This Release will inure to the benefit of and be
binding upon the Company and Executive and their respective successors,
executors, administrators, heirs and (in the case of the Company) permitted
assigns. The Company may assign this Release to any successor to all or
substantially all of its assets and business by means of liquidation,
dissolution, merger, consolidation, transfer of assets, or otherwise. Executive
may not make any assignment of this Release or any interest herein.

(d)Severability. The provisions of this Release are severable. If any provision
or the scope of any provision is found to be unenforceable or is modified by a
court of competent jurisdiction, the other provisions or the affected provisions
as so modified shall remain fully valid and enforceable.

(e)Entire Agreement; Amendments. Except as otherwise provided herein, this
Release contains the entire agreement and understanding of the parties hereto
relating to the subject matter hereof, and merges and supersedes all prior and
contemporaneous discussions, agreements and understandings of every nature
relating subject matter hereof. This Release may not be changed or modified,
except by a Release in writing signed by each of the parties hereto.

(f)Governing Law. This Release shall be governed by, and enforced in accordance
with, the laws of the State of Tennessee, without regard to the application of
the principles of conflicts of laws.

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(g)Counterparts and Facsimiles. This Release may be executed, including
execution by facsimile signature, in one or more counterparts, each of which
shall be deemed an original, and all of which together shall be deemed to be one
and the same instrument. Counterparts may be delivered via facsimile, electronic
mail (including pdf) or other transmission method and any counterpart so
delivered shall be deemed to have been duly and validly delivered and be valid
and effective for all purposes.

IN WITNESS WHEREOF, the Company has caused this Release to be executed by its
duly authorized officer, and Executive has executed this Release, in each case
as of the date first above written.

KIRKLAND’S INC.
By:                             
Title:                            
W. MICHAEL MADDEN

By: