Exhibit 10.3

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October 24, 2008

Frederick G. Silny

2247 Silver Lake Drive

Los Angeles, CA 90039

Dear Fred:

In recognition of the important contributions we expect you will make to the
success of Charlotte Russe Holding, Inc. and its subsidiaries (the “Company”), I
am pleased to formalize in writing our commitment to you concerning the terms of
your employment as the Company’s Executive Vice President, Chief Financial
Officer and Treasurer. Your employment with the Company would be expected to
commence on or about November 10, 2008.

Duties. You will perform and discharge your duties and responsibilities
faithfully, diligently and to the best of your ability. You will devote
substantially all of your business time and efforts to the business and affairs
of the Company. You shall have responsibility for all accounting, finance, and
investor relations functions, consistent with the position of Executive Vice
President, Chief Financial Officer and Treasurer. You will report to the
Company’s Chief Executive Officer. Notwithstanding anything herein to the
contrary, this Agreement shall not be interpreted to prohibit you from engaging
in personal investment activities, attending educational classes, and performing
charitable acts or services to family members, if those activities do not
materially interfere with the services required under this Agreement, provided
that you will not directly or indirectly acquire, hold or retain any material
interest in any business competing, directly or indirectly, with the business of
the Company, except for investments in mutual and other similar funds or
investments of 1% or less of the equity of a publicly traded company. In
addition, you will be permitted to continue one of your two existing private
company directorships (you agree that you will resign your second existing
private company directorship within six months following your start date) and
may be permitted to take on additional directorships with other companies in the
future with the approval of the Board and/or the Nominating and Corporate
Governance Committee of the Board, provided in each case that you shall not
serve on the board of directors of any company that competes, directly or
indirectly, with the business of the Company.

Base Salary. Your base salary will be paid at the rate of $33,333.34 per month
($400,000 gross annualized); paid bi-weekly with payroll. Annually throughout
your employment, your performance and salary will be reviewed by the
Compensation Committee of the Board and your base salary may not be decreased,
except for decreases in base salary consistent with decreases applicable to the
Company’s other executive officers, provided that your base salary will not be
decreased during fiscal year 2009. All payments under this paragraph or any
other paragraph of this Agreement will be made in accordance with the regular
payroll practices of the Company, reduced by applicable federal and state
withholdings.

Signing Bonus. On the first regular payroll date following your start date, you
will receive $160,000 as a signing bonus ($60,000 of which is being provided in
lieu of the Company’s payment of temporary living expenses incurred by you). In
the event that the Company terminates your employment for Cause (as defined
below), or you terminate your employment without Good Reason (as defined below),
in each case within 12 months of your start date, a portion of your signing
bonus must be paid back to the Company. The amount which you must pay back to
the Company shall be equal to the number of full months remaining until your
12-month anniversary with the Company, multiplied by $13,333.34.

Cash Incentive Bonus. Commencing with the Company’s 2009 fiscal year, you will
be eligible to receive an annual cash incentive bonus in accordance with the
Company’s Executive Officer Compensation Program as in effect from time to time
(the “Program”) and as determined by the Board or its Compensation Committee, in
its sole discretion, based upon your achievement and the Company’s achievement
of annual performance goals established by the Board or its Compensation
Committee at the beginning of each fiscal year. For an executive at your level
of seniority, the Program currently provides for annual cash incentive bonus

 

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guidelines (as a minimum, midpoint and maximum percentage of annual base salary)
of 35%, 60% and 100%, respectively. In order to receive any annual cash
incentive bonus, you must be actively employed at the completion of the
Company’s applicable fiscal year and at the time the annual incentive bonus is
paid out. All decisions by the Board or its Compensation Committee pertaining to
bonus eligibility and/or achievement are final. Notwithstanding the foregoing:
1) if your employment is terminated without Cause or for Good Reason, you shall
be entitled to receive a pro-rated bonus for the fiscal year in which the
termination occurs equal to the bonus that would have been paid to you had you
remained with the Company through the time such bonus is paid out multiplied by
a fraction equal to the number of days elapsed since the commencement of the
applicable fiscal year of the Company (as of the date of your termination)
divided by 360 (such bonus to be paid no later than 2  1/2 months following the
end of the applicable fiscal year); and 2) you shall be entitled to receive all
the earned, but unpaid bonuses with respect to the fiscal years of the Company
preceding the fiscal years of your termination, with such amount being paid as
soon as practical, but in no event later than seventy-five days following
termination.

Equity Compensation. On the date of commencement of your employment, you will
receive a nonstatutory stock option (“Option”) with an exercise price equal to
the NASDAQ closing price of the Company’s stock on the date of grant. The number
of shares subject to the Option will be equal to $400,000 divided by the
Black-Scholes value of a stock option covering a single share of stock (based
upon the NASDAQ closing price of the Company’s stock on such date and calculated
in accordance with the methodology currently used by the Company for financial
reporting purposes), rounded to the nearest 500 shares. The Option will be
subject to the terms and conditions of the Company’s 1999 Equity Incentive Plan
(the “Plan”) and will be subject to the following vesting schedule: 33 1/3% of
the shares subject to the Option shall vest and be exercisable on the first
anniversary of the date of grant; the next 33 1/3% of the shares subject to the
Option shall vest and be exercisable on the second anniversary of the date of
grant; and the remaining 33 1/3% of the shares subject to the Option shall vest
and be exercisable on the third anniversary of the date of grant, provided that
you are employed by the Company on the applicable vesting date(s). The Plan or
the agreements to be entered into between you and the Company with respect to
the Option shall provide that all of your equity awards thereunder shall become
immediately vested and fully exercisable upon a Change of Control (as defined in
the Plan).

Commencing with the Company’s 2010 fiscal year, you will be eligible to receive
additional annual equity compensation in accordance with the Program and as
determined by the Board or its Compensation Committee, in its sole discretion.

Benefits. You will accrue three weeks of paid vacation per year, to be taken at
such times as you and the Company mutually agree upon. Any additional weeks of
vacation earned per year will accrue according to Company policy. In addition,
you will also accrue five health leave days per year. You will be eligible to
participate in all benefit and welfare plans made generally available to senior
management executives of the Company, as in effect from time to time, subject to
Company’s right to modify or terminate such plans or benefits at any time with
respect to employees of similar rank and title.

Relocation Expenses. The Company shall reimburse reasonable, out-of-pocket
expenses incurred by you in connection with the relocation of your principal
residence to the San Diego, California area, including legal expenses, expenses
incurred in connection with the sale or rental of your home (such as brokerage
fees and closing costs and the costs of preparing the home for the market),
expenses incurred by you in connection with purchasing or renting a home (such
as loan fees), and moving expenses, up to a maximum of one hundred thousand
dollars ($100,000) in the aggregate, all provided that you complete such
relocation of your principal residence not later than the second anniversary of
the commencement of your employment with the Company and submit such expenses
not later than sixty (60) days after such relocation is concluded. The Company
shall pay additional compensation to you in an amount necessary to reimburse
you, on an after-tax basis, for the additional income and employment taxes
incurred by you as a result of the reimbursement of such expenses. Such
additional compensation shall be paid to you not later than the end of the
calendar year following the calendar year in which you incur the expense being
reimbursed.

401(k). Eligibility for enrollment occurs quarterly after one year of continuous
employment. As an additional benefit, the Company will match your contribution
at the rate of 25% for up to 4% of your eligible pay. The Company match portion
of this savings plan has a vesting schedule of 25% per employment year.

 

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Termination of Employment and Severance. You understand and agree that this
Agreement is not meant to constitute a contract of employment for a specific
term, and consequently your employment will be “at-will”. What this means is
that either you or the Company may terminate your employment at any time,
without notice and with or without Cause. If the Company terminates your
employment for Cause, or you terminate your employment without Good Reason, the
Company’s only obligation to you under this Agreement will be to continue to pay
your base salary and earned but unpaid compensation (including bonus) through
the date of termination and pay to you any unused earned vacation as of the last
date of your employment (collectively referred to as the Accrued Compensation”).
If, however, the Company terminates your employment for any reason other than
for Cause, excluding your death or disability (defined as your inability to
perform your duties hereunder by reason of any physical or mental incapacity
that results in your satisfaction of all requirements necessary to receive
benefits under the Company’s long-term disability plan due to a total
disability), or you terminate your employment with Good Reason, the Company
shall (i) make a lump sum payment to you of any Accrued Compensation within ten
days of the termination of your employment; (ii) continue to pay your base
salary at regular pay-date installments for a period of 12 months following the
effectiveness of the General Release (as defined below) (the “Severance
Period”); (iii) pay you any pro-rated bonus to which you may become entitled as
described in the Cash Incentive Bonus Section above,: (iv) permit you to
exercise all vested options you hold in the Company’s stock for a period of 6
months following such termination (but not to exceed the original term of such
options); and (v) provided you timely elect to continue health insurance
benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, the
Company shall provide you and your eligible dependents with such continued
health insurance benefits during the Severance Period without cost to you;
provided that if you are a “specified employee” within the meaning of U.S.
Internal Revenue Code Section 409A (“Section 409A”) at the time your employment
terminates, any payment that is not exempt from Section 409A but that would
otherwise be payable within the six-month period beginning with your termination
date shall be paid on the first day of the month that follows the end of such
six-month period. For these purposes, each such installment shall be treated as
a “separate payment” under Section 409A.

There are certain conditions that must be met in order for you to receive any
severance payment under this Agreement. First, you must sign a general release
agreement in favor of the Company and in a form reasonably acceptable to the
Company (the “General Release”), within the applicable time period set forth
therein, but in no event more than 45 days following termination, and permit the
release of claims contained therein to become effective in accordance with its
terms. Second, you must abide by all terms of this Agreement. The Company shall
have the right to cease making any severance payment under this Agreement in the
event you breach any provision of it. Third, any severance payment(s) made to
you under this Agreement shall be offset by the amount of any income earned by
you following your termination and will cease altogether when you obtain a new
position which pays you compensation equal to or higher than your rate of
compensation as of the last date of your employment with the Company. You will
not be entitled to any fringe benefits following termination of employment,
except as specifically provided in writing in the applicable benefit plan or
policy.

For purposes of this Agreement, “Cause” means (i) willful breach of duty, gross
neglect of duty, gross carelessness or gross misconduct in the performance of
your duties; (ii) commission of a felony or other crime involving moral
turpitude; (iii) commission of any act of material dishonesty involving injury
to the Company; (iv) the willful unauthorized disclosure of material privileged
or confidential information related to the Company or its employees, except as
may be compelled by legal process or court order; (v) the commission of a
willful act or omission which violates material written Company policy or
procedures; (vi) alcohol or controlled substance abuse that materially impacts
the performance of your duties; or (vii) any other willful act of misconduct
which, in the opinion of the Board has, or is reasonably likely to have, a
material adverse impact upon the Company; provided, however, that with respect
to the first occurrence of any of the acts specified in clauses (i), (v),
(vi) and (vii) above, you will have a reasonable opportunity to cure such act,
violation or condition after receiving written notice from the Company, which
shall not be greater than thirty (30) days.

For purposes of this Agreement, “Good Reason” for you to terminate your
employment hereunder shall mean your termination within 90 days of the
occurrence, without your consent, of any of the following events: (1) a material
reduction in your duties, position, authority, reporting or responsibilities
relative to your duties, position, authority, reporting or responsibilities in
effect immediately prior to such reduction; (2) the relocation of the Company’s
executive offices or principal business location to a location more than 60
miles outside the greater metropolitan areas of San Diego, California and Los
Angeles, California (including Orange and the adjacent counties); (3) a material
reduction by the Company of your base salary as initially set forth herein or as
the same may

 

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be increased from time to time other than decreases in base salary consistent
with decreases applicable to the Company’s other executive officers; or (4) any
material breach of this Agreement; provided, however, that such termination by
you shall only be deemed for Good Reason pursuant to the foregoing definition
if: (i) you give the Company written notice of your intent to terminate for Good
Reason within 30 days following the first occurrence of the condition(s) that
you believe constitute Good Reason, which notice shall describe such
condition(s); (ii) the Company fails to remedy such condition(s) within 30 days
following receipt of the written notice (the “Cure Period”); and (iii) you
terminate your employment within 30 days following the end of the Cure Period.

Restricted Activities. During the term of your employment with the Company, you
will not, directly or indirectly, be connected as an officer, employee, board
member, consultant, advisor, owner or otherwise (whether or not for
compensation) with any business which competes with any business of the Company
or its subsidiaries in any area where such business is then being conducted or
actively planned by the Company or a subsidiary. During the term of your
employment with the Company, and for a period of two years thereafter, you will
not, and you will not assist any other person or entity to, hire or solicit the
employment of any employees of the Company or any of its subsidiaries (or any
person who in the prior six months was such an employee) or otherwise seek to
induce any such employee to terminate his or her employment with the Company or
any of its subsidiaries. Other than in connection with the performance of your
duties for the Company, you will not disclose to any person or entity any
information obtained by you while in the employ of the Company, the disclosure
of which may be adverse to the interests of the Company, or use any such
information to the detriment of the Company. You understand that your
commitments in this paragraph are in exchange for the Company’s commitments to
you in this Agreement, and that the restrictions contained in the preceding two
sentences apply after your employment terminates, regardless of the reason for
such termination.

Successors. The Company shall obtain from any successor, prior to or
concurrently with the succession, an agreement to assume the obligations and
perform all of the terms and conditions of this Agreement.

Director and Officer Insurance and Indemnification. The Company shall obtain and
pay the premiums for a director and officer insurance policy with scope and
amounts of coverage consistent with coverage provided to other members of the
Board and shall name you as an insured under the policy with the same coverage
at such time as other current and former directors and officers of the Company.
The Company shall further indemnify you and hold you harmless and advance
expenses as provided under the Company’s certificate of incorporation and
by-laws in effect from time to time to the fullest extent permitted under
applicable law.

Miscellaneous. The headings in this Agreement are for convenience only and do
not affect the meaning hereof. This Agreement (together with the Program)
constitutes the entire agreement between the Company and you, and supersedes any
prior communications, agreements and understandings, whether written or oral,
with respect to your employment and compensation and all matters pertaining
thereto. This Agreement shall be governed by and construed in accordance with
the law of the State of California. Please also understand that by no means does
the Company wish you to undertake any activities on behalf of Charlotte Russe
that would cause you to violate the terms of any noncompete agreement or any
other obligation you may be under by virtue of your employment prior to the
Company or otherwise, and you expressly agree that you shall not do so in
connection with your employment with the Company.

Disputes. Any dispute between the Company and you concerning the meaning or
interpretation of this Agreement, or any alleged breach thereof, shall be
resolved in a binding arbitration to be conducted in San Diego, California
before a single neutral arbitrator to be selected by the parties from a list of
arbitrators on the Employment Dispute Panel of the Judicial Arbitration and
Mediation Service. Arbitration shall be initiated by the party desiring
arbitration by serving written notice to the other party. Said arbitration shall
be conducted no later than 120 days following the date of said written notice,
absent the written agreement of the parties otherwise.

Partial Invalidity. If the application of any provision of this Agreement is
held invalid or unenforceable, the remaining provisions shall not be affected,
but will continue to be given full force and in effect as if the part held
invalid or unenforceable had not been included.

 

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Acceptance. In accepting the terms and conditions reflected in this Agreement,
you represent that you have not relied on any agreement or representation, oral
or written, express or implied, that is not set forth expressly in this
Agreement. If this Agreement reflects your understanding, please sign and return
a copy to me, whereupon it shall become a binding agreement between the Company
and you.

 

Very truly yours,       Charlotte Russe Holding, Inc.       By:   /s/ Leonard H.
Mogil         Leonard H. Mogil         Chief Executive Officer       Accepted
and Agreed To: /s/ Frederick G. Silny       11/7/08             Frederick G.
Silny       Date

 

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