Exhibit 10.3

 

FRANCESCA’S HOLDINGS CORPORATION

2015 EQUITY INCENTIVE PLAN

PERFORMANCE STOCK AWARD AGREEMENT

 

THIS PERFORMANCE STOCK AWARD AGREEMENT (this “Award Agreement”) is dated as of
[______________], 2016 (the “Award Date”) by and between Francesca’s Holdings
Corporation, a Delaware corporation (the “Corporation”), and
[__________________] (the “Participant”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to the Francesca’s Holdings Corporation 2015 Equity Incentive
Plan (the “Plan”), the Corporation hereby grants to the Participant, effective
as of the date hereof, a performance stock award (the “Award”), upon the terms
and conditions set forth herein and in the Plan.

 

NOW THEREFORE, in consideration of services rendered and to be rendered by the
Participant, and the mutual promises made herein and the mutual benefits to be
derived therefrom, the parties agree as follows:

 

1.      Defined Terms. Capitalized terms used herein and not otherwise defined
herein shall have the meaning assigned to such terms in the Plan.

 

2.      Grant. Subject to the terms of this Award Agreement, the Corporation
hereby grants to the Participant an Award with respect to an aggregate of
[_______] shares of Common Stock of the Corporation, which aggregate number
represents the maximum number of shares of Common Stock that may become vested
in accordance with the terms of this Award Agreement (the “Maximum Number” of
shares). Of the Maximum Number of shares of Common Stock subject to the Award,
[________] shares represent the “target” number of shares of Common Stock
subject to the Award (the “Target Number” of shares).

 

The Target Number of shares shall be issued to the Participant on or promptly
following the Award Date as restricted shares of Common Stock of the Corporation
(the “Restricted Stock”) as provided in Section 7(a) hereof. The additional
shares of Common Stock that may be issuable pursuant to the Award (equal to the
amount by which the Maximum Number of shares exceeds the Target Number of
shares) are referred to herein as the “Additional Shares” and, subject to
vesting as set forth herein, shall be issuable as provided in Section 7(e)
hereof.

 

3.      Performance-Based and Time-Based Vesting. Subject to Section 8 below,
the Award shall become eligible to vest based on the achievement of certain
performance goals as set forth in Section 3(a) of this Award Agreement for the
[______]-year period consisting of [the Corporation’s [________] fiscal years
(each such fiscal year, a “Fiscal Year,” and such [____]-year period, the
“Performance Period”) and, with respect to any shares of Common Stock subject to
the Award that vest in accordance with this Section 3, such shares shall vest
(and as to any such shares that are Restricted Stock, restrictions (other than
those set forth in Section 8.1 of the Plan) shall lapse) based on the
achievement of the time-based vesting requirements set forth in Section 3(b) of
this Award Agreement.

 

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(a)    Eligibility to Vest Based Upon Corporate Performance. The percentage of
the Target Shares that become eligible to vest, if any, based on the achievement
of the performance goals during the Performance Period, as determined in
accordance with Exhibit A attached hereto, are referred to as the “Eligible
Shares.” (For purposes of clarity, in no event shall the maximum number of
shares that are deemed to be Eligible Shares exceed the Maximum Shares subject
to the Award.) Any of the Target Shares that the Administrator determines shall
not be Eligible Shares in accordance with this Section 3(a) shall terminate and
be forfeited as of the last day of the Performance Period, and the Participant
shall have no further rights with respect to any such Target Shares that are not
determined to be Eligible Shares in accordance with this Section 3(a).

 

(b)               Vesting. Subject to the terms and conditions of this Award
Agreement, the number of shares subject to the Award that (1) the Administrator
has determined are Eligible Shares in accordance with Section 3(a) of this Award
Agreement and (2) do not otherwise vest in accordance with Section 8 of this
Award Agreement, if any, shall vest on the [______] anniversary of the Award
Date (the “Vesting Date”), subject to the Participant’s continuous employment or
service to the Corporation through the Vesting Date.

 

4.      Continuance of Employment. Except as expressly provided in Section 8 of
this Award Agreement, the vesting schedule requires continued employment or
service through the Vesting Date as a condition to the vesting of the applicable
installment of the Award and the rights and benefits under this Award Agreement.
Employment or service for only a portion of the vesting period, even if a
substantial portion, will not (except as expressly provided in Section 8)
entitle the Participant to any proportionate vesting or avoid or mitigate a
termination of rights and benefits upon or following a termination of employment
or services as provided in Section 8 below or under the Plan.

 

Nothing contained in this Award Agreement or the Plan constitutes an employment
or service commitment by the Corporation, affects the Participant’s status as an
employee at will who is subject to termination without cause, confers upon the
Participant any right to remain employed by or in service to the Corporation or
any of its Subsidiaries, interferes in any way with the right of the Corporation
or any of its Subsidiaries at any time to terminate such employment or services,
or affects the right of the Corporation or any of its Subsidiaries to increase
or decrease the Participant’s other compensation or benefits. Nothing in this
Award Agreement, however, is intended to adversely affect any independent
contractual right of the Participant without his or her consent thereto.

 

5.      Dividend and Voting Rights. After the Award Date, the Participant shall
be entitled to cash dividends with respect to the shares of Restricted Stock
subject to the Award even though such shares are not vested but shall not be
entitled to voting rights with respect to the shares of Restricted Stock;
provided that such rights to cash dividends shall terminate immediately as to
any shares of Restricted Stock that are forfeited pursuant to Section 8 below;
and provided, further, that the Participant agrees that promptly following any
such forfeiture of the shares of Restricted Stock, the Participant will make a
cash payment to the Corporation equal to the amount of any cash dividends
received by the Participant in respect of any such unvested, forfeited shares.
To the extent the shares are forfeited after the record date and before the
payment date for a particular dividend, the Participant shall, promptly after
the dividend is paid, make a cash payment to the Corporation equal to the amount
of any such cash dividend received by the Participant in respect of such
forfeited shares. For purposes of clarity, the Participant shall have no rights
as a stockholder of the Corporation, no dividend rights and no voting rights,
with respect to any Additional Shares until such time (if any) as such shares
are actually issued to and held of record by the Participant. No adjustments
will be made for dividends or other rights of a holder for which the record date
is prior to the date of issuance of such shares.

 

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6.      Restrictions on Transfer. Prior to the time that they have become vested
pursuant to Section 3 or Section 8 hereof or Section 7 of the Plan, neither the
Restricted Stock, nor any interest therein, amount payable in respect thereof,
nor any Restricted Property (as defined in Section 9 hereof), nor any Additional
Shares or rights with respect thereto, may be sold, assigned, transferred,
pledged or otherwise disposed of, alienated or encumbered, either voluntarily or
involuntarily. The transfer restrictions in the preceding sentence shall not
apply to (a) transfers to the Corporation, or (b) transfers by will or the laws
of descent and distribution.

 

7.      Issuance of Shares.

 

(a)                Book Entry Form. On or promptly following the Award Date, the
Corporation shall issue the shares of Restricted Stock subject to the Award
(i.e. the Target Shares) either: (a) in certificate form as provided in Section
7(b) below; or (b) in book entry form, registered in the name of the Participant
with notations regarding the applicable restrictions on transfer imposed under
this Award Agreement. Any Additional Shares that vest and become issuable
pursuant to the Award will be issued as provided in Section 7(e).

 

(b)               Certificates to be Held by Corporation; Legend. Any
certificates representing shares of Restricted Stock that may be delivered to
the Participant by the Corporation prior to vesting shall be redelivered to the
Corporation to be held by the Corporation until the restrictions on such shares
shall have lapsed and the shares shall thereby have become vested or the shares
represented thereby have been forfeited hereunder. Such certificates shall bear
the following legend and any other legends the Corporation may determine to be
necessary or advisable to comply with all applicable laws, rules, and
regulations:

 

“The ownership of this certificate and the shares of stock evidenced hereby and
any interest therein are subject to substantial restrictions on transfer under
an Agreement entered into between the registered owner and Francesca’s Holdings
Corporation. A copy of such Agreement is on file in the office of the Secretary
of Francesca’s Holdings Corporation.”

 

(c)                Delivery of Certificates Upon Vesting. Promptly after the
vesting of any shares of Restricted Stock pursuant to Section 3 or Section 8
hereof or Section 7 of the Plan and the satisfaction of any and all related tax
withholding obligations pursuant to Section 10, the Corporation shall, as
applicable, either remove the notations on any shares of Restricted Stock issued
in book entry form which have vested or deliver to the Participant a certificate
or certificates evidencing the number of shares of Restricted Stock which have
vested (or, in either case, such lesser number of shares as may result after
giving effect to Section 10). The Participant (or the beneficiary or personal
representative of the Participant in the event of the Participant’s death or
disability, as the case may be) shall deliver to the Corporation any
representations or other documents or assurances as the Corporation or its
counsel may determine to be necessary or advisable in order to ensure compliance
with all applicable laws, rules, and regulations with respect to the grant of
the Award and the delivery of shares of Common Stock in respect thereof. The
shares so delivered shall no longer be restricted shares hereunder.

 

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(d)               Stock Power; Power of Attorney. Concurrently with the
execution and delivery of this Award Agreement, the Participant shall deliver to
the Corporation an executed stock power in the form attached hereto as Exhibit
B, in blank, with respect to such shares. The Corporation shall not deliver any
share certificates in accordance with this Award Agreement unless and until the
Corporation shall have received such stock power executed by the Participant.
The Participant, by acceptance of the Award, shall be deemed to appoint, and
does so appoint by execution of this Award Agreement, the Corporation and each
of its authorized representatives as the Participant’s attorney(s)-in-fact to
effect any transfer of unvested forfeited shares (or shares otherwise reacquired
by the Corporation hereunder) to the Corporation as may be required pursuant to
the Plan or this Award Agreement and to execute such documents as the
Corporation or such representatives deem necessary or advisable in connection
with any such transfer.

 

(e)                Payment of Additional Shares. In the event that any
Additional Shares vest pursuant to the terms hereof or under the Plan, the
Corporation shall deliver to the Participant such number of Additional Shares
(in book-entry or certificate form as provided in Section 7(a) and subject to
tax withholding as provided in Section 10) on or as soon as practicable after
(and in all events within two and one-half months after) the applicable vesting
date.

 

8.      Effect of Termination of Employment or Services; Change of Control
Event.

 

(a)                General. Except as expressly provided in Section 8(b) and
8(c) below, if the Participant ceases to be employed by or ceases to provide
services to the Corporation or a Subsidiary at any time prior to the Vesting
Date (the date of such termination of employment or service is referred to as
the Participant’s “Severance Date”), (i) the Participant’s shares of Restricted
Stock (and related Restricted Property as defined in Section 9 hereof) shall be
forfeited to the Corporation and (ii) any right of the Participant to receive
any Additional Shares hereunder shall immediately terminate without payment or
other consideration therefor (in each case, regardless of the reason for such
termination of employment or service, whether with or without cause, voluntarily
or involuntarily, or due to death or disability). Upon the occurrence of any
forfeiture of shares of Restricted Stock hereunder, such unvested, forfeited
shares and related Restricted Property shall be automatically transferred to the
Corporation as of the Severance Date, without any other action by the
Participant (or the Participant’s beneficiary or personal representative in the
event of the Participant’s death or disability, as applicable). No consideration
shall be paid by the Corporation with respect to such transfer. The Corporation
may exercise its powers under Section 7(d) hereof and take any other action
necessary or advisable to evidence such transfer. The Participant (or the
Participant’s beneficiary or personal representative in the event of the
Participant’s death or disability, as applicable) shall deliver any additional
documents of transfer that the Corporation may request to confirm the transfer
of such unvested, forfeited shares and related Restricted Property to the
Corporation.

 

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(b)               Termination Without Cause, With Good Reason or Due to Death.
Subject to Section 8(c), in the event the Participant ceases to be employed by
or ceases to provide services to the Corporation or a Subsidiary prior to the
Vesting Date, and such termination of employment is by the Corporation or a
Subsidiary without Cause (as defined below), by the Participant for Good Reason
(as defined below) or due to the death of the Participant, the following shall
apply with respect to the Award:

 

(i) The Performance Period shall be deemed to end as of the Severance Date (such
shortened performance period being referred to herein as the “Shortened
Performance Period”). A portion of the Target Shares subject to the Award shall
be allocated to the Shortened Performance Period equal to (x) the total number
of Target Shares multiplied by (y) a fraction, the numerator of which is the
total number of calendar days in the Shortened Performance Period and the
denominator of which is the total number of calendar days in the Performance
Period (the “Shortened Period Target Shares”).

 

(ii) To determine the vesting of such Shortened Period Target Shares, the
applicable performance goals for the Performance Period shall be pro-rated based
on the ratio of the number of calendar days in the Shortened Performance Period
to the total number of calendar days in the Performance Period, and the
performance conditions applicable to such Shortened Period Target Shares shall
be determined based on actual performance for the Shortened Performance Period
against such pro-rated goals, with the number of Shortened Period Target Shares
that may become eligible to vest determined in accordance with Exhibit A
attached hereto (as modified to give effect to the preceding provisions of this
Section 8(b)). (For purposes of clarity, such pro-ration shall be applied to the
performance goals only and not the vesting percentages applicable to each
performance level so that if the maximum performance level (as determined with
reference to the pro-rated performance goals) is achieved, the vesting
percentage shall be the maximum vesting percentage as provided in Exhibit A.)

 

(iii) With respect to any shares of Common Stock subject to the Award that vest
in accordance with this Section 8(b), such shares shall vest (and as to any such
shares that are Restricted Stock, restrictions (other than those set forth in
Section 8.1 of the Plan) shall lapse) as of the Severance Date. To the extent
that the total number of Target Shares subject to the Award exceeds the total
number of Eligible Shares determined and vested under this Section 8(b), such
excess Target Shares shall be forfeited to the Corporation as of the Severance
Date in accordance with Section 8(a) of this Award Agreement.

 

(c)                Change of Control. In the event a Change of Control (as
defined below) occurs prior to the last day of the Performance Period and either
(1) the Award is to be terminated pursuant to Section 7.2 of the Plan in
connection with such event and not assumed, substituted for, exchanged or
otherwise continued after such event, or (2) the Award is or would be assumed,
substituted for, exchanged or otherwise continued after such event and in
connection with or within twelve (12) months following the Change of Control,
the Participant’s employment or service is terminated by the Corporation or a
Subsidiary without Cause (as defined below) or by the Participant for Good
Reason (as defined below) (the occurrence of an event described in the foregoing
clause (1) or clause (2), a “Trigger Event”), the following shall apply with
respect to the Award:

 

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(i) The Performance Period shall be deemed to end as of the last day of the
Fiscal Year prior to the Fiscal Year in which the Trigger Event occurs (such
shortened performance period being referred to herein as the “CIC Shortened
Performance Period”). A portion of the Target Shares subject to the Award shall
be allocated to the CIC Shortened Performance Period equal to (x) the total
number of Target Shares multiplied by (y) a fraction, the numerator of which is
the total number of whole Fiscal Years in the CIC Shortened Performance Period
and the denominator of which is three (3) (the “CIC Shortened Period Target
Shares”).

 

(ii) To determine the vesting of such CIC Shortened Period Target Shares, the
applicable performance goals for the Performance Period shall be pro-rated based
on the ratio of the number of Fiscal Years in the CIC Shortened Performance
Period to the total number of Fiscal Years in the Performance Period (i.e.,
three), and the performance conditions applicable to such CIC Shortened Period
Target Shares shall be determined based on actual performance for the CIC
Shortened Performance Period against such pro-rated goals, with the number of
CIC Shortened Period Target Shares that may become eligible to vest determined
in accordance with Exhibit A attached hereto (as modified to give effect to the
preceding provisions of this Section 8(b)). (For purposes of clarity, such
pro-ration shall be applied to the performance goals only and not the vesting
percentages applicable to each performance level so that if the maximum
performance level (as determined with reference to the pro-rated performance
goals) is achieved, the vesting percentage shall be the maximum vesting
percentage as provided in Exhibit A.) The vesting percentage for the CIC
Shortened Performance Period as determined under this Section 8(c)(ii) is
referred to as the “CIC Vesting Percentage.”

 

(iii) In addition to the vesting provided in Section 8(c)(ii), a number of
Target Shares shall be eligible to vest equal to (x) the total number of Target
Shares subject to the Award, less (y) the total number of CIC Shortened Period
Target Shares; provided, however, that if the CIC Vesting Percentage determined
under Section 8(c)(ii) is greater than one hundred percent (100%), the number of
shares eligible to vest under this Section 8(c)(iii) shall equal (A) the CIC
Vesting Percentage, multiplied by (B)(I) the total number of Target Shares
subject to the Award, less (II) the total number of CIC Shortened Period Target
Shares; and provided, further, that if the Trigger Event occurs during the first
Fiscal Year of the Performance Period, Sections 8(c)(i) and 8(c)(ii) shall not
apply, and the Award shall vest upon the Trigger Event with respect to the total
number of Target Shares subject to the Award.

 

(iv) With respect to any shares of Common Stock subject to the Award that vest
in accordance with this Section 8(c), such shares shall vest (and as to any such
shares that are Restricted Stock, restrictions (other than those set forth in
Section 8.1 of the Plan) shall lapse) as of the Trigger Event. To the extent
that the total number of Target Shares subject to the Award exceeds the total
number of Eligible Shares determined and vested under this Section 8(c), such
excess Target Shares shall be forfeited to the Corporation as of the Trigger
Event in accordance with Section 8(a) of this Award Agreement.

 

In the event a Change of Control occurs on or after the last day of the
Performance Period and prior to the Vesting Date and either (x) the Award is to
be terminated pursuant to Section 7.2 of the Plan in connection with such event
and not assumed, substituted for, exchanged or otherwise continued after such
event, or (y) the Award is or would be assumed, substituted for, exchanged or
otherwise continued after such event and in connection with the Change of
Control or at any time following the Change of Control and prior to the Vesting
Date, the Participant’s employment or service is terminated by the Corporation
or a Subsidiary without Cause or by the Participant for Good Reason, any shares
of Common Stock subject to the Award that have been deemed to be Eligible Shares
as provided herein shall immediately vest (and as to any such shares that are
Restricted Stock, restrictions (other than those set forth in Section 8.1 of the
Plan) shall lapse) as of the date of such event.

 

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For purposes of this Section 8(c), a termination of the Participant’s employment
or service shall not be considered to be “in connection with” a Change of
Control if such termination occurs more than sixty (60) days before the Change
in Control.

 

(d)               Release. Notwithstanding the foregoing provisions, the
treatment of the Award in connection with a termination of the Participant’s
employment or service by the Corporation or a Subsidiary without Cause or by the
Participant for Good Reason pursuant to either Section 8(b) or 8(c) above shall
be subject to to the Participant’s providing to the Corporation upon or promptly
following (and in all events within twenty-one (21) days, or such longer period
of time as required by applicable law, following) the Severance Date a
separation agreement which shall contain a valid, executed general release of
claims in a form acceptable to the Corporation, and the Participant’s not
revoking such release within any revocation period provided by applicable law.

 

(e)                Defined Terms. The following definitions shall apply for
purposes of this Award Agreement:

 

(i) “Cause” with respect to the Participant means that one or more of the
following has occurred:  (A) the Participant has committed a felony or a crime
involving moral turpitude (under the laws of the United States or any relevant
state, or a similar crime or offense under the applicable laws of any relevant
foreign jurisdiction); (B) the Participant has engaged in acts of fraud,
dishonesty or other acts of material misconduct in the course of the
Participant’s duties; (C) the Participant’s abuse of narcotics or alcohol that
has or may reasonably cause material harm the Corporation; (D) any material
violation by the Participant of the Corporation’s written policies that causes
material harm to the Corporation or any of its Subsidiaries; (E) the
Participant’s material failure to perform or uphold his or her duties and/or his
or her material failure to comply with reasonable directives of the
Corporation’s Chief Executive Officer or Board of Directors, as applicable; or
(F) any material breach by the Participant of this Award Agreement or any other
contract the Participant is a party to with the Corporation or any Subsidiary.

 

(ii) “Change of Control” means any of the following:

 

(a) The dissolution or liquidation of the Corporation, other than in the context
of a Business Combination that does not constitute a Change in Control Event
under paragraph (c) below;

 

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(b) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(a “Person”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) of 50% or more of either (1) the then-outstanding shares of common stock
of the Corporation (the “Outstanding Company Common Stock”) or (2) the combined
voting power of the then-outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that, for purposes of this
paragraph (b), the following acquisitions shall not constitute a Change of
Control; (A) any acquisition directly from the Corporation, (B) any acquisition
by the Corporation, (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any of its affiliates or a
successor to the Corporation or any of its affiliates, (D) any acquisition by
any entity pursuant to a Business Combination, or (E) any acquisition by a
Person described in and satisfying the conditions of Rule 13d-1(b) promulgated
under the Exchange Act; or

 

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Corporation or any
Subsidiary, a sale or other disposition of all or substantially all of the
assets of the Corporation, or the acquisition of assets or stock of another
entity by the Corporation or any of its Subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (1) all
or substantially all of the individuals and entities that were the beneficial
owners of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of
common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such transaction, owns the
Corporation or all or substantially all of the Corporation’s assets directly or
through one or more subsidiaries (a “Parent”)), and (2) no Person (excluding any
individual or entity described in clauses (C) or (E) of paragraph (b) above)
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, more than 50% of, respectively, the
then-outstanding shares of common stock of the entity resulting from such
Business Combination or the combined voting power of the then-outstanding voting
securities of such entity, except to the extent that the ownership in excess of
50% existed prior to the Business Combination.

 

(iii) “Good Reason” with respect to the Participant means the definition of
“Good Reason” provided in any written employment agreement (or offer letter or
similar written agreement) between the Participant and Corporation or any
Subsidiary.  If the Participant is not covered by such an agreement with the
Corporation or a Subsidiary that defines such term, then “Good Reason” with
respect to the Participant means the occurrence (without the Participant’s
consent) of any one or more of the following conditions: (A) a material
diminution in the Participant’s rate of base salary; (B) a material diminution
in the Participant’s authority, duties, or responsibilities; (C) a material
change in the geographic location of the Participant’s principal office with the
Corporation (for this purpose, in no event shall a relocation of such office to
a new location that is not more than fifty (50) miles from the current location
of the Corporation’s executive offices constitute a “material change”); or (D) a
material breach by the Corporation of this Award Agreement; provided, however,
that any such condition or conditions, as applicable, shall not constitute Good
Reason unless both (x) the Participant provides written notice to the
Corporation of the condition claimed to constitute Good Reason within sixty (60)
days of the initial existence of such condition(s) (such notice to be delivered
in accordance with Section 11), and (y) the Corporation fails to remedy such
condition(s) within thirty (30) days of receiving such written notice thereof;
and provided, further, that in all events the termination of the Participant’s
employment with the Corporation shall not constitute a termination for Good
Reason unless such termination occurs not more than one hundred and twenty (120)
days following the initial existence of the condition claimed to constitute Good
Reason.

 

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9.      Adjustments Upon Specified Events. Upon the occurrence of certain events
relating to the Corporation’s stock contemplated by Section 7.1 of the Plan, the
Administrator shall make adjustments in accordance with such section in the
number and kind of securities that may become vested under the Award. If any
adjustment shall be made under Section 7.1 of the Plan or an event described in
Section 7.2 of the Plan shall occur and the shares of Restricted Stock are not
fully vested upon such event or prior thereto, the restrictions applicable to
such shares of Restricted Stock shall continue in effect with respect to any
consideration, property or other securities (the “Restricted Property” and, for
the purposes of this Award Agreement, “Restricted Stock” shall include
“Restricted Property”, unless the context otherwise requires) received in
respect of such Restricted Stock. Such Restricted Property shall vest at such
times and in such proportion as the shares of Restricted Stock to which the
Restricted Property is attributable vest, or would have vested pursuant to the
terms hereof if such shares of Restricted Stock had remained outstanding. To the
extent that the Restricted Property includes any cash (other than regular cash
dividends), such cash shall be invested, pursuant to policies established by the
Administrator, in interest bearing, FDIC-insured (subject to applicable
insurance limits) deposits of a depository institution selected by the
Administrator, the earnings on which shall be added to and become a part of the
Restricted Property.

 

10.  Tax Withholding. Subject to Section 8.1 of the Plan, upon any vesting of
the Award, the Corporation shall automatically withhold and reacquire the
appropriate number of whole shares of Restricted Stock (or, in the case of
vesting of any Additional Shares, shall automatically reduce the number of
Additional Shares to be delivered by the appropriate number of whole shares),
valued at their then fair market value (with the “fair market value” of such
shares determined in accordance with the applicable provisions of the Plan), to
satisfy any withholding obligations of the Corporation or its Subsidiaries with
respect to such vesting at the minimum applicable withholding rates. In the
event that the Corporation cannot satisfy such withholding obligations by
withholding and reacquiring shares of Restricted Stock (or such a reduction in
the number of Additional Shares to be delivered, as applicable), or in the event
that the Participant makes or has made an election pursuant to Section 83(b) of
the Code or the occurrence of any other withholding event with respect to the
Award, the Corporation (or a Subsidiary) shall be entitled to require a cash
payment by or on behalf of the Participant and/or to deduct from other
compensation payable to the Participant any sums required by federal, state or
local tax law to be withheld with respect to such vesting of any Restricted
Stock (or Additional Shares) or such Section 83(b) election or other withholding
event.

 

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11.  Notices. Any notice to be given under the terms of this Award Agreement
shall be in writing and addressed to the Corporation at its principal office to
the attention of the Secretary, and to the Participant at the Participant’s last
address reflected on the Corporation’s payroll records. Any notice shall be
delivered in person or shall be enclosed in a properly sealed envelope,
addressed as aforesaid, registered or certified, and deposited (postage and
registry or certification fee prepaid) in a post office or branch post office
regularly maintained by the United States Government. Any such notice shall be
given only when received, but if the Participant is no longer an Eligible
Person, shall be deemed to have been duly given five business days after the
date mailed in accordance with the foregoing provisions of this Section 11.

 

12.  Plan. The Award and all rights of the Participant under this Award
Agreement are subject to the terms and conditions of the provisions of the Plan,
incorporated herein by reference. The Participant agrees to be bound by the
terms of the Plan and this Award Agreement. The Participant acknowledges having
read and understanding the Plan, the Prospectus for the Plan, and this Award
Agreement. Unless otherwise expressly provided in other sections of this Award
Agreement, provisions of the Plan that confer discretionary authority on the
Board or the Administrator do not (and shall not be deemed to) create any rights
in the Participant unless such rights are expressly set forth herein or are
otherwise in the sole discretion of the Board or the Administrator so conferred
by appropriate action of the Board or the Administrator under the Plan after the
date hereof.

 

13.  Entire Agreement. This Award Agreement and the Plan together constitute the
entire agreement and supersede all prior understandings and agreements, written
or oral, of the parties hereto with respect to the subject matter hereof. The
Plan may be amended pursuant to Section 8.6 of the Plan. This Award Agreement
may be amended by the Board from time to time. Any such amendment must be in
writing and signed by the Corporation. Any such amendment that materially and
adversely affects the Participant’s rights under this Award Agreement requires
the consent of the Participant in order to be effective with respect to the
Award. The Corporation may, however, unilaterally waive any provision hereof in
writing to the extent such waiver does not adversely affect the interests of the
Participant hereunder, but no such waiver shall operate as or be construed to be
a subsequent waiver of the same provision or a waiver of any other provision
hereof.

 

14.  Counterparts. This Award Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.

 

15.  Section Headings. The section headings of this Award Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof.

 

16.  Governing Law. This Award Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
conflict of law principles thereunder.

 

17.  Construction. It is intended that the terms of the Award will not result in
the imposition of any tax liability pursuant to Section 409A of the Code. This
Award Agreement shall be construed and interpreted consistent with that intent.

 

  10 

 

 

18.  Clawback Policy. The Award and the shares of Common Stock that are or may
be acquired pursuant to the Award are subject to the terms of the Corporation’s
recoupment, clawback or similar policy as it may be in effect from time to time,
as well as any similar provisions of applicable law, any of which could in
certain circumstances require repayment or forfeiture of the Award or such
shares or other cash or property received with respect to the Award (including
any value received from a disposition of the shares acquired pursuant to the
Award).

 

19.  Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM AGAINST OUT OF
OR RELATING TO THE PLAN OR THIS PERFORMANCE STOCK AWARD AGREEMENT (INCLUDING
THESE TERMS).

 

20.  No Advice Regarding Grant. The Participant is hereby advised to consult
with his or her own tax, legal and/or investment advisors with respect to any
advice the Participant may determine is needed or appropriate with respect to
the Award (including, without limitation, to determine the foreign, state,
local, estate and/or gift tax consequences with respect to the Award, the
advantages and disadvantages of making an election under Section 83(b) of the
Code with respect to the Restricted Stock under the Award, and the process and
requirements for such an election). Neither the Corporation nor any of its
officers, directors, affiliates or advisors makes any representation (except for
the terms and conditions expressly set forth in this Award Agreement) or
recommendation with respect to the Award or the making an election under Section
83(b) of the Code with respect to the Restricted Stock under the Award. In the
event the Participant desires to make an election under Section 83(b) of the
Code with respect to the Restricted Stock, it is the Participant’s sole
responsibility to do so timely. Except for the withholding rights set forth in
Section 10 above, the Participant is solely responsible for any and all tax
liability that may arise with respect to the Award.

 

 

 

 

 

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  11 

 

  

IN WITNESS WHEREOF, the Corporation has caused this Award Agreement to be
executed on its behalf by a duly authorized officer and the Participant has
hereunto set his or her hand as of the date and year first above written.

 

  FRANCESCA’S HOLDINGS CORPORATION,     a Delaware corporation                  
  By:               Print Name:             Its:               PARTICIPANT      
    Signature             Print Name    

 

  12 

 

 

CONSENT OF SPOUSE

 

In consideration of the execution of the foregoing Performance Stock Award
Agreement by Francesca’s Holdings Corporation, I, _____________________________,
the spouse of the Participant therein named, do hereby join with my spouse in
executing the foregoing Performance Stock Award Agreement and do hereby agree to
be bound by all of the terms and provisions thereof and of the Plan.

 

Dated: _____________, 20__           Signature of Spouse              

Print Name 

  

  13 

 

 

EXHIBIT A

 

PERFORMANCE-BASED VESTING REQUIREMENTS

 

 

This Exhibit A is subject to the other provisions of the Award Agreement
(including, without limitation, Sections 4, 8 and 9 of the Award Agreement).

 

[Performance goals and metrics and methodology to determine the vesting
percentage of the Award to be determined at the time of grant.]

 

 

 

 

 

EXHIBIT B

 

STOCK POWER

 

 

FOR VALUE RECEIVED and pursuant to that certain Performance Stock Award
Agreement between Francesca’s Holdings Corporation, a Delaware corporation (the
“Corporation”), and the individual named below (the “Individual”) dated as of
_____________, 20__, the Individual, hereby sells, assigns and transfers to the
Corporation, an aggregate ________ shares of Common Stock of the Corporation,
standing in the Individual’s name on the books of the Corporation and
represented by stock certificate number(s)
_____________________________________________ to which this instrument is
attached, and hereby irrevocably constitutes and appoints _________________
____________________________________ as his or her attorney in fact and agent to
transfer such shares on the books of the Corporation, with full power of
substitution in the premises.

 

Dated _____________, ________             Signature               Print Name

 

(Instruction: Please do not fill in any blanks other than the signature line.
The purpose of the assignment is to enable the Corporation to exercise its
sale/purchase option set forth in the Performance Stock Award Agreement without
requiring additional signatures on the part of the Individual.)