Exhibit 10.7
 Exhibits A and B to Amendment No. 1 to James Conroy Employment Agreement,
dated as of April 16, 2009
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EXHIBIT A
 CLAIRES INC.
2400 W. Central Rd.
Hoffman Estates, IL 60192
  
 Grant of Stock Options
  1
 1.
    
    Time Option: The key terms of the Time Option are as follows:
 (a)
    
    Number of Shares. 50,000(b)
    
    Exercise Price per Share. $10.00(c)
    
    Vesting. The Time Option will vest and become exercisable in four
equal annual installments on April ___, of each of 2010, 2011, 2012 and 2013, provided
that the Time Option will become fully vested and exercisable immediately prior to a
Change of Control.
 2.
    
    Target Performance Option: The key terms of the Target Performance Option are as
follows:
 (a)
    
    Number of Shares. 50,000
 
 1
    
    total of 1(a), 2(a), and 3(a) 2




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(b)
    
    Exercise Price per Share. $10.00(c)
    
    Vesting. If on any Measurement Date, the Value Per Share equals or
exceeds the Target Stock Price (the Target Performance Goal), then (1) if such
Measurement Date is other than the date of a Claires Investors Liquidity Event, the
Target Performance Option will vest and become exercisable in two equal annual
installments on each of the first two anniversaries of such Measurement Date, provided
that if a Change of Control occurs after any such Measurement Date, any unvested
installment shall become fully vested immediately prior to the Change of Control, and
(2) if such Measurement Date is the date of a Claires Investors Liquidity Event, the
Target Performance Option will become fully vested and immediately exercisable at such
time.
 3.
    
    Stretch Performance Option: The key terms of the Stretch Performance Option are as
follows:
 (a)
    
    Number of Shares. 25,000(b)
    
    Exercise Price per Share. $10.00(c)
    
    Vesting. If on any Measurement Date, the Value Per Share equals or
exceeds the Stretch Target Stock Price (the Stretch Performance Goal), then (1) if
such Measurement Date is other than the date of a Claires Investors Liquidity Event,
the Stretch Performance Option will vest and become exercisable in two equal annual
installments on each of the first two anniversaries of such Measurement Date, provided
that if a Change of Control occurs after any such Measurement Date, any unvested
installment shall become fully vested immediately prior to the Change of Control, and
(2) if such Measurement Date is the date of a Claires Investors Liquidity Event, the
Stretch Performance Option will become fully vested and immediately exercisable at
such time.
 4.
    
    Termination of the Options. The Options shall terminate pursuant to the provisions
of Section 5 of the Plan, provided that Performance Options shall terminate no later than the
date of a Claires Investors Liquidity Event to the extent the Target Performance Goal or the
Stretch Performance Goal, as applicable, is not achieved at such time, or was not previously
achieved.5.
    
    Representations. By accepting this award of Options, you represent to the following,
and understand that the Company would not have granted this award to you but for your
representations and acknowledgements below.
 (a)
    
    Shares Unregistered; Investor Knowledge. You acknowledge and agree
that (i) neither the grant of the Options nor the offer to acquire Shares upon
exercise thereof has been registered under applicable securities laws; (ii) there is
no established market for the Shares and it is not anticipated that there will be any
such market for the Shares in the foreseeable future;
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and (iii) your knowledge and experience in financial and business matters are such
that you are capable of evaluating the merits and risks of any investment in the
Shares.(b)
    
    Acknowledgement. You acknowledge and agree that: (i) this award is a
one-time benefit, which does not create any contractual or other right to receive
future awards, or benefits in lieu of awards; (ii) all determinations with respect to
any such future awards, including, but not limited to, the times when awards shall be
granted, the number of shares subject to each award, the exercise or purchase price,
and the time or times when each award shall vest, will be at the sole discretion of
the Company; (iii) this award is not part of normal or expected compensation for
purposes of calculating any severance, resignation, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or similar
payments; and (iv) THAT THIS AWARD SHALL NOT CREATE A RIGHT TO FURTHER EMPLOYMENT WITH
THE COMPANY OR ITS AFFILIATES AND SHALL NOT INTERFERE WITH THE ABILITY OF THE COMPANY
OR ANY OF ITS AFFILIATES TO TERMINATE YOUR EMPLOYMENT RELATIONSHIP AT ANY TIME, AND
UPON TERMINATION OF YOUR EMPLOYMENT FOR ANY REASON WHATSOEVER, ANY RIGHTS IN RESPECT
OF THE OPTIONS OR THE UNDERLYING SHARES TO WHICH YOU WOULD HAVE BEEN ENTITLED HAD YOUR
EMPLOYMENT NOT TERMINATED SHALL LAPSE UPON THE DATE OF TERMINATION UNLESS EXPRESSLY
STATED OTHERWISE HEREIN OR THE PLAN, AND YOU SHALL NOT BE ENTITLED TO ANY COMPENSATION
IN RESPECT OF LOSS OF ALL OR ANY OF THE OPTIONS OR UNDERLYING SHARES.(c)
    
    Employee Data Privacy. You consent to the collection, use and
transfer of personal data as described in this paragraph 5(c). You understand that
the Company and its Affiliates hold certain personal information about you including,
but not limited to, your name, home address and telephone number, date of birth,
social security number, salary, nationality, job title, common shares or directorships
held in the Company, details of all other entitlement to common shares awarded,
cancelled, exercised, vested, unvested or outstanding in your favor, for the purpose
of managing and administering this award (Data). You further understand that the
Company and/or its Affiliates will transfer Data among themselves as necessary for the
purposes of implementation, administration and management of this award, and that the
Company and/or any of its Affiliates may each further transfer Data to any third
parties assisting the Company in such implementation, administration and management.
You authorize them to receive, possess, use, retain and transfer Data in electronic or
other form, for the purposes of implementing, administering and managing this award,
including any requisite transfer of such Data as may be required for the
administration of this award and/or the subsequent
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holding common shares on your behalf to a broker or other third party with whom the
 shares acquired on exercise may be deposited. You understand that he or she may,
at any time, view the Data, require any necessary amendments to it or withdraw the
consent herein in writing by contacting the local human resources representative.(d)
    
    Confidentiality. You agree not to disclose or discuss in any way the
terms of this award to or with anyone other than members of your immediate family, or
your personal counsel or financial advisors (and you will advise such persons of the
confidential nature of this offer).
 6.
    
    Vesting upon Death/Disability. As to the Time Option, as well as the Performance
Options where the Target Performance Goal or Stretch Performance Goal, as applicable, had
previously been achieved, a portion of each such Option will become vested and exercisable
upon termination of your employment with the Company and its Affiliates by reason of your
death or Disability, such portion to equal the portion of each such Option that would have
vested on the next scheduled vesting date had your employment not so terminated, multiplied by
a fraction, the numerator of which is the number of days that elapsed from the most recent
vesting date to the date of such termination, and the denominator of which is 365.7.
    
    Definitions. For purposes of this letter:
 (a)
    
    Apollo means Apollo Management VI, L.P. and its Affiliates or any entity
controlled thereby or any of the partners thereof.(b)
    
    Board means the board of directors of the Company, or any committee thereof
duly authorized to act on behalf of the Board.(c)
    
    Capital Stock of any Person means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests in,
however designated, equity of such Person, including any Preferred Stock, but
excluding any debt securities convertible into such equity.(d)
    
    Change of Control means:
 (i)
    
    any event occurs the result of which is that any Person, as
such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than
one or more Permitted Holders or their Related Parties, becomes the beneficial
owner, as defined in Rules l3d-3 and l3d-5 under the Exchange Act (except that
a Person shall be deemed to have beneficial ownership of all shares that any
such Person has the right to acquire within one year) directly or indirectly,
of more than 50% of the Voting Stock of the Company or any successor company
thereto, including, without limitation, through a merger or consolidation or
purchase of Voting Stock of the Company;
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provided that none of the Permitted Holders or their Related Parties have
the right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the Board; provided further that the
transfer of 100% of the Voting Stock of the Company to a Person that has
an ownership structure identical to that of the Company prior to such
transfer, such that the Company becomes a wholly owned Subsidiary of such
Person, shall not be treated as a Change of Control;(ii)
    
    after an initial public offering of Capital Stock of the
Company during any period of two (2) consecutive years, individuals who at the
beginning of such period constituted the Board, together with any new
directors whose election by such Board or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors of the Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
Board then in office;(iii)
    
    the sale, lease, transfer, conveyance or other disposition,
in one or a series of related transactions other than a merger or
consolidation, of all or substantially all of the assets of the Company and
its Subsidiaries taken as a whole to any Person or group of related Persons
other than a Permitted Holder or a Related Party of a Permitted Holder; or(iv)
    
    the adoption of a plan relating to the liquidation or
dissolution of the Company.
 (e)
    
    Claires Investors Liquidity Event means any transaction (including,
without limitation, a stock sale, redemption or buy back, merger, consolidation or
otherwise) immediately following which all of the Shares held by all Claires
Investors have been exchanged for or converted into consideration, all or
substantially all of which consists of cash or readily marketable securities that the
Claires Investors can immediately resell for cash at prevailing quoted prices without
legal, contractual or market restrictions.(f)
    
    Exchange Act means the Securities Exchange Act of 1934, as amended.(g)
    
    Investor Sale means of sale of Shares by a Claires Investor in connection
with or following a Qualified Public Offering.(h)
    
    Investor Percentage means the percentage derived by dividing (i) the number
of Shares of Common Stock held by all Claires Investors immediately following the
applicable Investor Sale, by (ii) the number of
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Shares held by all Claires Investors as of the date hereof (subject to adjustment
for stock splits etc.).(i)
    
    Fully Diluted Shares means, on any Measurement Date, the number of Shares
outstanding, plus the number of Shares subject to all outstanding options, warrants
and rights to acquire Shares, whether or not exercisable.(j)
    
    Measurement Date means (1) prior to a Qualified IPO, the last day of any
fiscal quarter, starting with the last day of the eighth full fiscal quarter after May
29, 2007, (2) following a Qualified IPO, each trading day, starting with the 90th
trading day following the Qualified IPO, or (3) the date of a Claires Investors
Liquidity Event, whether before or after a Qualified IPO.(k)
    
    Net Equity Value means (1) 8.5 multiplied by the Companys consolidated
earnings, before interest, income taxes, depreciation and amortization (EBITDA) for
the four fiscal quarters ending upon a Measurement Date, plus (2) the sum of cash,
cash equivalents, and the aggregate exercise price of all outstanding options or
warrants to purchase Shares, whether or not exercisable, in each case as of the
Measurement Date, less (3) all debt and capital leases outstanding as of the
Measurement Date. EBITDA, cash and debt shall be determined by the Committee based on
the Companys financial statements for such period, subject to such adjustments to
reflect unusual, nonrecurring or extraordinary events as the Committee shall deem
equitable and appropriate.(l)
    
    Permitted Holder means Apollo.(m)
    
    Preferred Stock as applied to the Capital Stock of any corporation means
Capital Stock of any class or classes, however designated, that is preferred as to the
payment of dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such corporation, over shares of Capital
Stock of any other class of such corporation.(n)
    
    Related Party means:
 (i)
    
    any controlling stockholder, 50% (or more) owned Subsidiary,
or immediate family member (in the case of an individual) of any Permitted
Holder; or(ii)
    
    any trust, corporation, partnership, limited liability
company or other entity, the beneficiaries, stockholders, partners, members,
owners or Persons beneficially holding an 50% or more controlling interest of
which consist of any one or more Permitted Holders and/or such other Persons
referred to in the immediately preceding clause (1).
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(o)
    
    Stretch Target Stock Price means $10.00, accumulated at an effective annual
rate of 32% from May 29, 2007 to the Measurement Date, provided that the Committee
shall make such adjustment to the Stretch Target Stock Price as it reasonably
determines is equitable and appropriate to reflect changes to the outstanding Shares
or capital structure of the Company, including contributions and distributions of
capital.(p)
    
    Subsidiary means, with respect to any specified Person:
 (i)
    
    any corporation, association or other business entity of
which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency and after giving
effect to any voting agreement or stockholders agreement that effectively
transfers voting power) to vote in the election of directors, managers or
trustees of the corporation, association or other business entity is at the
time owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person (or a combination thereof); and(ii)
    
    any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are that Person or one or more Subsidiaries
of that Person (or any combination thereof).
 (q)
    
    Target Stock Price means $10.00, accumulated at an effective annual rate of
22.5% from May 29, 2007 to the Measurement Date, provided that the Committee shall
make such adjustment to the Target Stock Price as it determines is equitable and
appropriate to reflect changes to the outstanding Shares or capital structure of the
Company, including contributions and distributions of capital.(r)
    
    Value Per Share means (1) prior to a Qualified IPO, the Net Equity Value
divided by the Fully Diluted Shares, (2) following a Qualified IPO, the average
closing price of a Share for the period of 90 consecutive trading days ending on the
Measurement Date, or (3) upon a Claires Investors Liquidity Event, the price per
Share realized by the Claires Investors.(s)
    
    Voting Stock of an entity means all classes of Capital Stock of such entity
then outstanding and normally entitled to vote in the election of directors or all
interests in such entity with the ability to control the management or actions of such
entity.
 8.
    
    Federal Taxes: The Options granted to you are treated as nonqualified options for
federal tax purposes, which means that when you exercise, the excess of the
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value of the Shares issued on exercise over the exercise price paid for the Shares is
income to you, subject to wage-based withholding and reporting. When you sell the Shares
acquired upon exercise, the excess (or shortfall) between the amount you receive upon the
sale and the value of the shares at the time of exercise is treated as capital gain (or
loss). State and local taxes may also apply. You should consult your personal tax advisor
for more information concerning the tax treatment of your Options. The Company is not
making any representations concerning the tax treatment of the Options, and is not
responsible for any taxes, interest or penalties you incur in connection with your Options,
even if the taxing authorities successfully challenge any position taken by the Company in
respect of wage withholding and reporting or otherwise.
    By:Name:
    Eugene S. KahnTitle:
    Chief Executive OfficerAgreed to and Accepted by: 9




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EXHIBIT B
 CLAIRES INC.
2400 W. Central Rd.
Hoffman Estates, IL 60192
  
   1.
    
    Opportunity to Purchase Shares. You may purchase Shares at a price per Share
of $10.00. You must purchase Shares in increments of 1,000, and the number of Shares you
may purchase is limited to 20,000 shares.2.
    
    Grant of Matching Option: On the date that you complete the purchase of Shares
described in paragraph 1 above, you will be granted a BOGO Option relating to the same
number of Shares that you purchase under paragraph 1 above at an exercise price per Share
of $10.00. The BOGO Option will be immediately exercisable from the date it is granted
until the date it expires or otherwise terminates pursuant to Section 4 of the your Option
Grant Letter dated April ___, 2009.3.
    
    Rights/Restrictions on Shares. The Purchased Shares and the BOGO Shares are
subject to the rights and restrictions set forth in Section 8 of the Plan, provided that in
addition to the Companys rights under Section 8(d) of the Plan (Repurchase Right), if you
voluntarily resign from employment with the Company and its Affiliates prior to the earlier
of December 13, 2011 or the date of a Qualified IPO, then the price per Share to be paid by
the Company for any BOGO Shares it chooses to repurchase under Section 8(d) of the Plan
shall not exceed the price per Share paid by you upon exercise of the BOGO Option, less any
distributions paid in respect of such Share.
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4.
    
    Representations. By accepting this opportunity to purchase Shares and receive
an option award, you represent to the following, and understand that the Company would not
have made this opportunity available to you but for your representations and
acknowledgements below.
 (a)
    
    Shares Unregistered; Investor Knowledge. You acknowledge and agree
that (i) neither the opportunity to purchase Shares, the grant of the BOGO Option nor
the offer to acquire Shares upon exercise thereof has been registered under applicable
securities laws; (ii) there is no established market for the Shares and it is not
anticipated that there will be any such market for the Shares in the foreseeable
future; and (iii) your knowledge and experience in financial and business matters are
such that you are capable of evaluating the merits and risks of any investment in the
Shares.(b)
    
    Acknowledgement. You acknowledge and agree that: (i) this award is a
one-time benefit, which does not create any contractual or other right to receive
future awards, or benefits in lieu of awards; (ii) all determinations with respect to
any such future awards, including, but not limited to, the times when awards shall be
granted, the number of shares subject to each award, the exercise or purchase price,
and the time or times when each award shall vest, will be at the sole discretion of
the Company; (iii) this award is not part of normal or expected compensation for
purposes of calculating any severance, resignation, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or similar
payments; and (iv) THAT THIS AWARD SHALL NOT CREATE A RIGHT TO FURTHER EMPLOYMENT WITH
THE COMPANY OR ITS AFFILIATES AND SHALL NOT INTERFERE WITH THE ABILITY OF THE COMPANY
OR ITS AFFILIATES TO TERMINATE YOUR EMPLOYMENT RELATIONSHIP AT ANY TIME, AND UPON
TERMINATION OF YOUR EMPLOYMENT FOR ANY REASON WHATSOEVER, ANY RIGHTS IN RESPECT OF THE
PURCHASED SHARES, THE BOGO OPTION OR THE UNDERLYING SHARES TO WHICH YOU WOULD HAVE
BEEN ENTITLED HAD YOUR EMPLOYMENT NOT TERMINATED SHALL LAPSE UPON THE DATE OF
TERMINATION UNLESS EXPRESSLY STATED OTHERWISE HEREIN OR THE PLAN, AND YOU SHALL NOT BE
ENTITLED TO ANY COMPENSATION IN RESPECT OF LOSS OF ALL OR ANY OF THE PURCHASED SHARES,
THE BOGO OPTION OR UNDERLYING SHARES.(c)
    
    Employee Data Privacy. You consent to the collection, use and
transfer of personal data as described in this paragraph 4(c). You understand that
the Company and its Affiliates hold certain personal information about you including,
but not limited to, your name, home address and telephone number, date of birth,
social security number, salary, nationality, job title, common shares or directorships
held in the Company, details of all other entitlement to common shares awarded,
cancelled, exercised, vested,
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unvested or outstanding in your favor, for the purpose of managing and
administering this award (Data). You further understand that the Company and/or
its Affiliates will transfer Data among themselves as necessary for the purposes of
implementation, administration and management of this award, and that the Company
and/or any of its Affiliates may each further transfer Data to any third parties
assisting the Company in such implementation, administration and management. You
authorize them to receive, possess, use, retain and transfer Data in electronic or
other form, for the purposes of implementing, administering and managing this
award, including any requisite transfer of such Data as may be required for the
administration of this award and/or the subsequent holding common shares on your
behalf to a broker or other third party with whom the shares acquired on exercise
may be deposited. You understand that he or she may, at any time, view the Data,
require any necessary amendments to it or withdraw the consent herein in writing by
contacting the local human resources representative.(d)
    
    Confidentiality. You agree not to disclose or discuss in any way the
terms of this award to or with anyone other than members of your immediate family, or
your personal counsel or financial advisors (and you will advise such persons of the
confidential nature of this offer).
 5.
    
    Federal Taxes: The BOGO Option is treated as a nonqualified option for
federal tax purposes, which generally means that when you exercise, the excess of the value
of the Shares issued on exercise over the exercise price paid for the Shares is income to
you, subject to wage-based withholding and reporting. However, if you exercise the BOGO
Option prior to the earlier of December 13, 2011 or the date of a Qualified IPO, unless you
make a section 83(b) election within 30 days of exercise, taxes will be deferred until
the earlier of December 13, 2011 or the date of a Qualified IPO, at which time the value of
the Shares at such time over the exercise price paid is income to you, subject to
wage-based withholding and reporting. When you sell your Purchased Shares, or your BOGO
Shares (assuming an 83(b) election, if applicable, was made), the excess (or shortfall)
between the amount you receive upon the sale and the value of the shares at the time you
acquired them is treated as capital gain (or loss). State and local taxes may also apply.
You should consult your personal tax advisor for more information concerning the tax
treatment of your Purchased Shares, BOGO Option and BOGO Shares. The Company is not making
any representations concerning tax consequences, and is not responsible for any taxes,
interest or penalties you incur in connection with your Shares or BOGO Option, even if the
taxing authorities successfully challenge any position taken by the Company in respect of
wage withholding and reporting or otherwise.6.
    
    Acceptance. In order to accept this offer to purchase Shares, you must
countersign below, indicate the number of Shares you desire to purchase in the space
indicated immediately above your signature. Return the countersigned copy of this letter,
along with a check for the purchase price, to Joe DeFalco.
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By:Name:
    Eugene S. KahnTitle:
    Chief Executive OfficerAgreed to and Accepted as to ___________ Shares by: 13